TIDMEUA

RNS Number : 6308N

Eurasia Mining PLC

30 September 2021

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN EU REGULATION NO. 596/2014 AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT REGULATION.

30 September 2021

Eurasia Mining Plc

("Eurasia" or the "Company")

Interim Report for the six months ended 30 June 2021

Summary highlights of 2021 to date

-- Agreement with Rosgeo concluded in March to form a globally significant battery metals and PGM district on the Kola Peninsula, positioning Eurasia among majors

-- Wardell Armstrong International engaged in April for several comprehensive tasks including JORC resource audits which are almost complete and are expected to be announced shortly

-- Proposal received in May for the potential acquisition of substantially all of the Company's assets. Since then, additional interest from other parties is being considered by the Board

   --      Eurasia's representative office in Japan was established 
   --      Eurasia is now fully funded to fulfil its commitments in relation to the Rosgeo JV 
   --      Three plants are now operating at the Company's producing asset West Kytlim 
   --      The Company maintains its focus on ESG including scope 1 to 3 carbon emissions 

Chairman's statement

'The first half of 2021 has been a very active period for the Company both operationally and commercially.

We concluded a company transformational, legally binding agreement with Rosgeo covering 9 projects which together with Monchetundra and Monchetundra Flanks (including NKT, high grade nickel-copper-cobalt and PGM deposit) form a globally significant battery metals and PGM district on the Kola Peninsula, positioning our Company among majors in terms of combined resources of Eurasia and the projects included in the agreement with Rosgeo.

Post period-end, Konstantin Firstov joined Eurasia as CEO of our Kola operations from a Managing Director position in Rosgeo bringing additional operational expertise as the former head of open pit mining at Achinsk, the largest operation of Rusal, a leading company in the global aluminium industry, producing metal with a low carbon footprint.

After signing the Rosgeo agreement at the end of March, Eurasia conducted a tender among international technical auditors and in April engaged Wardell Armstrong International for several comprehensive tasks including JORC resource audits which are almost complete and will be announced shortly.

In May we received a proposal for the potential acquisition of substantially all of the Company's assets and the Board decided to focus on this potential asset sale. Since then, we have seen additional interest from other parties. We have attracted top talent and top tier partners and advisers to prioritise and execute our strategy.

Tamerlan Abdikeev based in Tokyo joined the Board and Eurasia's representative office in Japan was established.

Also in May we were offered a $20m private placement at the market price by a leading US institutional investor. In September we cut back to $15m from a larger proposal made by a consortium of US professional institutional investors, again without discount, at the market price of 26p. We are now fully funded to fulfil our commitments in relation to the Rosgeo JV.

We have successfully trebled our production capacity at West Kytlim, our ESG focussed PGM mine, while continuing to develop the electrification of the site to reduce the mine's carbon footprint. To that end we have selected an electric dragline to minimise our impact on the environment as well as to increase the efficiency of the stripping and mining, thereby reducing costs. Thus, the next year is expected to be transformation for West Kytlim on both the mining side with a highly productive electric dragline and on the processing side with 3 plants already launched.

My thanks to the staff and the Board for their continued commitment to creating additional value for our shareholders. The Company is in a very strong position financially, with an excellent portfolio of assets, and in a buoyant market for the future facing green metals: battery metals for EVs and PGMs for the hydrogen economy.'

Christian Schaffalitzky, Executive Chairman

For further information, please contact:

Eurasia Mining Plc

Christian Schaffalitzky/ Keith Byrne

+44 (0)207 932 0418

SP Angel Corporate Finance LLP (Nomad and Joint Broker)

Ewan Leggat / David Hignell / Adam Cowl

+44 (0)20 3470 0470

Optiva Securities (Joint Broker)

Christian Dennis

Tel: +44 (0) 20 3137 1902

PGM MARKET SUMMARY

The investment case for Platinum Group Minerals ('PGM'), especially Platinum and Palladium continues to be clear and compelling in the immediate and long term, based purely on the fundamentals of demand and supply. The outlook for demand is positive from existing markets in PGM, both industrial(1) and precious metal uses, and from new and emerging markets notably Fuel Cells(2) and the Hydrogen economy(2) . This contrasts with limited new supply under development and major challenges for the traditional global regions for PGM Mining(3) . Structural deficits now exist in both the platinum(4) and palladium markets and are predicted to continue, creating an opportunity for emerging global regions for PGM mining such as Kola.

Platinum has traded above US$1,000/ounce for the first half of 2021 (contrasted with US$870/ounce at this point in the mining season last year(5) ) however Palladium is expected to continue to outperform platinum being in a deeper structural deficit than its sister metal, and with further ounces removed from predicted annual supply by difficulties at Norilsk, leading to a predicted market deficit of up to 1million ounces in 2021(6) .

