Eurasia Mining (LSE:EUA) — Q&A Session

0:00 Good afternoon, ladies and gentlemen. Welcome to the EURASIA MINING PLC Q and A session. Significant attendance on today's call, the company may not be in a position to answer every question received during the meeting itself. However, company can review all questions submitted today and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. And as usual, I'm sure the company will be most grateful for your participation.

0:31 I'd now like to hand over to executive chairman, Christian. Good afternoon. Good afternoon, everyone, and welcome to our webinar. Obviously, you saw our release yesterday, that's one of the reasons why the webinar has successfully been held in in this year as we promised. But it was touch and go, obviously, and we're very happy that we can now deal with a substantial transaction as part of the webinar. So what I thought I would do is just say a couple of words to remind you how we got here. And the first thing to say is that this project began both the EURASIA and the COLA projects began in early two thousand and supported by Anglo American who funded all the work that was carried out for the first fourteen or fifteen years through a joint venture structure that we had. And we were the managers of the Anglo work in Russia.

1:31 And it began on the Urals alluvial projects, which as you know is where the West Kittelman Mine is located. And the model Anglo had, which is the one that we continued with, is that the plan was that the alluvial mines, which are never big big deposits like, you know, hard rock mines can become, But they're smaller and usually quite profitable and throw off cash at the level that is required for exploration and development work elsewhere. And that's exactly what has been happening in the recent years, especially since the Ukraine crisis. So to summarize, that was really the background. And I was I've been involved in doing this work since 2003 pretty much. And I joined the company at and my main focus was in identifying the COLA projects as somewhere we should go in the future.

2:26 So what I'm going to do now is I'm going to go through a kind of summary which arrived, which we put together based on most of the questions that we get on the various chat boards, investor forums, and so on. And from that, I will then branch out into the questions that we received to date, and of course, as many of the ones that we are submitting live. So I'll begin by talking about the Arctic Brownfields to give it its new name newish name, which is Munchitundra and NKT. And basically, to say for first of all, I should say that the act of negotiations for the sale of that project also continues in a competitive process. And, of course, most of our value in in Russia is sitting in the Montetundra NKT projects in the Kola Peninsula.

3:16 And not only are they much bigger, like 300 times the value of the West Kittlan project, but they also have much more benign commercial background, excellent infrastructure, special tax regime in the Arctic, and other on the basis of our investments, we receive certain supports and guarantees from the government, as we have explained in previous press releases. So we are focused, obviously, on trying to get value from the the lion's share of our project. And to use a chess term, we we are now, if you like, setting out to sacrifice a pawn to save to save the queen or the king. And this exercise is this this transaction, which has been put before you yesterday, is basically focused on that.

4:11 The reasoning behind it, of course, is that we're better off in the Cola Peninsula where we received the support I've just discussed, but also because of the much higher value projects. Of course, we don't particularly want to sell the projects today under the current taxation regime, which is levied on foreign owners. But what we can say is that we are very, shall we say, hopeful that this situation will change perhaps as early as the first half of twenty twenty six. Basically, that kind of summarizes an overview, if you like, of what our strategy has been all along. So all along, we've been maintaining and pushing ahead, keeping the projects in good standing in in the Kola Peninsula.

4:59 And there, not only are these two key issues of the value and the better regime and so on, but also it's worth mentioning that we have a big first mover advantage. We are the people who have advanced projects the furthest of anybody else in the Kola Peninsula since the year there was, of course, a mining boom way back in the thirties and forties, which some in one mine, the one that is actually close to our NKT project, in fact, in the center of it, they that mine closed, I think it was the early sixties. And so we're really taking up the next phase of of base metal and PGM production. Moving then to other the other key things to say is that West Kittlamp has, on paper, been loss making despite the fact that it has thrown off cash, which has sustained our Russian activities, especially during this period when it has not been possible either to receive funds from Russia or indeed to invest funds in Russia to continue our development work. So it has been quite useful up to now to have the West Kittlum cash flow supporting our our presence in Russia. The the more recent crisis, has been created by the the worsening geopolitical view of Europe to to Russia means that, especially the funds that are lodged in Europe, this has caused us some

6:31 anxiety to say the least. And on top of that, within the Euros itself, the there's a much higher taxation regime. If you remember, a few years ago, went to court to and won a case to have repaid excess taxes that have been levied from us for a number of years. And again, we find that the taxation authorities are not in love with us, as you might imagine. And this means that the pressure from the administration in Russia has been significant on the West Kittlan project. So that's also a difference between there and the Kola Peninsula, where in fact we have our license renewed. MKT had an extension of two years, and we our detailed engineering work is completed and submitted for approval by the state authorities.

