The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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MMC Norilsk Nickel PJSC was already the No. 1 miner of the metal used in autocatalysts, but is there a new player on the market gaining market share. Eurasia Mining are certainly raising a few heads emerging as a key player in the market. Their operations have barely missed a beat, while its main rivals in South Africa are struggling to ramp up production after shuttering mines during a national virus lockdown.
“Norilsk Nickel has always been considered as the last company to die,” however Eurasia Mining have flown under the radar and have emerged Global Markets. Additionally, they are one of the industry’s lowest-cost producers. “The pandemic only highlights it.”
By contrast, top South African miners, such as Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd., have cut their production targets, while Sibanye Stillwater Ltd. has suspended its forecasts. Some high-cost miners in South Africa, where palladium is produced as a byproduct of platinum mining, are losing money, according to Citigroup Inc.
Demand for precious metals will increase from car manufacturers in early 2021. With South African miners scaling back on new projects, it may take six to seven years for the nations palladium output to recover. Russia mining industry however will gain a larger market share and with Eurasia Mining currently up for sale for an estimated 7 billion US dollars could this be the ideal moment for Norilsk Nickel to acquire Eurasia Mining? Some in the industry think so, others believe China may buy in whole, or part. Whoever buys Eurasia Mining knows the resource in the ground will be in high demand.
In Q4 2020 Platinum posted a deficit of 170 koz as strong demand in the auto, industrial and jewellery sector sustained strong investment demand for Platinum.
Supply is weak
The deficit for the Platinum market was the largest on record with a 2020 total of -932 koz. Total demand dropped by 7%, the sharp decline in mining supply of 20% (1203koz), and the total supply fell by 1413 koz.
A deficit is set to remain
As economies get back to normal on the global vaccination programme the demand for platinum is forecast to increase by 3% and supply to recover to 17%. The net result, however, is still to be a deficit of -60Koz in 2021 with a third annual deficit.
Arsenalles
I hope your right mate but the longer that this goes on the more the value should go up. People are getting bored now as the time it is taking the shares are getting hovered up by thee big boys.
Denby69
Agree that this will be bigger than we all thought but can they afford not to buy it
Some are backed by the government so money is no object
Depends on the financing. It’s true that many won’t have billions in cash on hand, but it could be financed, especially if we’re talking sovereign wealth standing behind it too. But don’t forget: any buyer swaps X-billion in money for assets worth XXX-billion. Their balance sheet is consequently much stronger, and the value of their company (and ability access more and cheaper finance) increase accordingly.
I agree with Phil's post. We have an asset of global significance. There is global interest.
It's not for nothing that EUA was chosen to represent Russia at Indaba. That was just over a year before the recent JV with Rosgea - a company wholly owned by the Russian government.
Montmuzard @
If the post is right this is far to much for anybody's pocket don't think any one has the money to buy EUA
Careful there Mont, you're sounding like Hoochy!
I'm personally finding it hard to balance my utter boredom with this stagnant FSP, and the likelihood that what is being worked on in the background is absolutely incredible. Pieces like this definitely help to round up all the highlights as a reminder of the potential here
Reading Phil's piece has put an extra bit of wind in my sails. If you read and consider it closely, I think he's saying that some of the more fantastical predictions might not be beyond the bounds of possibility.
"It reinforced my belief that this is a once in a lifetime opportunity to be involved in a historically huge deal..."
Once in a lifetime and historically huge means one of the biggest ever. Bigger than comparable deals. Bigger than any other PGM deal ever done before.
"...that may not be very far from coming to fruition".
Well, that one speaks for itself. Time is running out. Could be days away once the jigsaw is complete.
"Eurasia is in the process of moving from small prospector with a reasonably large find, to owner and developer of a globally significant mind-boggling district of rare metals"
Globally significant is massive. It means "rival Bushveld". Rare means not much left: "last non-consolidated palladium play".
"...that’s importance is vital for the development of tomorrow’s technologies and therefore will only increase in value".
PGM prices are already going through the roof. These things are in demand, because of very recent technological transformations that were not envisaged even a decade ago, and that demand is only going to drive palladium up towards $10,000 by the end of the decade. Heaven knows what will happen to rhodium, iridium and all the REEs. There is no way these price projections are not being factored into negotiations.
"We now control huge deposits, vastly bigger than was announced not so long ago. The company is now a major force in the area rather than the small prospector we used to be".
State support. Enormous deposits. Prices going up. Value increasing daily. Hundreds of billions in value over the medium term.
"The race is on to control such assets by not only companies but countries".