The contribution of other PGM namely Rhodium (Rh) and Iridium (Ir) to global metal revenue streams has risen steadily since 2016, reflecting metal price increases rather than increased production, and these metals are set to continue to find niche use cases, eg in the Hydrogen economy in Polymer Electrolyte Membrane (PEM) Fuel Cells ( Rh ) and Hydrogen production by PEM electrolysis (Ir). Both of these metals are produced at the West Kytlim mine.

(Sources:)

(1: Recovering vehicle sales leading to increased auto-catalyst demand;)

(Heraeus Platinum standard 2021, page 42.)

(2 Johnson Matthey presentation of results for the full year ended 31 March 2021;)

(https://matthey.com/-/media/files/investors/presentation-fy-2020-21.pdf?la=en&hash=A0AAE5C0202CAE9B59F99B9C5A4AA206A656144F)

(3) (https://www.engineeringnews.co.za/article/platinum-group-metals-outlook-constrained-supply-very-strong-demand-growth-wpic-2021-02-08)

(4) (WPIC Platinum Quarterly Q1 2021;)

(https://platinuminvestment.com/files/782345/WPIC_Platinum_Quarterly_Q1_2021.pdf)

(5 Eurasia Mining Interim statement 2020;)

(https://www.investegate.co.uk/eurasia-mining-plc--eua-/rns/interim-report/202009301656546679A/)

(6 https://www.mining.com/web/global-palladium-deficit-to-widen-in-2021-nornickel/)

Environmental Social and Governance ('ESG')

Eurasia is focused on environmentally friendly ('green') mining solutions applied to its portfolio of green metals:

1) Battery Metals (Nickel, Copper and Cobalt) for EVs,

2) PGMs for catalysts and green hydrogen production.

The Company is also targeting top-tier ESG designed to achieve corporate goals, while also making a meaningful contribution beyond creating shareholder value and employment and paying taxes.

Eurasia targets the inclusion in more funds and indices beyond the current ones (ex: L&G Future World ESG UK Index, Liberum's climate portfolio and Solactive ESG indices).

The Company is committed to scope 1 to 3 carbon emissions control:

Scope 1) modern fleet of machinery on site at West Kytlim, switch to electric dragline for overburden removal from 2022

Scope 2) green suppliers selected (for example hydro energy producers, partnership with ESG focused Rosgeo),

Scope 3) organisation wide low environmental impact, and role of metals produced (Eurasia's up stream value chain) in controlling Greenhouse Gas emissions.

This should result in institutional investor (like Blackrock, Fidelity, Vanguard) smart money flow to scope 3 ESG compliant companies.

Eurasia's mines produce green metals with industry leading ESG footprint and the following distinctive features:

   --      Buildings from wood sourced and milled on mine sites 
   --      No blasting used 
   --      Shallow open pits mined 
   --      Water fully recycled 
   --      No chemicals used 
   --      Low energy consumption 
   --      Annual rehabilitation done 

This results in low operating cost (Q1 of the global cost curve), creating superior value to our shareholders.

Eurasia is committed to attaining the highest Corporate Social Responsibility and environmental management standards at its mines. Areas mined at the West Kytlim Mine are remediated on a schedule detailed within our mining, forestry and environmental permits. The shallow open pit nature of the operation allows remediation by refilling open pits with stripped overburden and top soils.

We are committed to ensuring the land disturbed by mining activities is returned in a safe and stable landform that does not cause long term damage to the environment. Our commitment to restoring any damage to the environment is further demonstrated by our commitment to reducing Green House Gas (GHG) emissions at our mine sites.

Further highlights of the Company's top tier ESG focus

   --      Protect the environment 

o Minimise disturbance and mine footprint

o Complete rehabilitation of mine sites

o Reduce GHG emissions

   --      Employee safety is a first priority; 

o LTIFR remains at zero for both projects

o Ongoing COVID 19 protocols in place including medical screening and awareness interviews

   --      Build relationships with Stakeholders; 

o Mine sites engaged with local communities

o Leveraging greater than 20 years' experience working in Russia with continuous open communication with government and both local and federal agencies.

People

Our team of professionals including former senior managers of Norilsk Nickel, Rusal, Polyus, Rosgeo and Highland Gold are managing a tier one asset base of Battery Metals and PGM. Our team members have successfully launched mines within their previous track record of operational achievements, as well as Eurasia's three mines and enrichments plants launched successfully delivering on our promises.

We have a strong in-house team of geologists, mining engineers, EPC managers, metallurgists and M&A professionals.

Our team owns about 20% of Eurasia shares acquired for cash and in lieu of cash compensation that provide proper motivation in line with the best interests of all shareholders.

Partners

Eurasia started as a JV with Anglo American, the world's largest PGM producer.