7:21 I would add, by the way, that in the memorandum we had written, it would be approved this year, and that was, you know, meaning it could have been as late as today or tomorrow, but it hasn't. It'll probably be the first quarter of twenty twenty six. Then looking at these are general points that have been raised, as I said, on the websites, is that people have inquired about the Astona International Exchange and what impact it has had. I would say it's been very slow to date, But we are going to be spending more time on improving the liquidity in Astana and to create a platform for people who do not use London any longer, in particular, to trade our share. The next big one that came up all the time, was what what what are the risks in Russia?

8:14 And, well, the risks are, you know, as they are at the moment. And, the geopolitical situation has governed all our activities to date. We've had to deal with the sanctions regime in the West. We've had to deal with the special taxes on foreign investment. We've had to deal with rules about repatriating or bringing into the country cash under the various regimes as well. And all along, we've managed to to manage the thing, I think, quite well. We have kept the projects in good standing, and now we are in a position where we can support the ongoing development in the Kola Peninsula without diluting shareholders in effect by by selling the our interest in the West Kittlom mine. And in that regard, I would add that the valuation on which the sale was based was quite good. It was 250 approximately $250,000,000.

9:08 It was the valuation by an independent valuer, which which of course supports our view that we were we were sitting on what was quite valuable assets in Russia. And but, of course, the COLA plinters are worth far more in every sense, especially with regard to the reserves and resources which would provide for long term producing assets in the COLA, as well as being capable of sustaining long term mines and more profitable due to the reduced taxation. The the other question that people have asked are what's our cash position and what are we doing about our burn rate? Well, first of all, I've explained just now that the Russia expenditure is isolated to Russia. So the cash that we raised recently in March is to look after EURASIA MINING PLC, which is, of course, The UK management company.

10:06 And we have we have been managing it very carefully, so much so that myself and the other main executive, Dmitry Sushoff, are not drawing down any salaries this year. We have accrued them, to be fair, but we have not drawn them down. And this also, the direct the nonexecutive directors have agreed on a very nominal monthly fee, and that will be also recognized in the future should we or sorry. I'll put that better. When we get the result we're looking for. But I'll I'll transfer the question. We believe we have enough cash to see us through to the mid twenty twenty seven, certainly, or thereabouts. So there was a question about the hydrogen and ammonia projects, which is we haven't spoken about in recent times, mainly because we are not developing anything new. We're maintaining our assets as they are and making sure that they survive the this difficult period that we're in at the moment.

11:07 So, obviously, the the future is, in some respects, out of our hands. It it rests on the geopolitical situation. And there remains there remains quite a bit of optimism that this is going to be sorted in the near future. There you know, there's this is not something we can control, but we will rely on, of course, because it'll have a big effect on the Arctic development. In particular, it has been spoken of several times in the press that The US is very interested in developing Arctic critical minerals, which of course, copper, nickel, and PGMs are very much part of. The other question that has been asked several times is that what about the directors and management? Have they sold any shares?

11:55 And no. The shareholding that I've had since the share price went up for the first time significantly in 2019 has been exactly the same as has been the other members of our team who are shareholders. And I could also add that in terms of shareholdings, we have seen an increase in institutional shareholders in in well, this year actually, who are taking a view, I presume, the great potential that these projects have in the event that the geopolitical situation can improve. There was one loose end question, which is what happened to the VAT refunds? They're fully up and running now, and there's no further hiatus there's no hiatus in the repayment of VAT that we incur in our normal expenditure.

