The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
A few things are coming into focus now as the facts are revealed in the RNSs.
The Russian govt obviously want to get the Kola area up and running with PGM in demand worldwide.
Current incumbent Nornickel has a bad reputation for ESG. Even so much that there was a Telsa shareholder outcry at the rumours of Telsa doing a tie-in with NN.
IMO Rosgeo/Nornickel i.e. the Russian Government are using EUA as a 'clean' company without ESG issues to be the front of a push to get the resources sold to a big global player.
What I think we'll see is the MT+flanks assets pushed together with Nyud and other JV assets into a new JV and 'operated' by EUA (new CEO already in place), using NN infrastruture in Kola.
There would be an upfront cash injection from the 'credible party' to the JV which would be paid out as a dividend to EUA. EUA would get a very minimal operating fee each year for the management of the JV, and NN would get paid for their 'on the ground' services and infrastruture (processing plants). Rosgeo will get their Earn-out over the life of the project.
All in all a very tidy piece of work by the BOD.
Still not heard from Nornickel on the Board Meeting today (unless I missed it).
The longer the day goes on the more chance that whatever the "transaction" is that they are approving will be released in an out of hours RNS.
Given the volume today, i'd say there is a chance it could be EUA-related. What else could be causing the SP move?
I saw earlier on Twitter an agenda for a NN board meeting today, which included an agenda item of "Approve company transactions". Can't find the tweet again now, but possibly the reason for this flutter in the sp?
Aubery:
Not as easy as you think as the ii won't be messing around with small amounts of $. So for any meaningful purchase they would have to go through a private placement with the BOD agreeing to issue new shares. The company doesn't need cash at this moment in time so won't want the dilution.
There is also the factor of optics around insider information. If the ii were to go out now and hoover up a load of shares on the open market, what does that say about their dealings with the BOD on the private placement? They would be opening themselves and the BOD up to investigation for insider trading.
Plus the ii still has warrants at 26.5p so if the share price spikes above this they have that floor price to buy anyone $20m. i..e there is only so much profit they can miss from this point.
TMS: how do you explain the ii that put up $20m at market value when the shares were 26p? They will have had some specialist analysts researching this from top to bottom with the aid of the BOD guiding them through the data (and potentially dropping some hints behind closed doors).
I like this little line from the AGM questions "why do EUA need the option of raising more cash"?
- in case the Rosgeo Joint Venture development this year results in proving a resource higher than already released (104.6Moz Pt eq)
This says to me that there are further updates to come on some of the JV sites, maybe Nyud as they tweeted a picture of the Nyud site saying "recent drilling completed by Rosgeo".
This could have been a hint to what the next update will be.
Not sure whether any update to the 104.6Moz would move the share price! But it would be nice.
"making progress on the strategic options that we have on the table".
Read between the lines, the deals are coming they are just taking time, but they are progressing.
Options IMO are:
- Sale of MT (interim CEO remember)
- JV on Nyud assets
- Japanese JV on other JV assets
From Dec 2019 RNS:
"there are potential resources within the existing Company licence and the flanks application of c.15M oz. This includes Eurasia's current state approved reserves and resources of c.1.9million ounces (see the Company's Resource Statement, announced 15 June 2017) and c.13Moz detailed in the Russian Cadastre; "
From website update today MT highlights page:
"15Moz resource in MT license & Flanks license"
Subtle change of wording from 15Moz "potential resources" to "resource".
Maybe reading too much into the website updates....or maybe further resource update JORC to come soon?
I think the OP's point was a good one:
- SP currently reflecting risk around MT sale dividend. 20p v 70p (estimate) and pretty much ZERO value on any other assets inc JV.
- IF the dividend happens there will be a DOUBLE benefit to shareholders. Firstly, the dividend will be due, but also - significantly - the market will have to reprice the rest of the assets including the JVs. This itself should add a lot of value.
- Personally that's why I hope it is a sale of MT+1 of the JV subsidiaries, so that this will demonstrate the value in the JVs of which there will be 8 remaining.
I think that if/when the MT sale + dividend happens it will legitimise the company to a much higher level in the eyes of MM/II. So agree with you that the JV asset potential will get a re-rate. Currently it is being valued at zero because the sp is lower than when the JV was announced.
I'd take a 50-70p dividend, leaving c20p value. Hopefully that is a low estimate!
30,000 voted against, please add to tally
(every little helps!)