JOHANNESBURG (miningweekly.com) – Precious metals miner Eurasia is in offtake negotiations with commodity trader Glencore, Chinese group Sinosteel and other unnamed parties for the life-of-mine production from its Monchetundra platinum and palladium project in Russia.

In a projects update published on Monday, the company said that it hoped to reach an agreement with one of these parties in the near future.

The agreement should integrate with the already agreed and signed engineering, procurement, construction and financing contract with Sinosteel, which includes financing of $150-million as a ten-year facility.

Eurasia noted that a tightening supply of quality concentrates had raised the interest of refineries in upstream platinum group metals and copper/nickel assets, pointing to the recent $712-million acquisition of the Kevitsa mine, in Finland, by Boliden.

“The status-quo situation of recent years is reversing and refineries, reacting to a looming shortage of quality feedstocks, are reaching for quality upstream assets.”

Eurasia also noted that the solid performance by the metals in the Monchetundra concentrate was benefiting its offtake negotiations. Palladium has increased by 36.7% year-to-date, platinum increased by 9.9% year-to-date, gold increased by 13.6% year-to-date, copper increased by 31% year-to-date and nickel increased by 19% year-to-date.

Eurasia has all the necessary contracts in place to apply for its mining licence and said it planned to officially lodge its application this month. The Monchetundra project has a 1.9-million-ounce palladium-equivalent resource.

Meanwhile, the West Kytlim mine – the miner’s operating platinum, gold, iridium and rhodium mine in the Ural mountains – is progressing.

Eurasia said an increase in reserves was calculated over the mining area at Malaya Sosnovka, owing to higher-than-expected mining grades and orebody extensions discovered in the 2016 mining season. These reserves were being developed as part of the 2017 mining season.

A mining allotment and quota had been agreed over the Kluchiki area for the next season of production in 2018.

Eurasia said 1 490 m of resource upgrade drilling was completed earlier in the year, at the Bolshaya Sosnovka and Kluchiki areas. These samples have been processed to allow conversion of C2 category reserves to C1 category reserves. This would ensure mineable reserves for the 2018 and 2019 mining seasons.

A further 390 m of large diameter infill sampling is planned for autumn.