REG - Eurasia Mining PLC - West Kytlim Sale & GM Notice

Eurasia MiningAnnouncement

29/12/2025 17:45

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RNS Number : 0422N  Eurasia Mining PLC  29 December 2025

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29 December 2025

Eurasia Mining plc

West Kytlim Sale & GM Notice

 

Eurasia Mining plc ("Eurasia" or the "Company"), the iridium, osmium,
palladium, platinum, rhodium, ruthenium and gold mining company announces the
proposed disposal of its West Kytlim mining operations ("Disposal").

A circular ("Circular") providing information on the proposed Disposal and
giving notice of a general meeting of shareholders to be held at 11:00 a.m.
(UK time) on Thursday, 15 January 2026 has been published today. The
resolutions will be proposed as ordinary resolutions. Shareholders should read
the notice of general meeting at the end of the Circular for the full text of
the resolutions and for further details about the General Meeting.

The Directors consider that the resolutions to be proposed are in the best
interests of shareholders and the Company as a whole and unanimously
recommends that shareholders vote in favour of the resolutions, as they intend
to do in respect of their own beneficial shareholdings.

Highlights

·      The West Kytlim operations are exposed to nationalisation risks
as a reciprocal reaction to the indefinite freeze of Russian assets in Europe,
and very high operational and disposal taxes. Accordingly, the Directors
believe it is in the Company's interests to achieve at least some value from
the historically loss-making West Kytlim operation (rather than nothing in
case of nationalisation) in order to focus on the Arctic.

·      West Kytlim has only 0.3% of Eurasia's reserves and resources. In
contrast, Eurasia's Arctic assets represent 99.7% of Eurasia's reserves and
resources, and benefit from the legally binding agreement signed with Far East
and Arctic Development Corporation (please refer to RNS of 6 December 2021)
both in terms of Eurasia's investment support in the Arctic and tax benefits,
that West Kytlim does not have.

·      The NPV of NKT Tier-1 Nickel-Copper asset alone is US$1.2-1.7B
according to Wardell Armstrong International (Competent Persons Report
December 2021). Thus, the Arctic cluster of Eurasia is of a much higher
priority for the Group as a whole.

·      A strong base valuation of West Kytlim of US$251M was achieved as
a result of a competitive selling process, but because of the current taxation
regime in Russia only 5% of the valuation is payable.

·      The size of Eurasia's reserves and resources is over 300 times
larger in the Arctic relative to West Kytlim and combined with the tax
benefits in the Arctic, a higher value is expected to be achieved in due
course.

As well as the Circular, an investor webinar is scheduled for Tuesday, 30
December 2025 at 3:00 p.m. to address all questions and concerns of the
shareholders. Christian Schaffalitzky, Executive Chairman, will provide a live
investor session via the Investor Meet Company platform.

The session will allow shareholders to ask the Company questions regarding any
queries they currently have. It is the intention to enable shareholders to
understand today's announcement on why the Company agreement for the sale of
West Kytlim is in the best interest of all stakeholders in Eurasia.

The Company will be holding a Q&A session only, with some top-line
commentary on the Company's progression at the start. Questions can be
submitted pre-event via your Investor Meet Company dashboard.

Investors can sign up to Investor Meet Company for free and add to
meet Eurasia Mining PLC via:

https://www.investormeetcompany.com/eurasia-mining-plc/register-investor
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.investormeetcompany.com%2Feurasia-mining-plc%2Fregister-investor&data=05%7C02%7Cshiv%40yellowjerseypr.com%7C9a1e790f0e2e4679c6c508dcecf5a4df%7Cc7fee44edc6a4490a4ea0667cc994b7d%7C0%7C0%7C638645787002535225%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=yZGwLuFK9BnFHWThwVurraQm%2FyBITNPGpzZkOXBJoB8%3D&reserved=0)

Investors who follow Eurasia on the Investor Meet Company platform will
automatically be invited. Please note the following:

·      Whilst the Company may not be able to answer every individual
question, the aim is to address the issues raised by investors;

·      Responses to the Q&A will be published at the earliest
opportunity on the Investor Meet Company platform following the presentation;
and

·      Investor feedback can also be submitted directly to management
after the event, to ensure the Company can understand all investor views.