12:45 So the one thing that happened this year, which I think is quite useful to know, is that the prices of all the metals that we are working in in the Kola Peninsula are have gone up a lot this year. And some of them are recognized as critical, particularly in Europe and in the West because of the control that China has maintained on a number of the metals on the world markets. Unfortunately, it's easy for me to say as someone who's worked in mining all my life, but basically, I've always been appalled at the way people casually assumed that it didn't matter where metals came from. Well, this has come home to roost. And, you know, the fact that we thought in the West we didn't need to be mining, that has been proved very wrong. So now, I'm going to go to the first set of what were quite nicely written questions from one person who came back almost overnight.

13:39 And the the this was the question whether our current strategy has changed. And I would just say the one change we have made is, of course, the sale the proposed sale of the West Kittlan mine, our shareholding in that, simply because it provides working capital for the rest of the group in in due course. You know, we have to obviously complete the sale, and the government has to approve it and so on. But at the end of the day, we are governed by geopolitics, and we are going to do our best to keep the projects developing, particularly Monte Tundra, which when its detailed design is approved, is ready then for for development and production. We want to make sure that we don't lose the momentum that we've created over the last well, long long term since, you know, since basically, since we we got the mining license in the late twenty sixteen, I think it was.

14:40 So in in terms of protection of the projects and so on, it is good that we have this agreement with the with the Arctic group that supports investment in the Far East and the Arctic, and in what they considered poorer areas of of the Russia Russian country. And it that's the pros it's very similar to special economic zones that other countries create from time to time to support investment, which, of course, we have been doing for a number of years in the Arctic. So oh, and one other question that this person asked was the the the SinoSteel project. Basically, it's a it's a Chinese company controlled by the state and there are no restrictions and they've been active in Russia since throughout this whole period that we've been through since '29 2022.

15:41 And this the the the one question that came up was post disposal ownership. Basically, the sale is limited to West Kittlamp, which is basically the shareholding in Kosminski Kammen, is the holding company. We have 68% of that. And there was another license held by Kasvinsky Kamen, which was done at the time for convenience called Travenaya, which is adjacent to the NKT project. And it is being transferred to the group as part of the transaction. And basically, there are no no management affiliated or related party entities involved in in the Arctic companies other than the we have 80%. There is a minority shareholder of 20% in some of the some of the projects. But basically, we control as the company the rest of the shareholdings in the Arctic.

16:41 So that is the main questions that were asked. Let me just check the other ones that came in. I'll go down the ones that are on the screen now in a moment. Yes. This was a question relating to our announcement during the year that we'd ramped up. We are ramping up the development of West Kittlamp with a view to doubling our production from next year onwards. And as part of that, we were trying to get to that point during the 2025. And unfortunately, we didn't do that, not because our the team and the equipment and everything performed greatly, but the volumes ended up being lower than planned. And as a result, we did not achieve the higher targets that we'd set ourselves at the beginning of the year.

17:32 We more or less came in similar to what happened in 2024. So, obviously, we put a lot of money into developing the the mine in the past and it is not unfortunately possible for us under the current regime to repatriate that cash back to The UK. So, obviously, the best thing to do with the cash generated and the reason why we agreed to do it is to support the development of the much more valuable COLA based assets.

18:06 So the question is the other question that came up on the question of the buyer, the question was, do any of us do shareholders or related parties or directors have any interest in the whole in the in the in the shareholding of the purchasing company of the buyer? And the answer is no. There is no there is no relationship whatsoever between Eurasia parties and the buyer, Chaos Logistics. So now, I'm going to scroll down the ones down that have come in. Yeah, the question is 9,000,000 won't go very far. It will actually because one of the main things to say is that the SinoSteel contract has within it various loan structures and so on that allow us to gear up the development as the thing progresses.

18:59 And it was designed that way, so that Eurasia wouldn't have to put a lot of money on the table in the early stages. But nevertheless, we do have work that has to be done to keep the things in development in the short term and that's for that, the funds are adequate. A lot of geopolitics questions here. Another one, yes, geopolitics are trending towards peace in the near term. We agree with that. And so what about the extra taxes? Why are we selling West Kittlham with the 95% discount? We're doing it for the cash, basically. So that we continue to support our developments. And we are very concerned, which I did touch on before, but I reiterated now, is that there is a real risk that's not apart from the nationalization risk of an operating mine making good cash flow, if not profits. The profits are for us because the capitals are not yet the capital is not being recovered. But for a third party acquiring it for, let's say, nothing, then clearly, this cash flow would be very helpful for anybody who picked it up. So, yes, it would be it was a concern of ours. And on top of that, the taxation involved in operating next year was also going to be a bit of a struggle because they were being they were being difficult again.

