Eurasia Mining got one step closer to completing its Monchetundra mine recently when it received mining permit approval from the Federal Securities Board and Ministry of Defense.
The project, located on the Kola Peninsula of Northwest Russia, has a combined resource and reserve total of 2 million ounces of platinum-group metals in palladium equivalent, excluding gold, copper and nickel reserves.
As it moves through the preliminary stages, the project will now advance to the Ministry of Economic Development and Ministry of Natural Resources for final approval. It is expected that it will receive a successful grant by late summer.
“A very welcome development for our Monchetundra mining license permit, which remains on schedule,” Director Christian Schaffalitzky said in a release. “The Monchetundra Project is very much a focus of the company’s business, alongside the now full scale production of PGM at our West Kytlim mine.”
While the project’s primary resources are palladium and platinum, with the ratio being 2:1, two of Monchetundra open pits also contain gold, copper and nickel reserves. In a conversation with the Investing News Network, Dmitry Suschov, member of the board of directors for Eurasia, explained why the PGMs market is so valuable, comparing it to met coal.
“PGMs are the metals that are mostly used in catalysts to reduce emissions in different industries. Once we look at any commodity we look not only at its supply and demand, but also at its stock that is sometimes overlooked. From a supply, demand and stock perspective, both platinum and palladium markets resemble met coal markets,” Suschov said.
“Once the market for PGMs hits the physical deficit like it did in 2016 for met coal, the price immediately goes up and stays on the high level sustainably, because the customers start to compete for the products that are in physical deficit. After seeing this pattern in my met coal business, I was able to spot the same pattern in PGMs,” he explained.
Eurasia predicts that the Monchetundra mine will be in full production by 2020, and already has offtake agreements prepared by Sinosteel and Glencore .
The company has two other primary projects, its West Kytlim platinum and gold mine, and its Semenovsky gold and silver tailings project, both located in Russia. Suschov spoke about some of the benefits to mining in Russia.
“If you … look at the facts, you will see that Canadian mining companies are very successful in Russia. Barrick Gold, the largest global gold producer, has made a big PGMs discovery in Russia very close to our Monchetundra open-pit mine,” he said.
“I hope investors will also shift focus from propaganda to the facts and profits that companies like Kinross Gold have been generating in Russia for years.”