JOHANNESBURG (miningweekly.com) – The soaring palladium price is boding well for the Monchetundra project, on the Kola Pensinsula of Russia, and has boosted the project’s in-situ value to about $2-billion, project owner Eurasia Mining reports.
The company, which is listed on London’s Aim, said on Tuesday that it was considering a re-estimation of the reserves at Monchetundra, noting that the palladium price had soared by about one-third this year.
“As the palladium and platinum prices approach parity, ore bodies contoured in terms of palladium equivalent change, such that new parts of ore bodies become economic,” Eurasia explained in its interim results statement.
In July, Eurasia estimated an in-situ value of about $1.7-billion for the project, which comprises 1.9-million ounces of palladium-equivalent at two openpit locations. These openpits – West Nittis and Loipishnune – also contain significant gold and base metal credits, including 2 t of gold, 28 124 t of copper and 30 410 t of nickel.
Eurasia reported that it was advancing the permitting process towards applying for a mining licence, with its submission planned for the fourth quarter. The company noted that it took about six to 12 months for licence to be awarded.
Eurasia is continuing with offtake discussions with commodity trader Glencore, Chinese group Sinosteel. The company recently signed a nondisclosure agreement with Canadian royalty streaming Silver Wheaton to discuss the potential of its commercial involvement.
Meanwhile, at the operating West Kytlim mine, in the Ural mountains, Eurasia is considering bringing in more mining contractors to increase production and improve project economics.
The company stated that the mining season had started later than planned and that its mining contractor, Regionmetall, had failed to reach a production target outlined in a January 2017 agreement. Eurasia plans to bring on board more mining contractors to work in tandem with Regionmetall.
Eurasia said work at West Kytlim had progressed since the mid-May start up. An increase in reserves was calculated earlier in the Spring, owing to higher-than-expected mining grades and orebody extensions discovered in the 2016 mining season. These reserves were assimilated into the 2017 mining allotment.
The project reserves and resources currently stand at 2 283 kg of raw platinum in reserves and 1 400 kg of platinum in resources.
Capital expenditure, and the majority of operating costs, are being met by Regionmetall for a consideration of 70% of top line sales. Various adaptations and improvements to the processing scheme used last year by Regionmetall were tested in the opening weeks of the 2017 season and modifications made to the series of vibrating screens.
Besides Moncheduntra and West Kytlim, Eurasia is also involved in the Semenovsky tailings project, where it has an exclusivity agreement in place until the end of November.