Eurasia Mining (LSE:EUA) — Investor Q&A session

0:00 Good afternoon, and welcome to the EURASIA MINING PLC Investor Q and A session. Throughout this recorded meeting, investors will be in listen only mode. Questions could be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Simply type in your question and press send. Due to the number of attendees today, the company may not be in a position to answer every question received during the meeting itself. However, company can review all questions submitted and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Christian Schafelitsky, executive chairman.

0:30 Thank you very much, Paul. Welcome everybody to this webinar. It's the first one we've done in quite a while. And I will go into detail about that as we go through the series of questions. We've had we've got an amazing number of people attending, 615 620 at the last count. And we also were given at least 300 and or 300 questions or more to answer, which means that we're we're we're trying to kind of lump them up a bit. A lot of them were the same ones and we'll try and put them together into one list of questions which I will deal with through the webinar. So I'll hand back to Paul who will deal with the format. Fantastic, Christian. Thank you. As Christian said, we did receive a number of questions. Thank you to all those investors for submitting those. And as previously mentioned, due to the number of attendees today, the company may not be in a position to answer every question it's received. So let's move on to those questions, Christian.

1:26 Let's group those into themes, as you said. The first thing we've got here is sale of assets. When will this be concluded?

1:33 Well, this, of course, is our favorite question and I have all I can say is that the process is ongoing and at times we have several parties reviewing the data. We have a big data room with a lot of material in it and there are a number of parties in it at any moment in time. And you may remember that last year, we were advancing discussions very close to conclusion with one party, but unfortunately, this did not proceed to formal term to a formal term sheet. So that's it was disappointing, but we continue. And there are, as I said, quite a number of people still looking at our assets. Thank you. Following that theme, how much interest has been shown in the assets for sale? And do you think a deal can be done before an equity raise?

2:18 As I said, the main issue is trying to predict when a term sheet a formal term sheet can be completed, and I can't do that today. But meanwhile, we have to do certain things such as continue to keep the ground in good standing in the two main areas of activity. And also, of course, meet the cost of the parent PLC and looking after our aim listing. As you know, we are planning a secondary listing in Astana in Kazakhstan. And the idea of that is to increase the liquidity as it has been much less prominent here in on AIM in recent times mainly because, of course, of the jurisdiction that we've been working in. Thank you. Is the credible buyer from October 2021 the strategic investor linked with a Russian management buyout?

3:08 I'll be speaking a little bit later. We have a lot of questions about the MBO option. But they we made a reference to this credible buyer in September 21. It was a large strategic investor and we continue to maintain a dialogue with them. Thank you. What is your preferred route to concluding a sale of EURASIA MINING's assets in Russia? And are you able to share a high level list of milestone events required to achieve this? The process is actually quite simple. If a binding agreement is reached and announced, a general meeting would be called will be called for all shareholders to review the offer and to vote to accept or reject the offer. And this would come together with a statement from the board recommending acceptance, obviously, because that's why it's being put that's why it's being announced.

3:55 Thank you. Given the recent order signed by president Putin allowing VTB Bank and its subsidiaries to transact with companies controlled by persons from unfriendly countries, how does this affect Eurasia's ability to conduct business, especially regarding potential deals involving Russian assets? Well, all I can say at this point is that we're looking at various legal alternatives as to how to structure a sale and we will report on the options that we're proceeding with as they arise. Are Norliss Nickel an interested party for buying assets? As people probably realize, I can't comment on who any counterparty is until a binding offer is made. So that's it it sounds like a poor answer, but it's the only one I can give.

4:41 Thank you. Other large Russian asset sales have been completed. What is presenting preventing a sale for EURASIA? Do the board of directors think they can avoid discounts, haircuts imposed by the Russian government, and companies from non friendly jurisdictions that are see seeking their Russian assets? The answer I'll give you is the same as the one that I gave just a moment ago, that is that we are looking at all the options on how we could structure a sale. And, again, we will report on that as they arise. Have there been any offers which you've declined? There have there have been offers. And some of them actually, you know, going back to before the Ukraine crisis were from largely from Western companies. But obviously, they didn't progress for various reasons and the geopolitical climate is the main reason why it has been far more difficult to find satisfactory counterparties.

5:40 Okay. Moving on perhaps to operations, the theme around that. Are there any plans to commence a mining program ourselves if the buyer buyers pull out or aren't found in the near future. If mining ourselves is the only option, when do you envisage this decision being made and a start date for mining? Our license in COLA are in good standing. And but there is one important thing and that is to say that the NKT project, is being brought to the mining license stage, should, for obvious reasons, being right next door to the Monchitundra open pit areas, they should be developed together. And so this would be the most efficient and profitable scenario is to have the joint development advanced, have the two projects developed together.