The Rosgeo projects add to our strong portfolio on top of our Monchetundra, NKT and other Flanks deposits, financed with prudent capital allocation, balancing minimal shareholder dilution and engaging contractors with solid EPCF track records, resulting in a strong financial position with zero debt and approximately $35m cash as at 24 September 2021.

Rosgeo operates globally with Amerada Hess, Chevron, Conoco Phillips, Exxon Mobil, ION, Schlumberger, BP plc, British Gas, Buried Hill, Polyus, Polymetal, Rosatom and Eurasia as partners & clients.

OPERATIONS UPDATE

West Kytlim operating mine, Ural Mountains

   --      Near nine-fold increase in mine revenue compared to the same period last year 
   --      LTIFR remains at zero for the 2021 season 

-- Three plants now operational as opposed to one in previous seasons- eliminating single asset risk

   --      Advancing the Power line to site to provide electrified overburden stripping 

The phased increase in capacity for the West Kytlim mine has seen a step change in the first half of this year from one plant to three process plants commissioned in August. Whilst one plant was in operation, 170,000 cubic meters PGM bearing gravels were processed from 20 April to 31 July 2021. The Kluchiki work area continues to provide high-grade gravels, backed up by two operational sites within the Bolshaya Sosnovka area, where stripping has commenced and will be reinforced with an electric dragline in the future.

Covid protocols, including social distancing measures and testing of workforce remain in place on site, despite a majority double-vaccinated personnel. Four individuals have recovered from Covid, having contracted in the general population while on leave, and are back at work, following negative tests with no effect on the operation.

West Kytlim is an ESG focussed mine site, meaning that adverse environmental impact is kept to a minimum:

   --      Limited use of reinforced concrete and asphalt 
   --      Mine buildings built mostly from timber milled on site 
   --      Open pits remediated when mined out, with full recovery 5 to 10 years post mining 
   --      Modern machinery with low carbon footprint. 

Our plans to transition from diesel-based stripping to renewable-electric powered stripping are now well advanced. The board recognise the potential to remove the operational GHG emissions associated with this stage of the mining process as valuable in improving the mine's environmental credits with a long-term goal of producing the worlds cleanest, i.e. lowest carbon PGM ounces. Eurasia's experts have evaluated possible draglines in the Urals area and throughout Russia for purchase and shipment to site. The powerline and dragline, despite the initial capital investment will eventually reduce operating costs at the mine meaning there will not be a 'green premium' associated cost with PGM ounces produced at the mine.

Although our focus at West Kytlim in 2021 was on the capacity increase and associated stripping works to prepare both Kluchiki and Bolshaya Sosnovka areas to feed 3 washing plants, we have also been mining which resulted in an approximately 9-fold revenue increase compared to 6 months of 2020.

Monchetundra, Monchetundra Flanks and the Rosgeo JV projects

The Company continues to drive the development at its Monchetundra project and within the Rosgeo JV and provides the following summary of events for the first half of this year;

   --      Wardell Armstrong International engaged 

-- Recalculation of MT and Flanks resources and pit outlines, reflecting considerable metal price increase since FS of 2016, integrated to Detailed Mining Plan as announced 15 September.

-- Block Modelling and open pit contouring and optimisation complete for 6 of 9 Rosgeo JV projects.

Following the appointment of the new CEO at Kola subsidiary company level we have made significant progress at both Monchetundra and on the projects now available to the Company in the Monchetundra Flanks, and the Rosgeo JV. The Monchegorsk area is quite unique globally in having high levels of extensive previous exploration and reporting, and numerous deposits of a similar deposit style and metallurgical type in both the Monchegorsk and Monchepluton Massifs, directly adjacent to a major infrastructural corridor and in a mining friendly jurisdiction. Having now established a first mover advantage we are executing on our Kola assets, as we have done in the Urals exceeding our expectations.

James Nieuwenhuys, Chief Executive

Condensed consolidated statement of comprehensive income

for the six months ended 30 June 2021

 
                                              Note       6 months      12 months       6 months 
                                                               to             to             to 
                                                          30 June    31 December        30 June 
                                                             2021           2020           2020 
                                                      (unaudited)      (audited)    (unaudited) 
                                                              GBP            GBP            GBP 
 
 Sales                                         4          425,965        937,962         48,012 
 Cost of sales                                          (665,448)    (1,131,954)      (298,240) 
-------------------------------------------  -----  -------------  -------------  ------------- 
 Gross loss                                             (239,483)      (193,992)      (250,228) 
 
 Administrative costs                                 (1,197,899)    (1,889,793)      (585,537) 
 Investment income                                            511            486            429 
 Finance costs                                           (53,144)      (100,886)       (30,575) 
 Other gains                                   5           24,093              -              - 
 Other losses                                  5                -    (1,509,123)      (429,171) 
 
