Eurasia Mining Plc has entered a US$176.0 million contract for the development of two platinum group metal deposits at the company's Monchetundra license area in Russia.

The company's 80% subsidiary, Terskaya Gornaya Kompaniya, or TGK, signed an engineering, procurement, construction and commissioning turnkey contract with China's state-owned Sinosteel Corp. for a 1.7 million-tonne-per-annum beneficiation project at Monchetundra.

Sinosteel will be responsible for the debt finance of US$149.6 million, covering 85% of the contract value, as a 10-year loan at an indicative interest floating rate of six-month LIBOR plus 3.5%.

A subcontract for US$50.0 million is assigned to TGK to cover all preparatory engineering and pre-strip works on the two open-pit deposits, which will meet the 15% equity contribution required for the project.

The contract is exclusive to Sinosteel for a 10-year period and is conditional on securing all the necessary permits from the government, according to an Oct. 10 release.

Ongoing feasibility studies at the two deposits, Loipishnune and West Nittis, are expected to be complete by year-end.

The contract is being advanced as part of discussions with third parties for the sale or joint venture of the project.