 

For further information, please contact:

 Eurasia Mining plc                                   +44 (0)20 7118 1095

 Christian Schaffalitzky                              info@eurasiamining.co.uk (mailto:info@eurasiamining.co.uk)

 SPARK Advisory Partners Limited (Nominated Adviser)  +44 (0)20 3368 3555

 Andrew Emmott

 Oak Securities (Broker)                              +44 (0)20 3973 3678

 Jerry Keen

 Yellow Jersey PR (Financial PR)                      +44 (0)20 3004 9512

 Charles Goodwin / Shivantha Thambirajah              eurasia@yellowjerseypr.com (mailto:eurasia@yellowjerseypr.com)

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 Event                                                                           Date / Time
 Notice of GM posted to Shareholders                                             29 December 2025
 Record date for determining entitlement to vote at the GM                       Close of Business on 13 January 2026
 Latest time & date for receipt of CREST Proxy Instructions and proxy forms      11:00 a.m. on 13 January 2026
 General Meeting                                                                 11:00 a.m. on 15 January 2026
 Results of the General Meeting published by RNS                                 15 January 2026

 

Notes:

1.   Each of the times and dates in the above timetable is subject to
change.  If any of the above times or dates change, the revised times and
dates will be notified to Shareholders by means of an announcement made
through a Regulatory Information Service and posted on the Company's website
at www.eurasiamining.co.uk (http://www.eurasiamining.co.uk) .

 

FURTHER INFORMATION

Defined terms used in this announcement have the same meaning as set out in
the Definitions in the Circular.

Introduction

Eurasia has agreed the proposed terms for a conditional agreement ("Sale
Agreement") to dispose of its interest in Kosvinsky Kamen, the holder of the
West Kytlim alluvial PGM and gold operations.  The Disposal is subject to a
number of conditions including Shareholder approval as described below, and
the Circular issued today provides information to Shareholders and seeks their
approval of the requisite resolutions at the General Meeting.  The terms of
the Sale Agreement described below and in the Circular have been agreed in
principle with the buyer but will only be entered into once state approval is
received.

The Disposal follows a sale process and is consistent with the Company's
strategy of rationalising its portfolio and prioritising the development of
its higher-value assets in the Kola Peninsula in the Arctic region.
Furthermore, the Arctic assets benefit from the agreement signed with the
state owned Far East and Arctic Development Corporation (please refer to RNS
of 6 December 2021).

The Disposal, if implemented, will generate non-dilutive capital to assist the
Group in concentrating on the ongoing development of the Group's remaining
assets in the Arctic region, where 99.7% of Eurasia's reserves and resources
are located, including the Tier 1 nickel-copper deposit NKT.  Also, the
Company holds a mining licence at Monchetundra and recently completed a
detailed design for its development (please refer to RNS of 1 December
2025).

The Transaction places a valuation of the West Kytlim assets of approximately
US$251 million, which is line with previous estimates. However, after local
regulations and taxes the cash consideration due is 671.2 million RUB
(approximately US$9 million)  (see further discussion on these taxes below).
 Whilst this represents a significant discount, the Board believes it is
preferable to take this opportunity now.  West Kytlim is exposed to potential
nationalisation as a possible reciprocal reaction to Russia's assets freeze in
Europe for indefinite period of time.

In addition, Kosvinsky Kamen will transfer the Travyanaya licence to the Group
as part of the transaction - i.e., Eurasia will retain this licence following
Completion.

The Board believes that the Disposal represents an opportunity to optimise the
value of its portfolio and allow the development of the major component of its
mineral assets and inventory.

