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Agree Shed but no matter how we water down the numbers they are still great and yes Bricks, a great find.
SwearinNige I think we're a tad short on cash to go it alone :) The only way would be with a partner, though it's never been a secret that the board favour a complete disposal. These are however unprecedented times and that Brickz find is the first time I have seen an estimate that 200 jobs being created - plus as ever, an operation on this scale has a further knock-on effect to the local economy. These dreadful events have been a short term blow to EUZ but could also have created unique circumstances which could actually be a company maker. The local jurisdiction will want Toral built more than ever so could we benefit from direct government investment? Could it be nationalised? Local politicians will know it could take a multi-national years to get round to building a mine, yes there would be clauses about that in any licensing contract but I would guess you'd likely be looking at a minimum of two years leeway. How much more of a nimble solution to finance EUZ to crack on with it, fanciful thoughts in normal circumstances but these aren't normal circumstances.
If we do go it alone then dividends will be paid. I did some calculations this morning and told myself they were wrong, so I did them again and again and the amount we could potentially see being returned. I am not saying my calculations are perfect as I have had to make assumptions due to lack of facts.
$3 400 000 000 current metals plus $600 000 000 copper = $4b
$4b - capex and opex over 20 years = $1.5b (Assumption) = $2.5b or c £2b
That equates to around 12p per share drip fed to us over the years ahead which for a lot here is retirement. Even if you think the capex and opex figures are too low adjust them and the returns are still great. Even if you go as low as 5p the reuturns are still 1st class. I will leave you to work out in SA Rand BricksSA! Bricks PANR, I have a small holding, but the risk is still there, albeit less.
If LR pulls this off then his comments about shareholder value will sit well with everyone associated with EUZ. One little thing to remember is the warrants outstanding so assume they are exercised and 20b shares in issue, and it is still a great amount of cash.
You have a very good point Sheds. Maybe they did grossly underestimate the value when they initially sold it off with the 3 "payback" clauses. This is the only logical explanation I can see.... I agree...for the paltry sum of $45 m one can have a mine in Production....You think we could go it alone with some forward selling of silver ? This would be far better than any sale imo....then we talking big money over the longer term.. GLA DYOR,
The Lundin relationship is intriguing as when FCR (later EUZ for anyone lucky enough to be new :)) took on Toral they paid very little for it. However Lundin did stipulate they would require payments on construction of a mine, first production and a small smelter royalty. Seems they were either confident that their payday would come when FCR/EUZ eventually sold the asset or did they think the one-off payments amounting to US$7.5 would guard against another player coming in? LR stated recently when facing down questions that Lundin could get in by the back door that they aren't even talking to Lundin. I'm starting to wonder if Lundin massively underestimated Toral, they certainly did with the silver, not to mention the copper and we know for certain that LR, Luis R and JM have just produced the best cores discovered by anyone who has been over this hill. The low capex nature of Toral makes US$7.5 a pinprick in getting a world-class mine operating and the smelter royalty might be a slight irritation to a new operator but could it be that EUZ's best path to success for shareholders is without Lundin?
It is rather strange under a Lundin URL....anyone got any ideas ? Also the Board....which board ? would appreciate and value any comments...@ Oils....have a look at PANR and let me know your thoughts.
Bricks, u r a shinning light buddy. Thanks.
Thanks, Bricks.
T
Good research Bricks, thanks for sharing.
Torham
Im still trying to work it out.....also the last sentence...authorization by board....which board ?....You know we have always surmissed who the "silent hand" is and maybe this is just becoming a lot simpler to understand. However I have now asked LR in an email if Lundin has got access to OUR data room. I am awaiting his response and will share. GLA.DYOR
Brilliant find bricks. I notice Lundin Mining in the web address link. Is this significant ?
Found this and translated it....."DIARIO DE LEÓN - FINANCIAL INFORMATION
Posted on 03/01/2020
EUROPA METALS has already invested more than 6 million in the preparations to extract lead, zinc and silver in El Bierzo. The industrial initiative is already well advanced and as soon as it has the exploitation permits, it will activate the mechanisms for the start of work. There will be several hundred newly created jobs (about 200). Currently, as regards the administrative part, they are in the process of moving from the research permit (which they have been developing for years), to obtaining the exploitation concession to remove the mineral. This complex procedure is awaiting the authorization of the Board." Source : https://empresite.eleconomista.es/LUNDIN-MINING-EXPLORATION.html
Sure Brikz, it would seem the neatest transition as they already have an interest in the mine being built and a small smelter royalty in the event of production.