20:16 So, you know, we just have to be aware of those problems. And I have touched on the question of how's how's safe is COLA. Well, it's much much better for the simple reason that we have the agreement with the Arctic Development Agency. It's an investment program, inward money going into the area as part of the development. We have support from the in terms of buying prop acquiring property, sorry, as part of the development. And also I mentioned the taxation regime and this is an agreement that was legally binding between ourselves and Arctic organization which supports the development programs there and in the Far East. So the question is, the sale to a third party and how advanced is that? Well, it's basically a competitive structure and now we're not in a hurry, particularly because we don't want to sell under the current regime and, you know, we really should try and make sure that we are going to sell when the asset is going to get its full value.

21:32 There's a years of dilution and shareholder value destroyed. Well, I'm afraid exploration companies have a bit of that. It's true. But at the same time, we have done worked very hard to keep our shareholdings intact since the final, if you like, realization of the market in 2019 that what we had acquired was worth a lot. And as a shareholder, I am very happy to remain a shareholder of a company that has done, which in expiration terms is really unusual, and that is create significant value over the twenty years that I've been involved. So I don't agree with that comment. Basically, the the the key point another question comes in here asking about the concentrate. Basically, concentrate supports the cash the cash costs in West Kittlin and in Russia and has done so for the foreseeable. In the meantime, we're, you know, financially, if you like, isolated from from investing further or recovering income from the mine. We can't do that at the moment due to sanctions.

22:43 The question is question came here about other than the board directors and advisors, have any other parties had an input with regard to decision to sell West Kittel? Well, I don't know who you who that would be. I mean, basically, we are the people that have to act on behalf of our shareholders and you will decide in voting for this and I'll come back to that at the end.

23:05 The the the I'm just reading down through here. There are a lot of them are overlapping with previous questions. So I you'd excuse me for not repeating the answers at at nauseam and boring everybody else. Excuse the French. The

23:23 yes. Does the sale of WK make it easier to sell the rest of the company? Indeed, does. And I would actually refer to the fact that one of the things that we benefit from, it's an it's not a direct benefit which we care particularly about, but it does make our life much easier administratively from an audit point of view and administer an administration that we don't have to look after the equipment, making sure we have the inventories all kept in order. It is a much simpler company from that point of view, from an administrator point of view. And from a sale point of view, the buyer of of the of the mine, which is not a mine that a big mining company would be interested in particularly, it would be one that suits a smaller purchaser and that is the case here. It is a, you know, it is a special purpose company that has has that invests in various assets which in their opinion are undervalued and that's exactly what what what has happened here.

24:28 Obviously, we would have a question to do with accounts and I'm a geologist not an accountant, but there will of course be a setting off of the values that are that are on the balance sheet for West Kittelman for the for the mine that would be written down against the $9,000,000 which we would receive. So that is that is the reason for we've explained why the we we're using it to make sure we have cash to continue the work in the co in Cola.

25:04 Sorry. As as yeah. This is a question which goes back to what I said before. Given that we've now sold our only income generating asset, how did the company plan on funding the Arctic assets? As I explained already, we are going to obviously look at bringing in the Sinus Steel contract during the year. In the meantime, the cash that we generate from the sale are is going to support the development of the of the MONCHE TUNDER projects. The question here, which is exactly what I said earlier, would a sale of of COLA be current subject to 95%? At the moment, it would, which is why we don't want to sell it right now.

25:59 The the question about our current financial situation, I've answered that question. Exit taxes in the Arctic, that's the same question. There's a lot of questions here that overlap and I apologize if if we if I don't repeat them all. I hope I've made it clear what I'm trying to say and I'll summarize perhaps again at the end. But yeah. There's a question here why does the company not just sell some concentrated? We do and we have done, basically, just just to keep the project going in the in the keep the projects alive and indeed developing the increased ramp up which we had begun in 2025.