In view of the size of the Disposal relative to the size of the Company, the
Transaction requires to be approved by Shareholders.  Should the Transaction
be approved by Shareholders, the Company will NOT become a cash shell and will
NOT be required to complete an acquisition which constitutes a reverse
takeover under the AIM Rules.

The purpose of the Circular is to:

(i)    provide Shareholders with information about the background to and
the reasons for the Disposal;

(ii)   explain why the Board considers the Disposal to be in the best
interests of the Company and its Shareholders as a whole; and

(iii)  explain why the Board recommends that Shareholders vote in favour of
the Resolutions to be proposed at the General Meeting, notice of which is set
out at the end of the Circular.

 

General Meeting

A General Meeting will be held electronically on
https://meetings.lumiconnect.com/100-367-007-686
(https://meetings.lumiconnect.com/100-367-007-686)  at 11:00 a.m. on
Thursday, 15 January 2026.  The Notice convening the General Meeting is set
out at the end of the Circular.  The Resolutions to approve the Disposal will
be proposed as ordinary resolutions and must be passed by a simple majority of
votes cast.

 

Background to and reasons for the Disposal

The Group holds a portfolio of mining and development brownfield assets in the
Urals and in a high-value Arctic mining area in the Kola peninsula, close to
the city of Monchegorsk.  West Kytlim in the Urals is the Group's only
production asset, producing PGM and gold from a surface mine, but is non-core
representing only 0.3% of the Group's total Reserves and Resources, while
99.7% are located in the Arctic (Monchetundra-NKT cluster).  The Monchetundra
detailed design is expected to be approved by all relevant authorities this
year, allowing mine development and construction to commence under the EPCF
contract with Sinosteel.

The sale of the Kosvinsky Kamen shareholding simplifies the Company's
portfolio.  Subject to continued compliance with applicable sanctions
legislation, the proceeds of the Disposal may provide capital for the project
elements not covered by the EPCF arrangements with Sinosteel.  It also
removes the current nationalisation and regulatory risks associated with
operating in the Urals region.

Eurasia continues to remain compliant with licence obligations at Monchetundra
and NKT in the Arctic region, enabling their development to be continued
within the expected timeframe and avoiding the risk of licence recall by the
authorities.  Significantly, all of Eurasia's Arctic assets benefit from the
agreement signed with the state owned Far East and Arctic Development
Corporation (please refer to RNS of 6 December 2021).

In summary, the Directors believe that the Disposal allows Eurasia to
concentrate on its highest-value assets, reduce risk exposure, and pursue its
strategic objectives without recourse to shareholder dilution.

 

Financial effects of the Disposal

The financial information below has been prepared for illustrative purposes
only and is extracted from the notes to the Group's audited financial
statements for the years ended 31 December 2024, 2023 and 2022 annual reports
and relates to the Disposal Group.

No adjustments have been made to take account of trading, expenditure or other
movements subsequent to 31 December 2024, being the date of the last published
historical annual financial information of the Group.

                    2022         2023         2024
                    £            £            £
 Revenue            61,075       2,069,262    6,636,001
 Loss for the year  (4,397,875)  (3,196,028)  (6,024,469)

 Net assets         14,551,112   13,968,335   10,827,117

 

The West Kytlim project has consistently made operating losses to date.
Operations and trading for the Disposal Group for the year ending 31 December
2025 have continued in line with results reported for the year ended 31
December 2024 and half year ended 30 June 2025.

Following completion of the Disposal, the Group's financial statements will no
longer consolidate the Group's 68% interest in the revenues, expenses, assets,
liabilities and cash flows of the Disposal Group.  Following completion of
the Disposal, the Group's activities will comprise exploration and development
of the Group's assets in the Arctic region, primarily Monchetundra and NKT,
subject to ongoing compliance with sanctions legislation.

 

Regulatory framework and statutory valuation

Under current state regulations for the sale of Russian mining assets:

·    a statutory valuation must be prepared by an approved appraiser;

·    a 60% discount is then applied;

·    35% tax is imposed on the pre-discount valuation, payable by the
purchaser; and

·    as a result, only 5% of the statutory valuation is payable to the
seller.

