The office of Russian Prime Minister Dmitry Medvedev has official approved the mine permit for the Monchetundra platinum group metals (PGMs) and base metals mine, Aim-listed Eurasia Mining reported on Wednesday.

The permit was awarded in November, but required approval from Medvedev’s office.

The company is now authorised to start construction at the two-million-ounce palladium-equivalent State-approved reserve and resource on the Kola peninsula, bordering Finland.

Eurasia has a contract with Chinese group Sinosteel for an engineering, procurement, construction and financing contract, valued at $176-million, for the contract. A $50-million subcontract is specified within the contract and is assigned to Eurasia's 80% subsidiary Terskaya Gornaya Kompany, or a subcontractor of its choosing, for engineering and pit development works in advance of mining.

“This is the start of a new chapter for the company and its ambitions. Our commercial arrangements regarding the Monchetundra project development can now be realised at this large low-cost PGMs and base metals project.

“The issue of this mining permit represents a sea change for the company, as this is a major project which the company intends to develop alongside our West Kytlim PGMs and gold mine, which achieved steady state industrial scale production during 2018,” said MD and chairperson Christian Schaffalitzky.

The mining licence is the first hard rock PGM mining permit to be issued in the Russian Federation since February 2016.

“The vast majority of permits issued in Russia are for gold projects, and it is also quite rare in the current phase of the resources cycle to find an exploration company taking a project all the way from greenfields exploration through mine permitting. Now we progress onto mine development and production, at Eurasia's second mining licence, based on its own discoveries, issued in less than three years.”

The company further noted recent price gains in palladium and the all-time high that the metal has hit, stating that it was particularly beneficial to the project.