26:52 Here's a question which is is, you know, why why the sudden change in our plans to suddenly sell West Kittlum? I don't agree. We've been saying for years that we're going to sell both projects. And the only thing you could criticize us for, and we've explained why, is why are we selling West Kitlam when we have this taxation problem. And we did look at ways to avoid the the heavy taxation and this is not possible. And on the other hand, because of the risks involved, we decided it was better to look after our the big project and if you like, sacrifice West Kicklum for the cash that will help us support what we're doing in COLA. This is a good question. How is the sales process competitive under the current legislation where the price is set independently prior to at least we got a real valuation for the project before the discount happened.

27:52 I mean, we were you would be delighted to know we got a a wonderful offer about a million dollars for the project, which means discount that to 5%. It wouldn't be very interesting. So, you know, in that respect, the the 251, million dollar valuation has served us well in the in the circumstances.

28:22 The probably one of the questions you could ask, and I I see it here coming in different ways, but ultimately it is, what what would be our view of selling the project or selling West Kittlum in the event that suddenly all sanctions were removed, the the tax the excess tax was removed and so on. We we the board has put forward a motions there which allow us to be at least flexible. What we need to do at this stage is get your approval to sell West Kittlamp. And of course, if if it turns out that it is better for us not to do so, we will not do it, you know. But at the end of the day, right now, it is the best solution to create the value we need, in the in the Kola Peninsula. There's so many questions. It's just amazing. I believe there's something like 500 people have, registered for this meeting. So you'll excuse me if I don't manage to give all the questions the the attention that they obviously deserve.

29:42 So basically, I think pretty much all the questions that I've seen so far are are covered in what I said at the beginning. So perhaps the best thing to do would be do a recap of of what I have been saying. So and and because that's the simplest way of and if you if you're I I trust that your questions will be covered in in this this review. So basically, I began with explaining that, we push, West Kittlman up for sale because we wanted to support the other projects we hold in Russia. And we we believe that the the funds that we will receive for that will help us achieve that goal.

30:29 And equally, we do need to keep that project ticking over and developing because otherwise, it will be in default with the government anyway. But the important part is to keep developing Munch Tundra and MKT and bring it forward to mining because that's what we're that's the best way of getting the results that we need either through a sale or the actual mining of the project. And there is potential, in fact, for early stage mining possible by late twenty twenty six if we get our development plans approved and we push ahead. It is just possible by doing what they call toll mining, which is you mine your a small open pit and you produce ore and you you have it processed by a neighboring plant. And that's that's one option we could look at. There would be lots of options which we will look at in the coming months. But ultimately, the the most important thing is is to keep the the jewel in the crown that the company has going and and optimizing its value either for sale or for its operations.

31:35 And in on the current regime, a sale is only interesting if we can do so without the haircut, without the severe taxation which is being applied to foreign owners with assets in Russia. I've explained that the assets in COLA are worth 300 times what West Kittelman is is worth, basically in terms of in situ metals and also big long term projects that are of interest to big companies as opposed to West Kittlamp. West Kittlamp was, even back in that Anglo joint venture I referred to at the beginning, which was the the basis of their assessment as well, is that West Kittelman would always be a good cash flow to support exploration development work. But in itself, as a mine, it wouldn't fit in the profile of Anglo American itself.

32:37 I think I've covered all the other oh, yes. Sorry. There was one question here I didn't touch on and that is, are we planning to reinstate the Ross Geo JV? We can't do that at the moment because of sanctions regulations, but basically, we would be delighted to and the Ross Geo have not been doing it. They're they're not they're not very well funded, And so they would welcome us back, but we have to obviously comply with the the sanctions legislation in that we live with here in Europe and in The UK. I should say that our main holding company, if you can see from the structure in our annual report, is EURASIA MINING PLATINUM, which is a cyberspace company. And for that reason, we have to be aware of both European sanctions and UK ones.

33:34 When do you think shareholder reward for the patients? You could ask me. I've been here for twenty three years now and I'm patient enough. And I'm very confident we're gonna see a result from this. You know, the the we might not have had this conversation twelve months ago, but now with the clear improvement in the relationship and the possibility of the Ukraine crisis being solved, we do see a future for the project and the company.