 Loss before tax                                      (1,465,922)    (3,693,308)    (1,295,082) 
-------------------------------------------  ----- 
 
 Income tax expense                                             -              -              - 
-------------------------------------------  -----  -------------  -------------  ------------- 
 
 Loss for the period                                  (1,465,922)    (3,693,308)    (1,295,082) 
 
 Other comprehensive (loss)/income: 
 Items that will not be reclassified 
  subsequently to 
  profit and loss: 
 NCI share of foreign exchange differences 
  on translation of foreign operations                      1,293        181,670         56,344 
 Items that will be reclassified 
  subsequently to 
  profit and loss: 
 Parents share of foreign exchange 
  differences on translation 
  of foreign operations                                     4,116        382,686        139,340 
 
 Other comprehensive income for the 
  period, net of tax                                        5,409        564,356        195,684 
-------------------------------------------  -----  -------------  -------------  ------------- 
 
 Total comprehensive loss for the 
  period                                              (1,460,513)    (3,128,952)    (1,099,398) 
===========================================  =====  =============  =============  ============= 
 
 Loss for the period attributable 
  to: 
 Equity holders of the parent                         (1,351,127)    (3,080,336)    (1,034,870) 
 Non-controlling interest                               (114,795)      (612,972)      (260,212) 
                                                      (1,465,922)    (3,693,308)    (1,295,082) 
-------------------------------------------  -----  -------------  -------------  ------------- 
 
 Total comprehensive loss for the 
  period attributable to: 
 Equity holders of the parent                         (1,347,011)    (2,697,650)      (895,530) 
 Non-controlling interest                               (113,502)      (431,302)      (203,868) 
                                                      (1,460,513)    (3,128,952)    (1,099,398) 
-------------------------------------------  -----  -------------  -------------  ------------- 
 
 Basic and diluted loss (pence per 
  share)                                                   (0.05)         (0.11)         (0.04) 
 
 
 

Condensed consolidated statement of financial position

as at 30 June 2021

 
 
                                          Note      At 30 June   At 31 December      At 30 June 
                                                          2021             2020            2020 
                                                   (unaudited)        (audited)     (unaudited) 
                                                           GBP              GBP             GBP 
 ASSETS 
 Non-current assets 
 Property, plant and equipment               6       4,578,844        4,295,908       4,521,464 
 Assets in the course of construction                  124,303           28,957          33,547 
 Intangible assets                           7         792,425          696,504         823,241 
 Investments in joint ventures               8         368,447                -               - 
---------------------------------------  -----  --------------  ---------------  -------------- 
 Total non-current assets                            5,864,019        5,021,369       5,378,252 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 Current assets 
 Inventories                                           360,630           13,695          85,012 
 Trade and other receivables                 9         450,659          285,081         445,858 
 Current tax assets                                      5,348            5,307           5,820 
 Cash and bank balances                             16,067,991        5,404,101          50,896 
---------------------------------------  -----  --------------  ---------------  -------------- 
 Total current assets                               16,884,628        5,708,184         587,586 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 Total assets                                       22,748,647       10,729,553       5,965,838 
=======================================  =====  ==============  ===============  ============== 
 
 EQUITY 
 Capital and reserves 
 Issued capital                             10      51,080,629       37,812,856      31,031,688 
 Reserves                                   11       3,985,486        3,981,370       3,756,507 
 Accumulated losses                               (31,555,180)     (30,204,053)    (28,616,131) 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 Equity attributable to equity holders 
  of the parent                                     23,510,935       11,590,173       6,172,064 
 Non-controlling interest                          (1,872,364)      (1,758,862)     (1,531,428) 
---------------------------------------  -----  --------------  ---------------  -------------- 
 Total equity                                       21,638,571        9,831,311       4,640,636 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 LIABILITIES 
 Non-current liabilities 
 Lease liabilities                          13         405,494          425,923         594,086 
 Provisions                                 15          99,422           50,186          59,217 
---------------------------------------  -----  --------------  ---------------  -------------- 
 Total non-current liabilities                         504,916          476,109         653,303 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 Current liabilities 
 Borrowings                                 12          32,038           31,684          44,051 
 Lease liabilities                          13         113,059          101,007         105,535 
 Trade and other payables                   14         443,943          287,491         508,032 
 Provisions                                 15          16,120            1,951          14,281 
 
 Total current liabilities                             605,160          422,133         671,899 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 Total liabilities                                   1,110,076          898,242       1,325,202 
---------------------------------------  -----  --------------  ---------------  -------------- 
 
 Total equity and liabilities                       22,748,647       10,729,553       5,965,838 
=======================================  =====  ==============  ===============  ============== 
 

