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Bellers, you just agreed with my point. Your hypothetical house will be based on similar house valuations in the street or area. If they are all worth 100k how can you put a value of 1m on yours. Doesn't make sense right.
These deals are based on discounted expected cashflow and profits. If the DFS says EUA assets can generate billions in cash flows and profit similar to Sibyane without any outlay then sure someone will pay is 15bn, it is possible.
Billions, that’s a load of skcollob. I can sell a house but don't have to prove I can construct one. I only have to prove it's value. I leavethe construction to the likes of Redrow. The agent gives the value after his expert diiligence.
Eua may end up being at this level but will takes years and many millions for it to reach there. Hence any sale will be benchmarked against the likes of Sibyane but with a heavy discount. Again this is part of the DFS. Really wish management would publish this to make is clearer.
2 years since suspension Billions? I knew I felt a lot older but I’m certain the suspension was started mid Feb 2020 and concluded July 2020. Huge gains prior and after for those of us invested then. Happy days!
MJS and all, the failure to press the big green button with SS is a clear indication of EUA’s plans. It completely avoids having to untangle a contract which could get difficult/messy for the buyer such as NN should the agreement of already gone live.
I think most of us have all come to the same conclusion on FSP being pretty much nailed on in one form or another , it’s just a bloody shame none of us have enough information available to put a price on it? The Powerof78 certainly helps but even that might be a million oops sorry billion miles away........
'They have 82m oz reserves and 477m oz resources and they are a derisked and generating billions of cashflow. Unfortunately Eua need to demonstrate extracting and selling of the resources to be valued fully.'
Well, this is the thing, they haven't had the opportunity to do so, and in this is where it gets interesting, for all intents and purposes at the moment, EUA is a small fish, but with the right tactics? Anything is possible.
The SS has been there for a while, it hasn't been activated, why? Every interview I've seen from CS was suggesting to the fact that they were almost ready to get the ball rolling. Smoke and mirrors to entice buyers? Maybe, either way it worked.
Clearly, whoever is bidding for the company has seen this development and has decided to step in before it's too late, and whoever is going to acquire the assets, you can be sure they know exactly what value they will be adding to their own balance sheet over the next decade.
I think the DS and CS have played the game perfectly and are about to checkmate.
Yes Monmuzard you are correct. The SS mcap may even be $15bn, see different figures in different places.
They have 82m oz reserves and 477m oz resources and they are a derisked and generating billions of cashflow. Unfortunately Eua need to demonstrate extracting and selling of the resources to be valued fully.
A couple of billion is still my estimate. If Dmitri can get more than he is the best salesman to have lived
@Billions - Yes, Sibanye-Stillwater's market cap is about $12bn, and the former paid around 1/5 of that to acquire the latter. It is, then, quite plausible that NN would pay a similar fraction of their market cap to acquire a single asset which will be generating potentially far more than $1bn a year once in full production, and will therefore increase NN's market cap substantially.
@mjs - I have had exactly the same thoughts as you. Every bidder will have been thinking in multiple billions and realising they can still make money, and all the while NN will be knowing that, no matter the price, they cannot afford not to buy it.
@Hoochy/Gary - I agree, the money side will be the easiest bit. Companies, especially those in a sector where the assets are finite, aren't like people: the last thing they want sitting on their balance sheet is large amounts of cash. They need to secure future revenue streams, and will spend big when those streams are fewer in number and getting dryer.
What is quite interesting, it's widely mentioned that the BOD have had discussions of a potential sale of these assets way before the FSP started.
For them to even progress to a FSP, this suggests that the discussions over the suspension period were very productive and that potential buyers have shown their appetitie to stump up the money to acquire the assets.
Then I think about the professional advisors, UBS and DLA Piper.
I feel like those names during the first few months of the FSP were used as a hype machine to sell the legitamacy of the FSP, but they shouldn't have, because the track record of the company and BOD sold itself, the additions of such well known and highly specialised M&A organisations running the process, was a bonus.
And I think this is where market has missed it completely, the market has been so obsessed with the idea of a conspiracy, too good to be true or a fire/panic sale by the BOD, that it has completely ignored the relevancy of such professional advisors at the table and what positive consequences may result of such a thing.
I always thought £1-£1.25 (I got called out for deramping when I posted that here a little while ago) would be the most reasonable price that a buyer would be willing to pay, but I've been second guessing my prediction recently, going over the RNSs, the interviews and with the way the prices of the metals are going, I've started to feel like we would be getting ripped off at that price.
I'm genuinely starting to believe that £1.50-£2.00 may be the minimum price the BOD will sell for, this level of advisors were brought on to the table for a reason, and I think the market is in for a massive shock.
"I’d love a $10bn sale as it would net over £7-9m profit, sadly I think that it’s something the board of somebody such as Nornickel could justify to their shareholders. After all, it’s 1/5th of their entire market Cap".
Yeah, and what would their market cap rise to once they had Eurasia on the balance sheet? It would certainly be more than it is right now, and it would, over time, be much more than $10bn. I've said it a few times lately: you have stop looking at the buyout price as "a cost" to the buyer. It costs them nothing. They are simply switching a relatively smaller amount of cash for a relatively much bigger asset. The overall value of their asset base and therefore company will rise ... dramatically.
PGM prices are rising because they are in deficit, and are forecast to that way for the foreseeable. So I’d say that makes a sale more attractive to buyers, can they afford to miss out on the only opportunity of its kind? can they afford to allow it to go to their competitors.....