RE: Motley fool8 Dec 2020 03:40
https://www.fool.co.uk/investing/2020/12/07/why-is-the-eurasia-mining-share-price-up-over-a-1000-this-year/
The value is in the ground
Eurasia has one operating platinum and gold mine at West Kytlim in Russia’s Ural mountains. There is also the Semenovsky tailings project, which is also in Russia. Here the company owns three million tonnes of sand containing around 1.2 grams per ton of gold and 20 grams per ton of silver. Eurasia claims it can recover 40% of the gold with a simple cyanide leach process.
Finally, and perhaps the jewel in the crown is the Monchetundra project, located on the Kola Peninsula, Russia, which has mainly palladium, but also platinum and gold, and some copper and nickel. In October 2020, the value of the metal in the ground there was been valued at $2bn.
The West Kytlim project will need significant investment to increase production. The other two projects are non-operational, and as such, will require a lot of capital and time to get them going.
Eurasia Mining share price a buy?
At present, the Eurasia Mining share price is around 40p. Assuming a buyer comes in, shareholders will expect the total offer to at least match that. However, bids normally come with a premium attached. A shareholder that has bought in recently will certainly be hoping for a premium to make a profit.
If a takeover does happen, can investors expect a premium offer on the current share price? Well, if the Eurasia Mining’s assets are worth more than its current total market capitalisation of around £1.12bn, then there is a good case for expecting one, should a firm offer actually come in.
Buying Eurasia Mining shares today requires a belief that its assets are worth more than the company is valued at. But bear in mind the value of the metal Eurasia Mining owns will fluctuate with market prices. These values also do not reflect the investment, costs, and time required to extract and sell the metal.
They conclude that - for the above-stated reasons - EUR is NOT a buy!
Seems like the ‘Fool’ anticipates a drop in demand for the rare earth metals that both China and the USA consider to be of strategic national importance?!