Member Info for Alta_Traako

GMF. Yes your work is very shoddy and should be ignored. You used appropriate valuation techniques and explained your methodology clearly and that is just unacceptable. You should re draft the report to include some of the contributions of Earache, JEsx, other angry/ bitter posters into your model. You can do this using the following formula:

GMF contribution * Earache contribution [to the power of N shorters and derampers]

= GMF contribution * 1 [to the power of N shorters and derampers]

=GMF contribution.

Thanks for the report and sharing it with others.

May the PowerOf78 guide you.

Alta.

Then I let it go again

Once I caught a fish alive

Jobbytouch I am screaming laughing at your name. Best I've seen on LSE by far. Brilliant. Reminds me of my old Xbox username. 100 free shares to you!

GLA

I think they would be proud. After all, despite Adam actively trying to destroy the company and have people lose money, I am still willing to point him in the right direction to ease that epic burn he has. Pure kindness on my part really.

Take care shipmates! Til the next RNS.

GLA

Some useful links for Adam:

https://www.gov.uk/jobseekers-allowance

https://www.homeless.org.uk/

Delighted that I'm accidentally loaded because i didn't short EUA.

A potential buyer that is part of the FSP signed NDAs and cannot buy shares on the open market. Anyone who is not part of the takeover code could accumulate up to 1% before having to declare it and therefore SP would skyrocket making it too expensive to continue buying on the open market. If they did keep buying as the SP rises then the SP would continue to rise until the company buying the shares on the open market stopped buying as "well if they are still buying then it must be undervalued". Wouldn't do a serious bidder any good and imagine anyone who is serious has signed the NDAs so that they can access the data room before committing cash.

I would suggest that at most an interested party who knows they can't afford to buy might accumulate up to 0.99% to maybe make a profit from a sale, but EUA being sold "through the back door" would be blatantly obvious and be reflected in the SP. Not saying it's impossible but we would know.

Definition of forms for anyone that hasn't looked and is still unsure about what they mean:
https://www.thetakeoverpanel.org.uk/disclosure/disclosure-forms

That is really interesting but also makes sense since the numbers used are the same. Just adds confidence and support to how much we are undervalued when different methods align!

Agreed £1 it is!

Brookers,

Fantastic, I am delighted with that. Really appreciate you posting that! 15-20% sounds reasonable and the projected cash flow from the report makes sense since that's the data we have been given.

For transparency for my method. I ran trajectory models based on previous data from the Kvista, NAP and SW sales since Alexei said to benchmark with previous deals. Wasn't sure which one he meant so just collected all the data from them all, put them into one big dataset and ran the trajectory models in Mplus controlling for any missing data and metal prices across time (had my PhD supervisor make sure it was modelled correctly). Used absolute worst worst case and best case for both and got $3,375, 000,000 - $5,225,000,000. That's 75p - 115p for MT alone. Figured WK would have that at at least 80-120p (so I invested last year).

Appreciate you sharing. Logged in the calculation bank for future. And yes not ashamed to admit that I love a spreadsheet.

Cheers!
Alta.

James thank you for your contribution.

Thanks Brookers,

Agreed with your method. Just pointing out that it is not 30% flank value being presented in the ACF report for RMR.

I have a hard time with NPV since the mine is still undeveloped and not generating cash flow and I am unsure which numbers the BOD would use. The two times I tried it I got 125p and 144p. Assume I have made a mistake since the values were so different hence I always maintained 80-120p value (assumed my 144p was a mistake).

Any light shed on how you would calculate your 149p would be great if you have time. Always looking to learn from someone who knows how to apply it properly.

Cheers
Alta.

RMR, I previously posted this a while back to help Rowka. Hope this helps clear it up for you too.

The report valued MT with flanks and assigned 30% risk adjusted WACC. This doesn't mean they only valued 30% of the flanks, it means they valued the whole thing and discounted 30% for risk. In other words they presented 70% of the value.

So taking the reports 54.8p-60.6p range and adding the 30% back on (54.8/0.7 to 60.6/0.7)

That gives a value of 78.28p - 86.57p when the 30% risk adjusted WACC is removed once we receive flanks.

So that report essentially maxes out at 86.57p but that is before the Tipil licence, the additional 4Moz at MT, what ever is going on at Volche, any potential increased resources, and still assumes the 40% rather than 50% pd content.

Good luck.