6:26 Thank you. Why did the board of directors decide to take a trade loan when they've clearly stated there is no issue in selling the concentrate stockpile and getting the funds back to the UK PLC? Will the concentrate be sold in order to repay the trade loan and prevent conversion and therefore shareholder dilution of the trade loan to shares within ninety days? If not, why not? When the stockpile is there, able to be sold and the directors have a fiduciary duty to shareholders. That's quite an obvious question, which we have to answer ourselves all the time. But basically, one of the reasons why we've opted to do this is getting the funds to The UK does require statutory approvals and indeed potential haircuts to use the phrase that we heard earlier. And as a large shareholder myself, I really dislike poor use of funds. And for this reason, we're looking for ways to minimize that. The asset sale still remains our priority, of course.

7:22 Can you explain how the company's recent financial flexibility, e. G, not drawing down the second tranche, the TFA, is related to any settlement or agreements. Does this reflect a stronger financial position or alternative funding source sources that have yet to materialize? Well, I mean, that's obviously just normal management of funds. That's a simple explanation. And as I said already, as a large shareholder myself, I'm always looking for ways to minimize costs and potential dilution. But at the same time, maintaining flexibility is just as important. Thank you. Can you outline the company's working capital needs over the next twelve months and how the board plans to meet those needs aside from the TFA? Well, as is implicit from what I said earlier about the concentrate stockpile, Working capital for the assets themselves can be provided by sales from there.

8:14 And as for our PLC, we've worked very hard on cutting our costs to the core, as you're probably aware from our announcement on the TFA. Are there any NDAs still active? If so, why? NDAs are non disclosure agreements which we put in place with each party that comes to look at our projects. And indeed, there are many that are still active. Until we are in a position to announce a binding agreement, we can only provide general generalized updates, not specific to any particular counterparty. Thank you. Do you have any links with SR? If so, what are they? That's a bit of I don't know why that question was asked, but I'm happy to answer. It's basically to say that our our director is he works with SR, and that is the only connection.

9:07 Great. Thank you. Ordinary resolution four is for the reappointment of Tamilan Abdekiev. Tamilan was appointed during 2023 and is the highest paid director. Can you provide some update to justify his reappointment? What is the rationale behind the change from nonexecutive to executive director? Well, when our CEO departed in 2023, my workload increased significantly. And Tamerlan happily was ready was prepared and ready to provide assistance over this last twelve month period where I was working on my own executive level. As an addition, it's worth mentioning that until recently, our banking was exclusively done through a Japanese institution. And he's a resident there, so he managed the relationship.

9:54 And then I shouldn't underestimate his his contribution in the sale process where he was very active in with respect to certain Asian and Russian counterparties. Thank you. The latest figures given for the WK concentrate confusing. June 23, we had 3,500,000 sterling. December 23, we sold 2,000,000. We now have 5,000,000. Well, in maintaining our ground at West Keppel in good standing as we are required to do, some additional concentrate has been added to the stockpile since the original figure was announced. Which Russian subsidiary secured the $1,300,000 loan? And what are the terms, I who's repaying it and what's it secured on?

10:40 The the this loan is a normal working capital loan for the operating mining company, Cosmisky Common, at West Kittlum. And it's based on managing the cash flow and the seasonal nature of production, which as you know is a summer mine. It it it works between largely May and now, roughly now, end of October. And then the rest of the time, it's on just maintaining doing some stripping work and keeping the ground in good standing. Have you found anyone at all who wants to mine Mocha Tundra? Of course. Because it's our main asset. And together with the NKT project, it is the main interest for all buyers who are in contact with us with a view to purchasing the assets.

11:29 Thanks. Now moving on. A number of questions around dual listing. When are you expecting to complete the list on the AIX? The plan is to do so. It's it's it's a short term goal, and we want to do it as quickly as possible. But bear in mind that there are counterparties that have to be looked after locally to make sure it can be done efficiently. Thank you. Is the strategic investor that Eurasia has been engaging with planning to buy shares on the AIX or via open market purchases? I don't feel I can comment on that just at the moment until our the transaction is complete. Thank you. Will the LSE AIM listing be maintained even with the Kazakhstan listing? The short answer is yes. Fantastic. Thank you. Okay. Let's move on to evaluation strategy.

