Interview with Dmitry Suschov, Member of Board of Directors, Eurasia Mining

My name is Dmitry Suschov. I'm in the esteemed mining projects primarily in the exploration stage. So I take the exploration risk and then take the projects to feasibility study and ultimately to production. In terms of my background, one of the first deals I made in the mining space was industrial minerals. I sold a top-quality silica sand mine and silicon carbide production which was the second largest globally after Sangaban of the French company. I sold it to Carborundum Universal, the company which is publicly listed in India but Murugappa Group. Then I was in different mining projects, in particular recently in PCI coal, and we built a lot of large producers. Started production in 2011 and then gradually developed quite a substantial global market share across Europe, Asia, and even up to Brazil. And now entirely focused on PGM and base metals projects. So the first project to production in 2016 which started as a joint venture with Anglo American, the largest placement producer globally. We started the joint venture in 1999 and then I bought out the English in 2014 and two sons seen with this project of production. And I'm taking the production second project which has Sino state-owned enterprise from China as a partner.

Right, so in terms of Russia, right, started from it. Russia is a little bit of a now country overlooked by the global mining community due to a number of factors including the sanctions. And at the same time, if you switch off the TV and look at the facts, you will see that the Canadian companies – and we are at the Mining Investment North America conference in Toronto, Canada – the Canadian companies like Barrick, which is the number one global producer of gold from Canada, is very successful in Russia. They made a big major discovery in the PGM segment, a mine very close to mine, just 40 kilometers away from my mind. And Kinross, which is another big mining company from Canada, is extremely successful in Russia. In fact, Kinross is making all the money out of Russia and they are not so successful anywhere else. They are actually making losses and they're covering those losses with the huge profits generated out of Russia. So if you look at Canadian companies, they are extremely successful in Russia. And in this sense, Russia is really overlooked by the mining community. And the fact is that the cost of mining is very low. That's why Kinross is making a lot of money. And this is due to very low cost, and this is driven by a number of factors like Russian rubles devalued by two times over the last several years when the rate went from thirty rubles per dollar to sixty. And that's just half the mining costs in terms of US dollar terms. Plus you have very low electricity cost, cheap diesel cost, federal labor costs. All in all, Russia is definitely on the very bottom of the global cost curve whatever commodity you're looking at.

Right, so blockchain is definitely a very important technology across different industries and that's for sure the future of the Internet. The Internet is developing in cycles and we are in a new decentralization cycle. So the Internet with more decentralized synthesis definitely benefiting everybody. And as far as the application of blockchain technology in mining is concerned, we have a number of applications. One that is quite major is related to traceability. I got a very good presentation on cobalt out today regarding the traceability of the origin of where the cobalt comes from, like your trace in your own DNA. Yes, sir, so you know where it's coming from. And that's very important for the consumers because there are companies like Tesla and others that are really concerned about where the raw materials come from, whether it was legally and ethically mined. So that's where the blockchain comes into play. You can trace down to a particular mine. Also, what I think is very important is that blockchain allows you to have investment instruments that are metal backed. This is very important because you have a number of derivatives nowadays like ETFs for gold, etc., that allow you to invest in particular metals without actually having to physically store them. At the same time, those instruments are not metal backed; they are paper products. So you are wondering where your metal list might not exist. So basically what blockchain allows is to issue tokens that are high percent metal backed. And that's what we are doing in the PGM space now, and pledging particularly because there are not so many instruments to invest in platinum bars for example. When a private investor wants to buy a platinum bar, they need to pay a much higher price over London. And then if a producer like me is selling the product, I'm selling at a discount in London. So there's a big margin staying with intermediaries. So we address this margin plus we reduce transaction cost and storage cost. So the investor just buys a token and doesn't need to store a physical product. And there are a number of banks, particularly in Japan, South Korea, and even in Switzerland, that are trading metals and also trading the crypto instruments. So you just open a bank account with Swissquote and you buy metal or you buy a token which you can physically redeem for metal at any time. So basically that allows you to not be exposed to the bullion risk or exchange risk. You are shifting this risk to the bank. And at the same time, it allows you to not necessarily buy physical metal and have to store it and incur storage costs and transaction costs. You can just keep the token and you can redeem it for metal at any time. Thank you for talking from... so that's how it works. And that allows private investors to buy metal in very small quantities. Plus it allows hedge funds to diversify their portfolio because there's a bunch of hedge funds that are now focused on crypto investments and their portfolios are highly correlated. All the instruments are highly correlated. Bitcoin goes up, the whole portfolio goes up; it goes down, the whole portfolio goes down. So those portfolios are really not diversified; they're highly correlated. And hedge funds by definition are to hedge. So the token that is metal backed allows diversification because it's not correlated with other crypto. And that creates a hedge for these kinds of hedge funds, and they are very interested in this kind of instrument.

It's a very good event. And I see that Russia and they represent mostly Russian mining projects. Russia is well received here in the Canadian community. Firstly because as I mentioned, Canadian companies are extremely successful in Russia. Secondly, I see that now that America has shifted its pressure from Russia and actually is exposing its pressure on trade with countries like Canada, particularly I see that Russia is not so much considered as an enemy but rather as an ally. I think that this is good. And I see that people are very, very welcoming here. There have been a lot of good speakers at this conference. And I think that we definitely need to expand this event going forward.