Alta

The report included all of the projects including WK in the final valuation seen below:

NPV Monchetundra Lo + WN (£m) 192
NPV Monchetundra Flanks (£m) 1,476
NPV West Kytlim (£m) 33
NPV Semensovsky (£m) 12
NPV FCF (£m) 1,712
Net Debt/(Cash) 0
Fair Value (£m) 1,712
NoSh (m) 2,694
NoSh (diluted) (m) 2,967
Intrinsic Value Per Share GBp 57.71
Close Price GBp 3.45
VR (low - high) 54.82 - 60.59

"In the above scratch valuation approach (which is different to our DCF Sum of
the parts (SoTP) approach), 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.

In our SoTP DCF we assign the 30% risk adjusted WACC to the Monchetundra
flanks project only (no licence and no EPC yet in place). We also assume there
is nil production until 2023 vs. managements forecast of production starting in
2021. In the SoTP DCF our Monchetundra Lo + WN risk adjusted WACC is 12%
and our West Kytlim risk adjusted WACC is 10% both of which are reasonably
conservative to arrive at a Eurasia valuation of ~£1.7bn."

The report was ridiculously conservative which was good to see. Think this will see a significant update given the progress at WK, expected update at MT, assuming only 40% of MT was pd rather than 50%, and potential VT applications. Take off the 30% risk from receiving flanks and you get 78-86p already before and upgrades.

We really are in such a strong position here.

Link to report: https://acfequityresearch.com/wp-content/uploads/2020/02/Eurasia-Mining-Plc-MA-Valuation-FINAL-ACF-03022020.pdf

Great post as always Ian! Not long to go now!

Were flanks rushed?
I don’t think the RNS was rushed but I think it was halved. They likely had a draft ready to release and decided to release the part confirming we have the flanks. The other half of the news IMO is updated resources at MT. Holding off on the rest of the RNS with the updated resources to release closer to AGM.

Did they release it early because PI’s found it?
Potentially. Don’t think we will ever know but it is not PI fault if it is in the public domain. I would speculate they would have preferred to have released it after the placing shares were admitted but I don’t think it makes a difference as we knew the flanks were nailed on anyway. They know the juicy resource update will be the exciting surprise RNS.

Will we get a bid RNS before AGM?
Again, potentially, but I doubt it. I think we will get the updated resources at MT RNS before it to drive up SP leading into AGM. At that point at the new higher SP I think we will get a bid RNS.

Partial or full sale?
I think if the price is very generous it will be a full sale but the fact that we have the cash to develop WK means we are ready to keep it on and sell MT.
Scenario 1:
Sell the lot. We all get loads of cash.
Scenario 2:
Sell MT. We all get loads of cash. Company keeps what they think they will need to progress WK generating more income and hope they get their hands on VT to develop and rinse and repeat MT.
Scenario 3:
JV / conglomerate. We get loads of cash and EUA hold a small % ownership for ongoing payments. Keeping a stake in the entire region. Good chat on here last night from Pulp and Rowka re JV.
Scenario 4:
No sale. We go it alone.

Which scenario is best?
Everybody has a different situation and age plays a factor. For example, all that grandads likely want a full sale to take the cash and hobble off into the sunset. Some would prefer a nice big payment now and keep a stake for further payments down the road. Some want to take the risk of going it alone.

Which is most likely?
I think it is 50/50 on scenario 1 and 2 . I think scenario 4 has become very unlikely over the past few RNS’s.

My preference?
Going it alone is the worst for me as I want some sort of payment immediately. We have proposed the 1000Koz plan but that's a big boy plan that we won’t have the funds for. We would have to go back to the original Sinosteel plan and build from there. For me scenario 2 & 3 are most attractive. Scenario 2 we get a beast of a payment from MT that everyone would likely be pleased with since MT alone is worth several $billion and as a bonus we get the possibility of another massive payment if we repeat MT at VT (WK dividends along the way, potentially). Scenario 3 would be a similar payment for the whole company, but we retain ‘X%’ ongoing exposure to the entire area (MT+VT later) as it gets developed.

Only my views based on recent RNSs, discussions and preferences. Think next 4 weeks will be massive.

Alta.

John, of course there haven't been rumours of a buyer. NDAs are in place. As Mikey notes, now flanks are approved we are now in a position to receive bids as per the BOD strategy. Given you state 10-15p while we are sitting at 23.5p waiting on shares to be admitted and bids to be announced, your statement is mute. Fact is BOD set out a strategy and have executed it to the letter so far.

John, now that flanks are approved your 15p best case values palladium at 1p per million ounces. Now I'm no expert but i have a sneaky suspicion that a million oz of pd is worth more than a penny per share lol. The market is a strange beast at times but its not completely thick.

She was bombarded with calls after that last lot of forms by people asking what the forms mean. She politely said that she could not answer any questions due to NDA. Then she was never answered the phone again which is completely understandable given all details we need to know are provided by the takeover panel here: https://www.thetakeoverpanel.org.uk/disclosure/disclosure-forms