Condensed statement of changes in equity

for the six months ended 30 June 2020

 
                                                Attributable to owners of the parent 
                         --------------------------------------------------------------------------------- 
                                                                                 Foreign                        Total 
                                                                                currency                     attributable 
                            Share         Share       Deferred      Other      translation    Accumulated     to owners     Non-controlling      Total 
                  Note      capital      premium       shares      reserves      reserve         losses       of parent         interest         equity 
                             GBP           GBP          GBP          GBP           GBP            GBP            GBP              GBP             GBP 
 
 Balance at 1 January 
  2020                     2,693,757    20,995,669    7,025,483    3,958,087     (325,342)    (27,581,261)    6,766,393      (1,327,560)       5,438,833 
 
 Issue of ordinary 
  shares 
  on exercise of 
  warrants                    22,018       203,657            -        (674)             -               -        225,001                 -        225,001 
 Issue of shares under 
  employee share option 
  plan                         9,000        82,104            -     (14,904)             -               -         76,200                 -         76,200 
 Transaction with 
  owners                      31,018       285,761            -     (15,578)             -               -        301,201                 -        301,201 
-----------------------  -----------  ------------  -----------  -----------  ------------  --------------  -------------  ----------------  ------------- 
 
 Loss for the period               -             -            -            -             -     (1,034,870)    (1,034,870)         (260,212)    (1,295,082) 
 
 Other 
 comprehensive 
 loss 
 Exchange differences 
  on translation 
  of foreign operations            -             -            -            -       139,340               -        139,340            56,344        195,684 
 Total comprehensive 
  income                           -             -            -            -       139,340     (1,034,870)    (895,530)           (203,868)    (1,099,398) 
 
 
  Balance at 30 June 
  2020                     2,724,775    21,281,430    7,025,483    3,942,509    (186,002)     (28,616,131)    6,172,064      (1,531,428)       4,640,636 
=======================  ===========  ============  ===========  ===========  ============  ==============  =============  ================  ============= 
 

Condensed statement of changes in equity

for the six months ended 30 June 2021

 
                                                Attributable to owners of the parent 
                         --------------------------------------------------------------------------------- 
                                                                                 Foreign                        Total 
                                                                                currency                     attributable 
                            Share         Share       Deferred      Other      translation    Accumulated     to owners     Non-controlling      Total 
                  Note      capital      premium       shares      reserves      reserve         losses       of parent         interest         equity 
                             GBP           GBP          GBP          GBP           GBP            GBP            GBP              GBP             GBP 
 
 Balance at 1 January 
  2021                     2,758,702    28,028,671    7,025,483    3,924,026        57,344    (30,204,053)     11,590,173       (1,758,862)      9,831,311 
 
 Issue of ordinary 
  share 
  capital for cash            53,307    14,072,982            -            -             -               -     14,126,289                 -     14,126,289 
 Share issue cost                  -     (858,516)            -            -             -               -      (858,516)                 -      (858,516) 
 Transaction with 
  owners                      53,307    13,214,466            -            -             -               -     13,267,773                 -     13,267,773 
-----------------------  -----------  ------------  -----------  -----------  ------------  --------------  -------------  ----------------  ------------- 
 
 Loss for the period               -             -            -            -             -     (1,351,127)    (1,351,127)         (114,795)    (1,465,922) 
 
 Other 
 comprehensive 
 loss 
 Exchange differences 
  on translation 
  of foreign operations            -             -            -            -         4,116               -          4,116             1,293          5,409 
 Total comprehensive 
  income                           -             -            -            -         4,116     (1,351,127)    (1,347,011)         (113,502)    (1,460,513) 
 
 
  Balance at 30 June 
  2021                     2,812,009    41,243,137    7,025,483    3,924,026    61,460        (31,555,180)    23,510,935     (1,872,364)       21,638,571 
=======================  ===========  ============  ===========  ===========  ============  ==============  =============  ================  ============= 
 
 

Condensed consolidated statement of cash flows

for the six months ended 30 June 2021

 
                                                 6 months      12 months       6 months 
                                                       to             to             to 
                                                  30 June    31 December        30 June 
                                                     2021           2020           2020 
                                              (unaudited)      (audited)    (unaudited) 
                                                      GBP            GBP            GBP 
 Cash flows from operating activities 
 
 Loss for the period                          (1,465,922)    (3,693,308)    (1,295,082) 
 Adjustments for: 
   Depreciation and amortisation of 
    non-current assets                            289,850        205,200         54,045 
   Finance costs recognised in profit 
    or loss                                        53,144        100,886         30,575 
   Investment revenue recognised in 
    profit or loss                                  (511)          (486)          (429) 
   Loss on impairment of financial 
    assets 
   Rehabilitation cost recognised in 
    profit or loss                                 61,643       (14,671)            649 
   Net foreign exchange (profit)/loss            (24,093)      1,509,123        429,171 
                                              (1,085,889)    (1,893,256)      (781,071) 
 Movements in working capital 
 Increase in inventories                        (346,782)       (12,152)       (83,225) 
 Increase in trade and other receivables        (163,307)      (130,219)      (278,022) 
 Increase/(decrease) in trade and 
  other payables                                  155,217       (65,555)        149,992 
 Cash used in operations                      (1,440,761)    (2,101,182)      (992,326) 
 