12:18 First question we've got here, will we ever see the price of 42 p which was reached only a few years ago? Well, as we're all aware, the geopolitical crisis was a key driver behind the fall in our share price. It was entirely outside our our control and the reaction of the markets and the share price were directly related to that event. And meanwhile, we're doing our best to manage the business in a in a very it's still a very difficult environment. I can't predict what the share price will do, but let's just say that myself and the board are confident that the assets are worth more than the current share price. And just following on from that, what sort of share price are you are you now deeming as fair value should a buyout occur?

13:03 Well, typically what we would do if we get an offer and it's a binding offer, we would put it to the to the shareholders probably with a fairness opinion made by an investment bank or similar and which the board would recommend for acceptance and then would be presented to you, your shareholders for with our recommendation. In the recent r and s, you said for our strategy to be successful, what is The strategy is, as we keep saying, is basically to complete a sale of our assets as efficiently as possible. But with the proviso that it must at least ensure that the value is at the very minimum retained or basically improved.

13:52 Will you comment on the company's communication over the past few years? Yeah. That's probably the the sore point for I know from correspondence I get from shareholders who are in touch with me personally. And that is from a personal point of view, I found it really frustrating that we have not been able to debate issues with our shareholders to ensure that we we can find the best way to manage our statutory obligations in various jurisdictions, not just in The UK, and to monitor and ensure compliance with the sanctions regulations as they have developed, which they're they're also moving all the time. And this is a really complex job and I hope that today's webinar will demonstrate that we want to engage with shareholders. But, you know, we started out after the crisis began with quite strong legal advice to put it colloquially, keep the heads down. And we we look forward to trying to do more of this in the future now that we have a better understanding of both the sanctions regime and the various statutory compliance requirements that we have to live with.

14:58 Okay. Several board members including yourself have pledged shares and deferred compensation. Could you elaborate on the board's confidence in the company's future? Any specific catalysts that give you optimism for a successful outcome in the near term? Well, I think you get the impression that the answer is in the question itself. We would not be, betting our own assets and compensation if we did not believe in the company's future and the value of our assets. What are key milestones or announcement that shareholders should expect over the next three to six months? In the short term, we are doing what we can from our from our own domestic point of view, if you like. And that's the main thing is there to improve our the listing and there thereby the liquidity of our share. And, of course, the sale of the assets, which we hope we will be able to announce not in long future, but soon.

15:51 And the timing is difficult to predict, of course, precisely because the geopolitical environment is still difficult. But we're not betting on that. We're doing our best right now to try and get the job done. Just following on a little from the earlier question. How confident are you in the strategy given the amount of money both you and other members of the board have invested in the company? I think that I'll deal with that at the end because it's a it's a it's a it's a question which really wraps up quite nicely when we get to the end of our of the questionnaire. Sure. Is your belief that the actions you intend to take as indicated in the recent r and s will enable better enable a strategic exit from Russia and in doing so, increase the potential special dividend for shareholders in the next six months? I think that you can hear from what we've been from our commitment yet that we do we we it is our belief that we that we will do exactly as we said.

16:49 Okay. Moving on to MBO as we touched on it a little bit earlier on. Is the MBO the management's preferred option? Are we still in negotiations for a sale, or is this falling through? An MBO is just one option. Let's think about this. You know, a sale outright is the simplest solution, but of course, a partial sale is also an option just like an MBO is. We're considering whatever options are the most practical at this time. And we will, of course, keep you informed when one of the when the solution that we recommend proceeding with is announced. I can touch just a bit further on that. What would be the benefit of an NBO? What would be the time scale as well? It's it's way too early to comment. I mean, as as as I've just said, an NBO is one of the options and it is by no means a given that that would would be instead of an outright sale.

17:43 And just following on for that, rumors of management buyer are circling to take take out a very low price, which shuts out nearly all shareholders outside management. How true is this? And is maximizing shareholder value for all shareholders still your priority? Well, as a significant shareholder myself, I'm in the same boat as you, and I do not want to shut myself out either. Just to remind you, I've been working in Eurasia for twenty two years. And in that time, we've gone from working on what were really early stage exploration projects to now having an active mine and and two projects in COLA, which are capable of being, as they used to say in the old days, company makers, I e, very valuable projects. I don't think that we as a team, meaning the board and my other fellow large shareholder, Dmitry Zushoff, that we're betting our assets and compensation if we didn't think that this would help in in the development of the company's future success.