The independent statutory valuation for Kosvinsky Kamen has been agreed in
principle at approximately US$251 million.  After the discount and tax
described above, the total consideration payable will be RUB 671,200,000
(approximately US$9 million) for its 68% share, of which RUB 546,200,000
(approximately US$7.3 million) will be payable prior to completion and the
remaining RUB 125,000,000 (approximately US$1.7 million) will be payable
within 12 months subject to the non-revocation/extension of certain licences
at least for 12 months.  In addition, Kosvinsky Kamen will transfer the
Travyanaya licence to the Group as part of the transaction - i.e., Eurasia
will retain this licence following Completion.

 

Strategic case for the Sale

The Disposal:

·    Mitigates nationalisation and regulatory risks in the Urals.

·    Enables full strategic focus on the Arctic cluster.

·    Supports compliance with licence obligations at Monchetundra
(avoiding risk of licence recall).

The Disposal will enable the Group to support the Monchetundra project without
shareholder dilution, supported by the EPCF arrangements with Sinosteel.  It
reduces the Group's exposure to nationalisation and other geopolitical risks
associated with the Urals and supports compliance with Monchetundra licence
obligations.  By selling an asset that represents only 0.3% of Eurasia's
total Reserves, the Company can focus its resources on the remaining 99.7%,
which carry substantially greater value.

Focusing on the Arctic cluster allows the Group to concentrate its resources
on assets that have materially higher value.  Independent third-party
estimates value the NKT deposit alone at between US$1.2 billion and US$1.7
billion (Wardell Armstrong's Competent Persons Report December 2021).

The Company's long-term strategy to dispose of the Group's Russian assets has
been in place since before the introduction of the tax regime in late 2024
(described above).  In light of more recent geopolitical changes, the board
has decided that an opportunity to dispose of West Kytlim, even with such a
high effective tax rate, is in the interests of the Company.  Although the
mandated valuation framework results in a total deduction of approximately
95%, meaning that only around 5% of the statutory valuation is payable to the
seller, this amount is preferable to the risk of receiving no value in the
event of nationalisation.

Assuming the Disposal completes, the proceeds will provide a cash buffer that
may help sustain the development of the Kola assets and in future support a
strategic transaction once the current regulatory excessive tax on Russian
asset disposals is removed.  The Disposal would allow the Company to sustain
and focus on the development of what could become a major mining industry in
the Arctic, with the Monchetundra-NKT cluster positioned as a cornerstone
asset with a 'first mover' advantage within that landscape.  The EPCF
agreement with Sinosteel provides a road map for the future.  Nationalisation
risk remains a concern for foreign-owned mining assets in Russia, but the
Group's assets in the Arctic region benefit from the agreement reached in
December 2021 with state owned Far East and Arctic Region Development
Corporation.

 

Summary terms of the Disposal

The Buyer (LLC KS Logistics), is a non-sanctioned infrastructure company in
Russia working in transportation, infra-structure development, retail sales
and information technology development and management.

The consideration payable by the Buyer under the Sale Agreement is RUB
671,200,000 (approximately US$9 million).  This amount reflects the effect of
the Russian regulatory framework introduced in response to geopolitical and
sanctions-related conditions, which imposes strict limitations on the proceeds
that foreign owners may legally receive from the disposal of Russian assets.

Under this framework, a statutory valuation is first required to determine the
fair market value of the asset being sold.  Once this valuation is
established, a mandatory 60% discount is applied as part of the
state-controlled pricing mechanism.  In addition, a 35% tax is levied on the
pre-discount statutory valuation.

The combined effect of these mechanisms is that only approximately 5% of the
statutory valuation may legally be transferred to the seller.  For the
purpose of the Disposal, the statutory valuation was approximately US$251
million, and therefore the maximum amount legally receivable - based on its
68% ownership of KK - is approximately US$9 million.