 Net cash used in operating activities        (1,440,761)    (2,101,182)      (992,326) 
------------------------------------------  -------------  -------------  ------------- 
 
 Cash flows from investing activities 
 Interest received                                    511            486            429 
 Invested to acquire interest in 
  joint venture                                 (368,447)              -              - 
 Payments for property, plant and 
  equipment                                     (629,005)      (687,167)      (158,630) 
 Payments for other intangible assets            (92,774)        (9,599)        (1,869) 
 Net cash used in investing activities        (1,089,715)      (696,280)      (160,070) 
------------------------------------------  -------------  -------------  ------------- 
 Cash flows from financing activities 
 Proceeds from issues of equity shares         14,126,289      7,934,789        301,201 
 Payment for share issue costs                  (858,516)      (413,359)              - 
 Proceeds from borrowings                               -        300,000              - 
 Repayment of borrowings                                -      (306,341) 
 Repayment of lease liability                    (13,971)       (81,491)              - 
 Interest paid                                   (51,966)       (96,965)       (27,059) 
 Net cash generated by financing 
  activities                                   13,201,836      7,336,633        274,142 
------------------------------------------  -------------  -------------  ------------- 
 
 Net increase/(decrease) in cash 
  and cash equivalents                         10,671,360      4,539,171      (878,254) 
 Effects of exchange rate changes 
  on the balance of 
  cash held in foreign currencies                 (7,470)       (55,083)          9,137 
 
 Cash and cash equivalents at the 
  beginning of period                           5,404,101        920,013        920,013 
 
 Cash and cash equivalents at the 
  end of the period                            16,067,991      5,404,101         50,896 
==========================================  =============  =============  ============= 
 

1. General information

Eurasia Mining plc (the "Company" or the "Group") is a public limited company incorporated and domiciled in Great Britain with its registered office at International House, 42 Cromwell Road, London SW7 4EF, United Kingdom and principal place of business at Clubhouse Bank, 1 Angel Court, EC2R 7HJ. The Company's shares are listed on AIM, a market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.

The financial information set out in these condensed interim consolidated financial statements (the "Interim Financial Statements") do not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2020, prepared under International Financial Reporting Standards (the "IFRS"), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified. The report did not contain a statement under Section 498(2) of the Companies Act 2006.

2. Basis of preparation

The Group prepares consolidated financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006. These condensed consolidated interim financial statements for the period ended 30 June 2021 have been prepared by applying the recognition and measurement provisions of IFRS and the accounting policies adopted in the audited accounts for the year ended 31 December 2020.

These Interim Financial Statements have been prepared under the historical cost convention.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.

The Interim Financial Statements are presented in Pounds Sterling (GBP), which is also the functional currency of the parent company.

3. Accounting policies

The Interim Financial Statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2020.

4. Revenue

 
                                       6 months     12 months   6 months 
                                             to            to         to 
                                        30 June   31 December    30 June 
                                           2021          2020       2020 
                                            GBP           GBP        GBP 
 Sale of platinum and other metals      425,965       937,962     48,012 
 
                                        425,965       937,962     48,012 
 ===================================  =========  ============  ========= 
 

5. Other gains and losses

 
                                 6 months      12 months     6 months 
                                       to             to           to 
                                  30 June    31 December      30 June 
                                     2021           2020         2020 
                                      GBP            GBP          GBP 
 Gains 
 Net foreign exchange gain         24,093              -            - 
                                   24,093              -            - 
 Losses 
 Net foreign exchange loss      (429,171)    (1,509,123)    (429,171) 
----------------------------  -----------  -------------  ----------- 
                                (429,171)    (1,509,123)    (429,171) 
 ---------------------------  -----------  -------------  ----------- 
                                (405,078)    (1,509,123)    (429,171) 
 ===========================  ===========  =============  =========== 
 

6. Property, plant and equipment

 
                                            30 June   31 December      30 June 
                                               2021          2020         2020 
                                                GBP           GBP          GBP 
 Net book value at the beginning 
  of period                               4,295,908     3,929,037    3,929,037 
 Additions                                  533,983     1,288,200      854,922 
 Depreciation                             (289,850)     (205,200)     (54,045) 
 Exchange differences                        38,803     (716,129)    (208,450) 
 
 Net book value at the end of period      4,578,844     4,295,908    4,521,464 
======================================  ===========  ============  =========== 
 

7. Intangible assets

 
                                          30 June   31 December     30 June 
                                             2021          2020        2020 
                                              GBP           GBP         GBP 
 Net book value at the beginning 
  of period                               696,504       854,995     854,995 
 Additions                                 92,774         9,599       1,869 
 Exchange differences                       3,147     (168,090)    (33,623) 
 
 Net book value at the end of period      792,425       696,504     823,241 
======================================  =========  ============  ========== 
 

Intangible assets represent capitalised costs associated with Group's exploration, evaluation and development of mineral resources.