State-supported investors = very, very, very deep pockets. These moves are about geopolitics and grand economic strategy as much as they are corporate decisions. Whoever wins the race for these rare minerals controls technological frontiers and global markets. It's a zero-sum game: you either win or lose, so you keep bidding until you win.
"I believe that when EUA has put all the pieces in place the resulting sale will dwarf the recent deals by which EUA has been benchmarked"
This is the killer line. Just read some of the data about those other deals. To give one example, the Stillwater deal was potentially valued at something like 17 x EUA's current share price, in an era when it wasn't the last non-consolidated palladium play, had far higher extraction costs, and PGM prices were considerably lower (and not yet projected to reach the highs they are projected to reach in due course). If Phil is right, then we could be looking at something far bigger than even a 17-bag from this point, and even "dwarfs" it. It almost seems incomprehensible. You can't quite believe it. But what if
zzzzzzzzzzzzzzzzzzzzzzzzzz
The PGMs are worth nothing if you dig it up with a bucket and spade.We need a big mining company that can pull out 300t a year.
Monchetundra Value Alone
Monchetundra could be worth >$14bn by 2026.
"So we know from previous RNS that West Kytlim is planned for eventual scale up to 2tons a year, probably to show what it is worth to a new owner.
We know there is a ready to go plan for Monchetundra involving SinoSteel for around 4tons (approx 125Koz) a year. Alexei Churakov gave a Kommersant interview in January stating likely EBITDA of $250m from this.
What would happen to share price upon resumption if a similar scale up plan has been devised for Monchetundra to take advantage of the 15Moz resource with flank approval granted?
No point digging out 150kz a year, you’d be there 100 years!
It would make more sense to see them aim higher, maybe a plan for 780Koz so life of mine is around 18-20years. This will take a few years to achieve, but the low cost nature of extraction via open pit will mean new owners can start production by 2021, maybe 2022 at the latest.
Higher potential EBITDA – $1.5bn to $2bn a year means much higher company valuation.
Allow a hefty discount for building the bigger facility, probably around $1bn, you’d still be looking at $4-5bn to ensure you secured the asset that will generate $15-$20bn over less than 20 years.
(This is conservative as well – 15MOz at Pd price each year, less $325/Oz costs)
This may mean some investors need to be a little patient whilst the plans are drawn up. It doesn’t mean Eurasia will be activating the plans, think of it as a feasibility study.
It is very hard not to be optimistic about the future when you work out what this vast resource will yield".
investors are moving into platinum-palladium. Eurasia Mining assets will gain in value in the weeks and months ahead.
https://www.etftrends.com/gold-silver-investing-channel/why-bulls-charging-platinum-palladium/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+etftrends-feed+%28ETF+Trends%29
Swati Verma
May 4 (Reuters) - Palladium soared to a record high on Tuesday on worries over short supplies of the metal used in emissions controlling devices in automobiles, while gold fell 1% after U.S. Treasury Secretary Janet Yellen said interest rates may need to rise.
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Spot palladium rose 0.2% to $2,976.90 per ounce by 1:45 p.m. EDT (1745 GMT), after hitting an all-time high of $3,017.18.
“There are stricter pollution controls globally that we’ve not seen in the past, which means vehicles that were not previously required to use auto-catalysts will now have to, and hence more demand,” said Bart Melek, head of commodity strategies at TD Securities.
“For the foreseeable future, the market will be in physical deficit and prices will go higher,” he added.
Additionally, Ford has become the first US automaker to join the Initiative for Responsible Mining Assurance (Irma), a move which the company says is another step in realising its aspiration to responsibly source all raw materials used within its vehicles globally.
Ford has also committed to nearly double its investment in electric vehicle (EV) and sustainable mobility. That work will increase the company’s reliance on mined material, particularly related to production of EV batteries.
Irma works to advance responsible mining practices, providing third-party verification and certification against comprehensive environmental and social criteria for all mined materials.
The global standard was developed more than a decade ago, in consultation with about 100 stakeholder groups including mining companies, affected communities, nongovernmental organisations, labour groups and purchasing companies using mined materials. Hold on to your golden tickets!!
Carmakers are under pressure to meet stringent carbon emission demands in Europe, Japan and China, as well as customer demand for high-performance electric cars with a luxury or performance feel.
The UK plans to ban the sale of new petrol and diesel cars from 2030.
Luxury car brand Bentley Motors, owned by Germany's Volkswagen, said in November its range will be fully electric by 2030, and last month General Motors said it aimed to have a zero tailpipe emission line-up by 2035. The buyers of Eurasia Mining know they've got the resource in the ground to meet demand.
Power 78 guest, nice read.
If it’s good enough for Phil, it’s good enough for me. Follow the money.
ATB, Pete