This amount represents the full extent of the proceeds that the Company is
permitted to receive under the current legal regime and enables Eurasia to
unlock value from the Kosvinsky Kamen asset while remaining fully compliant
with all the applicable rules and regulations.

The consideration is payable as to RUB 546,200,000 (approximately US$7.3
million) prior to completion and the remaining RUB 125,000,000 (approximately
US$1.7 million) within 12 months subject to the non-revocation/extension of
certain licences at least for 12 months.

The Sale Agreement includes customary provisions relating to:

·    the assets and shares to be sold;

·    conditions precedent to Completion include state approval and
corporate approvals;

·    the consideration payable;

·    liability for past costs, including taxation, is capped at the
consideration payable;

·    the process for Completion;

·    post-Completion obligations;

·    company representations; and

·    termination rights.

The Sale Agreement provides for a reciprocal break fee of US$5 million, in the
event that the Disposal does not proceed as intended, due to the failure of
either party to fulfil the conditions due to matters under their control.

The Sale Agreement is under Russian law and disputes are referred to the
Russian Institute of Modern Arbitration.  Closing is planned before 28
February 2026.

Terskaya Mining Company, a wholly owned subsidiary of the Group, will act as a
guarantor for customary representations given in the Sale Agreement (capped in
total by the consideration).

As a part of the Transaction, Kosvinsky Kamen is transferring to the Group the
licence for Travyanaya in the Arctic for a nominal consideration, i.e.
Eurasia will retain the licence for Travyanaya after the Disposal.

The terms summarised above have been agreed in principle between the parties,
but will only be entered into once state approval has been received, and
therefore remain subject to final agreement.

 

Use of Proceeds

The Directors believe that the Disposal can provide the Company with working
capital in Russia.  In conjunction with sanctions legislation, the Company
will continue development work at Monchetundra and development at NKT.  In
particular, it maintains the opportunity to participate in the development of
what could become a major mining industry in the Arctic, with the
Monchetundra-NKT cluster positioned as a cornerstone asset within that
landscape.

 

AIM Rule 15

In accordance with AIM Rule 15, in view of the material size of the Disposal,
relative to the size of the Group, the Transaction requires to be approved by
Shareholders.  Should the Transaction be approved by Shareholders, the
Company will NOT become a cash shell and will NOT be required to complete an
acquisition which constitutes a reverse takeover under the AIM Rules.

 

General Meeting

The Disposal is conditional upon, amongst other things, Shareholder approval
being obtained at the General Meeting.

A General Meeting will be held electronically on
https://meetings.lumiconnect.com/100-367-007-686
(https://meetings.lumiconnect.com/100-367-007-686) at 11:00 a.m. on Thursday,
15 January 2026.  The Notice convening the General Meeting is set out at the
end of the Circular.  The Resolutions to approve the Disposal will be
proposed as ordinary resolutions and must be passed by a simple majority of
votes cast.

Shareholders should read the Notice of General Meeting at the end of the
Circular for the full text of the Resolutions and for further details about
the General Meeting.  The attention of Shareholders is also drawn to the
voting intentions of the Directors as set out in the Letter from the Chairman.

 

Recommendation

The Board believes that the Disposal is consistent with the Group's strategic
priorities and reduces exposure to operational and geopolitical risks
associated with the Urals region; and allows the Group to streamline its asset
base while remaining fully compliant with all applicable rules and
regulations.

For these reasons, the Board considers the Disposal to be in the best
interests of the Company and its Shareholders as a whole and unanimously
recommends that Shareholders vote in favour of the Resolutions, as the
Directors and management intend to do in respect of their own beneficial
shareholdings, which amount in aggregate to 561,217,013 Ordinary Shares,
representing approximately 19% of the issued share capital of the Company.

 

Further updates

Further updates will be provided as and when the conditions to the Disposal
Agreement, including state approval, are satisfied.

 

 

 

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