@Sheds...try and do some more research on Lundin if you get time....all my research points to Lundin being in the mix. From the latest video...The copper will be mined by the developer......Lundin right now are looking for primarily a copper mine with Zync and Lead as secondary in their eyes at the moment....thats my take on it .....who knows....and we definitely have all 3....GLA.DYOR
I could only guess what a discount for not delivering a PFS might be. Suppose it depends on our relationship with the buyer, if has always been hoped we've always worked closely with potential buyers hopefully it won't be used as a pernicious bargaining weapon. Similarly the fantastic results from TD025 aren't in the JORC, will we get value for that? Good news that non-essential workers return from lockdown next week in Spain.
Those are the figures I came up with several months ago so the exchange rate has changed slightly in our favour, cjen the 5% figure was a rough figure found online for average sale price of a mine based on in ground value. I think this is a conservative figure. We still have a few hurdles before a possible sale but this gives us an idea of the asset value. Also as stated by Sheds I think there will be a large discount for the (hopefully) new owner to carry out a PFS. How much of a discount is anyone's guess. Fingers crossed for future of EUZ. GLA
Craig, why only 5% ?
Your figures look great Craigy. I think the USD / GBP exchange rate has moved since they were put together though and that's to our advantage.
Thanks Craigy...your figures look spot on :-$
How heavily discounted are you talking Shed?
Thanks again
* (also as for last time I messaged I decided against getting everyone onboard not sure how much patience they'd have)*
The below was based on rough 5 year average prices of zinc, lead and silver as follows;
Potential Sale Value
Zinc (tonnes) = 830,000
Zinc price per tonne = $2500
830000 X 2500 = $2,075,000,000
Lead (tonnes) = 570,000
Lead price per tonne = $2000
570000 X 2000 = $1,140,000,000
Silver (ounces) = 14,000,000
Silver price per oz = $17
14,000,000 X 17 = $238,000,000
Zinc, Lead & Silver in ground value combined = $3,453,000,000
5% (I think this is reasonable for a guesstimate) of $3,453,000,00 would give us a value of $172,650,000
Converted to GBP would be £133,972,221
133,972,221 divided by 16,720,000,0000 (number of shares in issue) would give us a share price of £0.008012
I.e. 0.80 pence per share.
The 5% figure I have used is from researching online and this seems to be the rough figure used on in ground value for a sale price of a mine but this can obviously differ so if we were to use a 4% figure with the same values as above we would get 0.64 pps. Using 3% would give us 0.48 pps
I know this an ideal scenario to get 0.8 pps this but i think it helps to show the true value of this asset. These are only my calculations and I’m certainly no expert.
Extremely under valued imho, If you look at the risk/reward then this is a great opportunity I believe. If I’m wrong on any of the above let me know. Gla dyor
I posted my calculations on possible sale value, I'll dig them out again.
Looks like we're all sick of gardening, sorry except Brickz who is marooned somewhere. One extra thought, this 3rd phase mets is apparently all about spatial representivity. I think that's about further proving the core you have pulled out will be as representative as possible of what you find when you actually start mining, de-risking the chance of the mine under-performing. I'm wondering if the stunning cores at TD-025 prompted this and they think they can model that more widely across the entire resource.
It's my opinion , and only my opinion based on the values of metals in the ground at circa $3 Billion and working on a sale value of 7.5% of that, so $225 million ( £190 MILLION ).
Trade don't forget that although the silver is eye-catching, in terms of total value it's the lowest earner compared to the lead and zinc, albeit we don't know if the copper is economic yet. Thinking about it didn't LR say something like 'the operator will be mining copper' in the last interview so maybe they already know it is. I'm a bit more optimistic than Brickz on value but we need to tick some more met boxes yet. If we knew the copper was a factor it could be immense - copper is going to be huge with countries trying to hit their carbon targets, as I can see direct government investment into huge wind power projects being fastracked. Also it's often forgotten the significance of this being very low capex, Toral is in exactly the right place.