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I'm not reading any insane bird's posts because....... well, why would I?
But just wanted to point out that a) EUA is open pit, b) almost the lowest extraction cost anywhere and c) PGM prices have rocketed these past 18 months and are expected to continue rocketing.
And where does it state that EUA can only be sold for what other companies bought for up to x years ago in different parts of the world, in an era without a surge in the PGM deficit and exponential future demand??
Why can't EUA be the "New benchmark" by which other miners reassess the value of their PGM deposits and the markets readjust to the current climate?
Depends - how much are Sibanye asking for it?
To be 100% clear, that is one of SSW's less developed projects. They have a resource base of over 400moz measured and indicated (**not counting inferred** PGMs, so not even counting their massive production and cashflow, according to the ACF report their market cap should be somewhere around $1 trillion.
The ACF report is lunacy, as is any attempt to value MT at anything close to the current EUA mcap, let alone higher.
Riddle me this:
If MT is worth $2.4bn with 200koz 2E proven and probable reserves plus 1.8m 2E measured and indicated resources, and *maybe* 15m oz 2E inferred resources (although they absolutely would not count even as inferred under JORC), with no DFS, in a hostile jurisdiction with very little specialised infrastructure, then what is, to take a random example, Sibayne Stillwater's Akanani exploration project worth?
26.7m oz *4E* PGM indicated, 11.1m oz 4E PGM inferred, at far higher grades than MT, in a well established mining area and jurisdiction? By ACFs numbers in should be worth at a minimum double, and realistically more since far more drilling has been done. Is it worth $5bn? If so, someone had better tell SSW, as that one exploration project would represent fully 40% of their mcap.
TheMadStork is completely crackers. So utterly bonkers in fact that LSE removed him from their website in embarrassment.
LOL
The ACF report is completely crackers. So utterly bonkers in fact that EUA removed it from their website in embarrassment.
Mooching, learn to read. Look at the ACF report, tax and opp cost increase with revenue. But no you would rather pick an I'll informed and losing fight.
Billious
"And to include pt now, shouldn't this be discounted"
Let me get this right, you want a Platinium Exploration Company to........ disregard the Platinimum element from its PGM basket........................................................................Hmm!
"Can you actually just scale up the revenue without the associated costs?"
Name me an industry where costs rise as proportion of increased revenue?
There may be increased capital expenditure yes, but if increasing costs were a concern, you'd put yourself out of business by increasing revenue?
Really?
I mean...REALLY??
Billions, if revenue increases due to PGM being worth more that does not add to the extraction costs.
Of course it costs more to extract 22.6M than 15M. Nice problem to have. So yes the calculation is rough, but the extra cost years down the line is probably immaterial to the above. If you want to knock off a couple of pence because of it, I'd be OK with that.
Billions the clown is back with his 'genuine questions'
That is a great post and workings, GingerHippo.
Out of interest, what would the figures be for MT only if a still-conservative WACC of 20% was applied?
GLA>
Genuine questions. Can you actually just scale up the revenue without the associated costs? And to include pt now, shouldn't this be discounted.
@Ginger - Great post. Given the time it's all taking, bidding war, Rosgeo, whatever Absolute Precision were up to, arrival of Japanese, rising price projections, last non-consolidated play, I'm having a hard time seeing a full company sale for anything less than about double your MT calculation now. Bare minimum of £1.80. Likely to be well beyond £2 IMO.
https://acfequityresearch.com/wp-content/uploads/2020/02/Eurasia-Mining-Plc-MA-Valuation-FINAL-ACF-03022020.pdf
As someone mentioned this morning, the ACF report is based on old data.
"It suggests a total value of more than $2.4bn..........
...........we assume Pd is only 40% of the resource (vs.
geology currently implying flanks Pd is 50% of resource) and we model only the
Pd production and free cash flows, which we discount using a risk adjusted
WACC of 30% for the entirety of the Monchetundra 15Moz asset."
To revise this to include 22.6M oz instead of 15M; to imply 50% Pd instead of 40% (it's actually even more than that), and then to use $3000 for Pd and $1250 for Pt instead of $2295 and $1012
$2.4 Bn x (0.5x3000 + 0.5 x 1250) / (0.4x2295 + 0.6x1012) = $3.3Bn
$ 3.3Bn x 22.6/15 = $5Bn
So MT alone is now worth more than double what it says in the ACF report. I didn't even adjust the WACC. So not 54.8-60.6p, it should be £1.15-£1.27.
This is for MT only.