JOHANNESBURG (miningweekly.com) – Russia-based Eurasia Mining has hit a significant milestone in the advancement of its Monchetundra palladium and platinum project, with the Russian State Agency for Subsoil Use (Rosnedra) approving the project’s reserves report and feasibility study.

The approval allows Eurasia to apply for a discovery certificate, which is a prerequisite for a production licence.

MD Christian Schaffalitzky on Wednesday described the Rosnedra approval of the project’s reserves as an “incredibly important” development at Monchetundra, which is located in the Kola Peninsula bordering Finland.

"This excellent result has come considerably quicker than we had anticipated, as the reserves report and the feasibility study were only submitted for approval on December 31, 2016.”

The Monchetundra project, in which South Africa’s Anglo American Platinum used to be a joint venture partner, now has State-approved, Russian standard C1 and C2 category reserves of 55.9 t (1.9-million ounces) palladium equivalent, with major gold and base metals credits, at two openpit locations occurring about 2 km apart.

The reserves are fully compliant, as defined under the State Commission on Mineral Reserves, or GKZ, standards.

Schaffalitzky reported that the development of its 80%-owned Monchetundra project would follow the same route as its West Kytlim project, which was brought into production last year.

“We are working on creating partnerships with qualified firms to help realise the potential of this significant platinum, palladium, gold, copper and nickel mine, with the bonus of having an engineering, procurement and construction contract (EPC) with the financing inside it already in place.”

Eurasia last year agreed an EPC deal with Chinese giant Sinosteel for a 1.7-million-tonne-a-year mine and beneficiation plant at Monchetundra, which includes financing. The total value of the Sinosteel contract is $176-million, with the Chinese group responsible for the debt finance of $149.60-million (85% of the contract value).

Schaffalitzky said that the Monchetundra openpit was significantly larger than the West Kytlim operation and that it would seek to appoint a management company with experience in beneficiating platinum group metal (PGM) ores. Discussions were reportedly at an advanced stage.

Eurasia also owns the Semenovsky tailings project, which comprises reserves of about two-million ounces total contained PMGs.

Aim-listed Eurasia’s shares advanced as much as 15% in London on Wednesday morning to trade at £0.52 apiece. By 09:30, the company traded £0.45 a share.