8. Investments in joint venture

 
                                   30 June   31 December   30 June 
                                      2021          2020      2020 
                                       GBP           GBP       GBP 
 Investments in joint venture 
 Investments in the period         368,447 
 
                                   368,447             -         - 
 ------------------------------  ---------  ------------  -------- 
 

Investment in joint venture is an investment made so far to acquire in stages 75% interests from Rosgeo, a Russian registered and state funded exploration Company in the several new exploration assets. These assets will be held by new joint venture companies where Rosgeo will retain 25%.

9. Trade and other receivables

 
                         30 June   31 December    30 June 
                            2021          2020       2020 
 
  Trade receivables          495             -     47,717 
  Prepayments             22,707        75,041     34,506 
  Other receivables      427,457       210,040    363,635 
 
                         450,659       285,081    445,858 
 ====================  =========  ============  ========= 
 

The fair value of trade and other receivables is not materially different to the carrying values presented. None of the receivables are provided as security or past due.

10. Share capital

 
                                           30 June     31 December          30 June 
                                              2021            2020             2020 
 
  Issued ordinary shares with a 
   nominal value of 0.1p: 
 
  Number                             2,724,774,624   2,693,756,753    2,724,774,624 
  Nominal value (GBP)                    2,724,775       2,693,757        2,724,775 
 
 Fully paid ordinary shares carry one vote per 
  share and carry the right to dividends. 
 
  Issued deferred shares with a 
   nominal value of 4.9 p: 
  Number                               143,377,203     143,377,203      143,377,203 
  Nominal value (GBP)                    7,025,483       7,025,483        7,025,483 
 
 

Deferred shares have the following rights and restrictions attached to them:

- they do not entitle the holders to receive any dividends and distributions;

- they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;

- on return of capital on a winding up the holders of the deferred shares are only entitled to receive the amount paid up on such shares after the holders of the ordinary shares have received the sum of 0.1p for each ordinary share held by them and do not have any other right to participate in the assets of the Company.

The increase in the Company's issued share capital during the reporting period occurred as follows:

 
  Ordinary shares                           Number of        Share         Share 
                                               shares      capital       premium 
                                                               GBP           GBP 
 Balance at 1 January 2020              2,758,701,681    2,758,702    28,028,671 
 Share placing for cash                    53,306,751       53,307    14,072,982 
 Cost of issue of shares                            -                  (858,516) 
 
  Balance at 30 June 2021               2,812,008,432    2,812,009    41,243,137 
====================================  ===============  ===========  ============ 
 
  Deferred shares                           Number of     Deferred 
                                             deferred        share 
                                               shares      capital 
                                                               GBP 
  Balance at 1 January and 30 June 
   2021                                   143,377,203    7,025,483 
====================================  ===============  ===========  ============ 
 

11. Reserves

 
                                             30 June   31 December      30 June 
                                                2021          2020         2020 
                                                 GBP           GBP          GBP 
 Capital redemption reserve                3,539,906     3,539,906    3,539,906 
 Foreign currency translation reserve         61,460        57,344    (186,002) 
 Equity-based payment reserve                384,120       384,120      402,603 
 
                                           3,985,486     3,981,370    3,756,507 
 ======================================  ===========  ============  =========== 
 

The capital redemption reserve was created as a result of a share capital restructuring in earlier years. There is no policy of regular transactions affecting the capital redemption reserve.

The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies of the Group's foreign subsidiaries into GBP.

The equity-based payments reserve represents a reserve arisen on (i) the grant of share options to employees under the employee share option plan and (ii) on issue of warrants under terms of professional service agreements.

12. Borrowings

 
 
                    30 June   31 December   30 June 
                       2021          2020      2020 
                        GBP           GBP       GBP 
 Current 
 Unsecured loan      32,038        31,684    44,051 
-----------------  --------  ------------  -------- 
 
                     32,038        31,684    44,051 
 ================  ========  ============  ======== 
 

In 2017 the Group entered into unsecured loan facility to borrow up to 57 million Russian Rubbles (RR) at 14% per annum, from Region Metal, the then contractor and the West Kytlim mine operator. The Group had drawn RR 4.18 million and repaid RR0.9 million by 31 December 2020. As the contractor's arrangements had been discontinued the Group has no intention to utilise any more funds from this facility. The loan is for repayment in 2021.