18:47 If there is an MBO, how long does it take before we can access our funds provided the subsequent voting for such passes? It's difficult to predict. We're back to the timing question and I really can't tell you precisely how long that's going to take. But basically, it's it's it's we're we're not waiting for events. We're just getting on with doing the job now. Thank you. And will an MBO bypass the mandatory Russian exit taxes, which are appeared to be an increase October 17 from 50% to 60% independent valuation and 15 to 35% exit tax. Well, as I said before, we're looking at various legal options and alternatives as to how best to start to structure a sale or MBO or partial sale or joint venture, whichever.

19:38 And we will we will do we will do that in the context of getting the best possible price we can in the current environment. Thank you. We've got a couple of questions. Thank you, Chris McGlynn on Sinosteel. Do you intend to activate sinus the Sinosteel contract if an asset sale cannot be realized? I think it's worth pointing out that the Sinosteel contract remains in place and can be activated by us or an upper any operator, a third party one, for example, who, you know, acquires the project can can piggyback in on the agreement we made with Sinosteel. The advantage of the Sinosteel contract is that it it it includes financial facility as well as the EPC contract itself. Thank you.

20:25 Next subject we've got here is Eurasia mining version two point o. Is two point o still a thing that's gonna happen? Or has the plan now changed to finalize one point o and leave it there? Well, obviously, it's kind of a little bit on the back burner because selling our assets is the key the key strategy. And we we expect that at least we all said it as we said back in December 21 that our our goal is that the proceeds of such a sale would be at least 80% would be would would make up a a special dividend for shareholders. We haven't changed our view on that. And at that point then we would discuss with shareholders going for version two. The priority remains the sale.

21:11 Thank you. And just a few other questions that we've got come through here. There's been some concern regarding claimants potentially disrupting the passage of resolutions at the AGM. Have there been any developments in terms of settlement or resolving disputes with claimants? And how is the company addressing the influence on shareholder voting? Well, as far as EURASIA is concerned, we're no longer a party to any dispute regarding the ownership of certain shareholdings. In that regard, we're therefore not in a position to influence what happens as it is subjudice. Thank you. What strategies the board of directors considering moving forward outside the sale of assets to positively affect the share price of the organization? Well, let me just summarize where we are at this point because I think people maybe lose sight of the fact that we're trying to look after the company in a difficult environment. We're trying to keep all our options open. We want to be able to do our best for the company in what has been really adverse conditions for the last two years. It has been difficult to manage the even the day to day activities on the mine and and also the development of the Munchotundra and MKT projects when we have to take into account a lot of different moving constraints on on our work. You know, people are a simple a simple example, we'll do a a laboratory that would have been we would

22:42 have been using routinely for years and may have suddenly appeared on a on a sanctions list and we no can no longer use them. This kind of thing is happening all the time. And so we have to be able to be flexible and able to respond to the environment that we find ourselves in. Remember, I I I'm sorry if I repeat the point, but I think it's important. We spent twenty I've spent twenty two years on this and in my and the team, the core team of of the people working in Russia and in working in the company. I've been working on this now for over a decade just developing and advancing the projects. So I I really all I can say is that we we absolutely are committed to getting a result in view of the fact that that the constraints are third parties, not ourselves.

23:30 Thank you. And why should shareholders vote in favor of the AGM resolutions? That question should be obvious, hope, from what I've been trying to say. That that is we we need support from the shareholders to support the actions of the board, which is, as I said, to minimize our costs to, in my case, putting up a guarantee to support third party financing as appropriate. Needless to say, I would like to limit that, but at the end of the day, we have to do what we have to do and that is why we need to have the flexibility which we're seeking at the AGM resolutions. We would like your support and I hope that we can rely on this because I'm very impressed by the fact that 600 of you had registered to attend the webinar.

24:18 I hope that means that some of you are keen to see that we are trying to do our best in difficult circumstances, and I can guarantee that we are committed to getting the job done. Fantastic. Thank you, Christian. Thank you for asking all those questions from investors. And of course, the company can review all questions submitted and publish responses where appropriate to do so on the investor meet company platform. I think we have covered off all those themes that we've got through today. Before redirecting investors to provide you with their feedback, I know it's particularly important to you and the company, Christian, can just ask you for a few closing comments, please? Well, I feel I've already said what I want to say about that, but I would just I want to thank again those people who've given the time to come and listen to our story and answer the questions that were put to us over the previous week or so.

25:09 And that we are hopeful that you that you would support us in the coming weeks up to the AGM and at the AGM itself, of course. Fantastic. Thank you. Christian, look, thanks for updating investors today. Can I please ask investors not to close the session? You should now be automatically redirected to provide your feedback in order Chris and the team can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of EURASIA MINING PLC, we would like to thank you for attending today's presentation. This concludes today's session and good afternoon to you all.