Execution of Memorandum of Un

RNS Number : 5584Z

Eurasia Mining PLC

17 January 2011

 



Eurasia Mining plc

("Eurasia" or the "Company")

Execution of Memorandum of Understanding

Eurasia is pleased to announce that, as an early outcome of its expanded search for near to production mining projects in the former Soviet Republics, it has executed a legally binding Memorandum of Understanding ("MOU") to acquire an interest in the Kamushanovsky uranium project in Kyrgyzstan.

The project is located in the flood plain of the Chui River, 60 kilometres northwest of the capital Bishkek, in northern Kyrgyzstan.  It has been the focus of a five-year exploration programme. It is currently estimated that there are at least 1,775 tonnes of uranium oxide within the licence area.

Terms of the Agreement

Eurasia has executed the MOU with International Mining Company Invest Inc ("IMC Inc"), the owner of Closed Joint Stock Company IMC Invest ("IMC"). Under the terms of the MOU, Eurasia will receive a 10% interest in IMC, which holds the interest in the Kamushanovsky project. In consideration of the shares, Eurasia will pay $1,000,000 to IMC Inc (of which $150,000 has been paid and a further $850,000 is to be paid on or before 1 March 2011). These funds are to be used for continued work on the project.

It is also agreed that 45% of IMC Inc's holding in IMC will transfer to Eurasia if certain additional conditions are satisfied. These conditions predominately require Eurasia to identify an investor to satisfy the full capital and operational expenditure for IMC, within 12 months of the date of the MOU and to grant IMC Inc a 2% net profit after tax royalty on an eventual mine at Kamushanovsky. 

IMC Invest

IMC is a company incorporated in the Kyrgyz Republic. It is an early stage exploration company, which holds a 100% interest in the Kamushanovsky advanced uranium project in Kyrgyzstan. It is currently not generating any revenue or profit.

A bankable feasibility study ("BFS") is currently being prepared and this study is planned to incorporate pilot work directed at optimizing uranium extraction. It is the intention that the BFS will be completed in preparation for development by the end of 2011.

Commenting on the transaction, Christian Schaffalitzky said: "We believe Kamushanovsky represents an excellent opportunity. Preliminary work suggests that processing costs will be below $25/lb, with the current uranium price approximately $65/lb. I would add that this development is in addition to our principal business, platinum metals, and we aim to commence mining in the Urals once permits are granted for our West Kytlim project".

For more information please contact:

Eurasia Mining Christian Schaffalitzky / Michael de Villiers	Tel: [phone]
Katy Mitchell, WH Ireland Limited	Tel: [phone]

Consent for release

Christian Schaffalitzky, FIMMM, PGeo, CEng, is a director of the Company. He has reviewed the announcement and consents to the inclusion of the information in the form and context in which it appears here. He is a Competent Person for the reporting of these results.

 

END

 

 

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