No borrowing costs were capitalised in 2021 and 2020.

13. Lease liabilities

The Group leases certain of its plant and equipment. The average lease term is 4.5 years (2019: no lease). The Group has option to purchase the equipment for a nominal amount at the maturity of the finance lease. The Group's obligation under finance leases are secured by the lessor's title to the leased assets.

Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 21.9% to 23.5% per annum.

 
 Minimum lease payments                30 June   31 December      30 June 
                                          2021          2020         2020 
                                           GBP           GBP          GBP 
 Less than one year                    203,647       201,392      233,311 
 Between one and five years            511,819       572,791      819,682 
 More than five years                        -             -            - 
-------------------------------- 
                                       715,466       774,183    1,052,993 
 Less future finance charges         (196,913)     (247,254)    (353,372) 
---------------------------------  -----------  ------------  ----------- 
 
 Present value of minimum lease 
  payments                             518,553       526,929      699,621 
=================================  ===========  ============  =========== 
 
 Present value of minimum lease        30 June   31 December      30 June 
  payments 
                                          2021          2020         2020 
                                           GBP           GBP          GBP 
 Less than one year                    113,059       101,007      105,535 
 Between one and five years            405,494       425,923      594,086 
 More than five years                        -             -            - 
 
 Present value of minimum lease 
  payment s                            518,553       526,930      699,621 
=================================  ===========  ============  =========== 
 

14. Trade and other payables

 
 
                                       30 June   31 December    30 June 
                                          2021          2020       2020 
 
  Trade payables                       232,746             -    195,443 
  Accruals                              23,051       101,090     38,246 
  Social security and other taxes       44,594        18,559     37,936 
  Other payables                       143,552       167,842    236,407 
 
                                       443,943       287,491    508,032 
 ==================================  =========  ============  ========= 
 

The fair value of trade and other payables is not materially different to the carrying values presented. The above listed payables were all unsecured.

15. Provision

 
                                                30 June   31 December      30 June 
                                                   2021          2020         2020 
                                                    GBP           GBP          GBP 
 Long term provision: 
 Environment rehabilitation                      99,422        50,186       59,217 
------------------------------------------  -----------  ------------  ----------- 
 Short term provision: 
 Environment rehabilitation                      16,120         1,951       14,281 
------------------------------------------  -----------  ------------  ----------- 
 
                                                115,542        52,137       73,498 
 =========================================  ===========  ============  =========== 
 
                                              Six month      12 month    Six month 
 Movement in provision                               to            to           to 
                                                30 June   31 December      30 June 
                                                   2021          2020         2020 
                                                    GBP           GBP          GBP 
 At 1 January                                    52,137        78,103       78,103 
 Recognised in the period                        60,292        15,545          649 
 Utilised in the period                               -      (11,986)            - 
 Reduction resulting from re-measurement 
  or settlement without cost                          -      (19,301)            - 
 Unwinding of discount and effect 
  of changes in the discount rate                 1,178         3,921            - 
 Exchange difference                              1,935      (14,145)      (5,254) 
 
 At the end of the period                       115,542        52,137       73,498 
==========================================  ===========  ============  =========== 
 
 

Provision is made for the cost of restoration and environmental rehabilitation of the land disturbed by the West Kytlim mining operations, based on the estimated future costs using information available at the reporting date.

The provision is discounted using a risk-free discount rate of from 6.6% to 6.88% (2020: 3.87% to 5.08%) depending on the commitment terms, attributed to the Russian Federal Bonds.

Provision is estimated based on the sub-areas within general West Kytlim mining licence the company has carried down its operations on by the end of the reporting period. Timing is stipulated by the forestry permits issued at the pre-mining stage for each of sub-areas. Actual costs in respect of the long-term provision recognised in 2021 will be incurred within 2022-2025.

16. Commitments

At the time of the award of the Monchetundra mining license a royalty payment was calculated by the Russian Federal Reserves Commission. 20% of this payment was paid in December of 2018 and the remaining 80%, or Rub16.68 million (approximately GBP160,000) to be paid by November 2023.

During 2020 the Group entered into several lease agreements to lease mining plant and equipment. As at 31 December 2020 the average lease term was 4.5 years and present value of minimum lease payments GBP518,553 (2019: GBPnil).

In March 2021 the Group entered into a cooperation (joint venture) agreement with Rosgeo regarding exploration assets in the proximity of Monchegorsk on Kola Peninsula. The Group will acquire an initial 75% stake in each asset, which will be assigned to separate joint ventures.

The Group's outstanding commitments under the agreement are Rub37.2 mln (approximately GBP3.7mln) payable in stages conditional to licensing and permitting.

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END

IR DKKBDABKDFCN

(END) Dow Jones Newswires

September 30, 2021 12:21 ET (16:21 GMT)

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