Update: Kamushan

RNS Number : 8592C

Eurasia Mining PLC

14 March 2011

 



Eurasia Mining plc

("Eurasia" or the "Company")

Update: Kamushan

Eurasia is pleased to update shareholders as to its investment in a uranium project in Kyrgyzstan.

New subsidiary

As previously announced on 17 January 2011, Eurasia signed, on behalf of ERA, a Memorandum of Understanding ("MOU") to acquire a 55% interest in an advanced uranium project in Kyrgyzstan (the "Project").  To effect this agreement, Eurasia has nominated Energy Resources Asia Limited ("ERA"), a British Virgin Islands registered company, to be the legal holder of the Project.

Pre the fundraising by ERA, described below, Eurasia and Afrasia Mining & Energy Investment Holdings Limited ("AME"), a company with extensive experience working in Asia Minor and which also owns intellectual property on an extensive uranium exploration portfolio in Kyrgyzstan, both own 50% each of the share capital of ERA. Christian Schaffalitzky and Alan Clegg respectively for the two companies have been appointed directors of ERA.

Fundraise by ERA

Eurasia and AME intend that a fund raising be undertaken by Optiva Securities Limited on behalf of ERA to raise approximately $2.2 million in order to put ERA in the funds necessary to enable it to execute the MOU, acquire the interest in the Project and progress it. Fund raising is underway and is expected to be completed on or about the 31 March 2011.

Pursuant to the MOU (and as set out in the announcement of 17 January 2011) the consideration for the acquisition of the 55% interest in the Project is in two parts.   An initial $1 million is to be invested by ERA for a 10% interest in IMC Invest, a Kyrgyz company owning 100% of the Kamushanovskoye uranium project (Kamushan) (the "Initial Consideration"). The funds will be used to expedite the Bankable Feasibility Study already started on the Project.   A first payment of $150,000 was made by Eurasia and it is intended that the balance of the Initial Consideration will be paid this month from the ERA fundraise.  The remaining 45% is to be purchased through an initial payment of $50,000; monthly payments of $10,000 for a maximum of 12 months; and through the grant of a 2% net profit after tax royalty on the project.   The terms will form part of a full contractual agreement to be completed in due course.

Next Steps

Eurasia has undertaken to commence the Kamushan venture on behalf of ERA and as stated has paid the first part of the Initial Consideration. This $150,000 is to be refunded by ERA once the $2.2 million financing has been completed. Following completion of the fundraising Eurasia will be a major shareholder in ERA owning 39%. Eurasia will also provide management support to the new company by way of a services agreement. AME will hold a 32% interest and its subsidiary Kyrgyz Co, NuRanium LLC ("NuR") will provide local and technical expertise to ERA. It is also the intention of Eurasia and AME that NuR will become a 99% owned subsidiary of ERA after completion of the funding.

Commenting on the transaction, Managing Director of Eurasia Christian Schaffalitzky said: "We believe Kamushan has a short lead time and over the next 12 months we will be examining options which may improve the economics of mining and processing. The establishment of ERA allows this uranium business to be developed separately from Eurasia's precious metals business. Further, the NuR portfolio should add a pipeline of interesting potential projects, details of which will be provided in due course".

For more information please contact:

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

 

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