Eurasia Mining has signed an agreement under which SK Region-Story (SKRS) will perform contract mining at the former’s West Kytlim alluvial platinum deposit in the Urals, Russia.
The contract is set to commence in July 2016.
Construction company SKRS will provide all capital equipment and services in return for a 70% share of revenue.
Eurasia Mining managing director Christian Schaffalitzky said: "We are delighted to announce this transaction, which will enable Eurasia to benefit from the development of West Kytlim without having to fund the capital cost of project development from its own resources.
"In addition to the financing benefits, the involvement of the contracting company, OOO SK Region-Stroy, means that management resources can be applied to the development of the Company’s other interests, including Monchetundra, where we believe there is an opportunity to crystallise material value for shareholders and where we are in advanced discussions to achieve this outcome."
Eurasia’s local subsidiary ZAO Kosvinsky Kamen will own the remaining 30% of the total revenue, while Eurasia will retain all rights and interest in the West Kytlim licence.
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Under the terms of the agreement, SKRS will acquire, construct, assemble, deliver and install mining and processing equipment.
The company will also carry out the schedule of activities including site clearance, preparatory works, stripping, mining, washing of gravels, minerals concentration.
It is also responsible for maintenance of temporary living quarters, laboratory, repair shop, canteen, sanitary amenities and other facilities that are needed for mine development.
KK / Eurasia will continue exploration work and is responsible for geological and technological supervision.
The company needs to appoint the manager of the concentrate processing laboratory on site responsible for the technology of the recovery of precious metals from concentrates.
"This is an all-diesel operation but we plan to use electrically powered equipment for later areas, a much cheaper mining method," Schaffalitzky added.