34:09 Yes. There's a couple of questions here I'd love to answer, but I I'm not able to for other reasons. One of them is wondering why we were so quiet during the period of the last couple of years. And the simple reason is we had real difficulties dealing with the sanctions regime and with the Russian rules and so on. And and we were just treading very carefully to make sure we did everything right and we kept all the projects alive and active. Some other companies have not been quite so fortunate and we have been. And I would also point out that shareholders may not always appreciate how difficult it is to manage projects when we have those kind of constraints. And we've just we've just tried to do our best and I'm very happy that we've got to where we are without any damage to the business that we've been running now under these constraints since 2022.

35:07 There was a question here about the the the loans to Kozminski Common, basically, loans are are part of the the structure of the the accounts which will show what has happened to those numbers. I'm not an accountant, I can't answer those numbers directly. I haven't looked at that specific aspect of the transaction except to say that we are starting the project. It was it has been loss making because we never managed to recover the capitals that we've been investing over the years, but the cash flow has been really helpful in this period when we were unable to invest in Russia ourselves. It has supported our business going forward and the money was effectively the word trapped is wrong, but at least retained in Russia because it was easier it's really difficult to remove funds from Russia at the present time. And and as it happens, it it supported everything we were doing in country.

36:06 So no money was sent from from Eurasia PLC for quite some years. There are people asking again about SinoSteel. Are we going to keep it alive? Yes, absolutely. I explained why. Basically, it allows us to develop the project in in full subject, of course, to any constraints that apply to investment in Russia.

36:47 I think I pretty much covered. There's a lot of questions here, but most are the same. I think I think, Christian, I've I've been monitoring as well. There's a lot of themes that I think you've touched upon. There's perhaps some that we haven't got through maybe because there's just so many questions that keep coming through at you. We can make these questions available to you post today's meeting. So if there's anything else that you have missed that you feel Yes. Okay. Important you can add there. Thanks for your help. It's a bit overwhelming to have so many people here and as well as that all of them or rather a large proportion of them asking questions. So, yes, thanks thanks for that observation. No problem. Well, look, what I'll do is I'll shortly just redirect those on the call, Christian, to give you any thoughts, any feedback that they may have. As I said, obviously, there are a number of questions. Scott, Ian, Deepak, lots of questions here. We will make them available to you and and publish any responses that you feel appropriate. But perhaps before

37:43 doing so, maybe Krishna, I could just ask you for a couple of closing comments. And then as I say, I'll redirect those on the call to give you their feedback. So to summarize, the board considered its options going forward as to how best to deal with the the tricky situation that we have at West Skiplam with the Coswinsky Camden Company and the current operating constraints that we're working under. And we have decided we decided that it was best to put forward to shareholders the sale of our shares in Cosvinci Common so that we can support what we believe is the real value of the company. And the fact that most

38:28 most people can see that the that these much larger resources and reserves, which we've commented on several times already, that it is it it will be the foundation of the future of this company and is more important than anything else that we have put to put to you from time to time. I would I will I will argue that it's very simple to say, oh, why don't you just keep the mine and the cash flow, we'll keep paying the development and so on. That assumes that that the that we have a a bottomless pit of money to support the continuing continuing added development of the West Kittlin mine and it assumes that the taxation regime is friendlier than it has been to date.

39:17 So from our point of view, operationally, the risk is is covered by having a buyer come in now and provide some cash that allows us to continue the work going forward in Russia. I would also comment that the the the share the share purchasing today was has been quite interesting in that, you know, we have some 40,000,000 shares traded, which suggests that other people do believe that there is something going on that's quite interesting. Basically, the value is being retained in what we've been trying to build for some time. And we are very we are very committed ourselves to getting this project this company over the line.

40:04 You know, I've been involved in many exploration plays and and companies over the years and it's really important to be consistent and to be and to be and persistent because quite often you get these hiccups they can cause you to question the fact that you've actually focused on assets that are worth a lot of money. And that is exactly where we are now. We we believe in these projects. We want to see them through, and we we hope that you you will feel able to support the efforts that we're putting in to get this over the line. Thank you. That's great, Christian. Thank you very much indeed for updating investors. If I could please ask those on the call not to close the session, as we now redirect you the opportunity to provide your feedback in order the company can better understand your views and expectations.

40:56 This may take a couple of moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of EURASIA MINING PLC, I would like to thank you for attending today's presentation. Happy New Year to you all, and wish you a very successful 2026. Thank you.