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What have the BOD done...... Well,

Taken the company through a major Nickel downturn, achieved 100% mining rights of a Russian strategic asset, navigated the funding difficulties caused by the Crimea conflict, proved up the asset, made a profit on NRR, set us up financially for the foreseeable and are in discussions with at least what potential acquirer who was valuing at significantly more than the market cap.

Any discussions will have been conducted under Non Disclosure Agreements (NDAs).
Not really much can be said if AMC are taking the agreement seriously

We do have a clue though MD, from recollection, the source that broke the news also later identified Vladislav Sviblov as the party AMC were in discussions with

MD,
If we consider that the rumours on the acquirer being Sbilov are true, do you honestly think now is the time to try a put a sale through?
A sale would be huge news and receive a lot of publicity.
From the UK perspective it would highlight a Russian with hundreds of millions that can move money around and has not been affected by sanctions (not good PR)
There is then the various countries that the Russian money would have to move through to get back to us.
Then there is how Russia may react....

There would be too many people / politicians trying to make a name for themselves.

So yes, I do believe that AMC need to keep their head down, keep talking to parties and hope that once peace is established and no additional sanctions are being applied a deal can go through

Personally am absolutely fine with the silence.

The last thing any genuine AMC holder wants is for the company to be shouting about the great asset we have in Russia.

Hopefully discussions are continuing with the party we were made aware of and possibly others we aren't.

Circa 500,000 children died as a result of US led sanctions following the gulf war, the US believed that was a price worth paying.

Circa 100,000 deaths and rising due to US led sanctions in Venezuela and rising because they want their oil and their own puppet as president

Amur Minerals is BVI registered, no tax

As I mentioned a few weeks ago during the C1 cost discussions and why I won’t put any detailed numbers out there is because there are obviously major changes to the PFS of which we have not got a clear enough picture yet. This was clear in the recent cost numbers.

I also mentioned that capex could potentially have moved into the costs, which I now believe has occurred and is one of the reasons that the detailed TEO information has not been released.
(i.e. the noticeable shift in Capex breakdown would let the cat out of the bag prior to an official announcement)

During the interview RY referenced favourable infrastructure implementation in the region and then out of nowhere we have shifted to a Power Line and Dual Lane Road (Single Lane per PFS and no benefit to AMC spending another circa $100m making it Dual).
We don’t have current numbers but these 2 changes could add an extra $380m to capex and as RL points out, the TEO submittal RNS still states circa $1bn.

So, my view is that 1 or both of the below will occur.
A deal is being done to move all or most of the power line out of Capex and into cost, recoverable through the useage charges.
A deal is being done to move all or most of the dual lane road out of capex and into cost, recoverable on a toll type basis.

Am looking forward to RY releasing more numbers

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Hi Lee,

Was just having a run through your numbers, where have you accounted for devaluation of the Ruble and inflation?

From recollection, the PFS used a ruble to dollar rate of 60, it is circa 75 at the present, a shift of circa 20%.
inflation over same period say 10%.

About half the capex and sustaining was priced in Ruble and I don't recall seeing the split of operating cost but this would likely be up around the 75% mark.

If they are not in your numbers, the effect is likely to be dramatic.

Hi Lee,

As I mentioned, I am not working on the detailed numbers any longer as we now have audited and independently produced information both in the PFS and the TEO.

The PFS had a Breakeven at $6 which included the capex and we knew there was upside.
The TEO has been submitted using a revenue value of 6 and the rns advised of the below.
"Upon completion of the translation, a comparative analysis of the results generated by Oreall for the TEO and the independently compiled February 2019 Pre-Feasibility Study ("PFS") will be provided. There are substantial upgrades and modifications to the February 2019 PFS. Many of which are related to metallurgical improvements by the development of a flowsheet allowing for the capture of two concentrate products."

So we have a statement which is very specific as to upgrades, modifications and improvements yet you believe the actual result is an $800m reduction in NPV from the PFS.

As to an example of an acquirer and where Synergies may occur, Russian Copper is a good example, next door, the discoverer is on our board, we have a copper copper concentrate, they'll have their own smelter, there is an old MOU for investigating Synergies.

As for the road, we've seen no cash commitment from AMC towards this which we know is required for the BFS. I think it will outside of our scope and be a toll road built by the Russians.

Last time I checked, the value of the platinum, paladium, rhodium and copper was about $3.5bn, even after recoverability, that's a little bit more than a rounding benefit.

As you say, the follow on comparison will hopefully be informative

No idea why happened at the end of my last post, was trying to say that I'm not going to compare to other projects when the nickel / ev space has changed so significantly in the past 12 months

Hi Lee,

As you know from our previous communications by email, my history is mining, construction and financial forecasting on major projects, there is no misunderstanding on this from my side.

I see no reason to compare or reference this to a western DFS at this point in time when we clearly have a Russian TEO.

AMC is required to be financially viable to be on the Priority Development Projects list (which we are) as well as for approval of the TEO (which has been submitted).

There is no way that multiple revenue rates will be used in a model and the economic viability will exclude capital expenditure.

I'm going to commenting on other projects as the nickel / ev space as soon as obviously changed in the last 12 months.

I would like to press you on what sort of EBITDA / NPV my realistic improvements would be worth to an acquirer.

Afternoon Lee,

The PFS was breakeven at circa $6 and as per yesterday's RNS revenue is being calculated using $6

"Based on Oreall's independent calculation of operating costs, metallurgical recoveries of metals (economically dominated by nickel and copper) into two saleable battery precursor concentrate products, the nickel cutoff grade is calculated to be 0.3% nickel only. Revenue is based on a presently conservative nickel price of US$ 13,300/t (US$ 6.00/lb - US$ 8.40/lb today) and a copper price of US$5,960/t (US$2.70/lb - US$ 3.98/lb today)"

Multiple revenue values would not be used within this document and AMC would not submit something that was not economically viable.

I actually stopped updayed my model shortly after the PFS when information dried up. I have since taken a much broader approach on the value to an acquirer.

Based on the points I made below, how many billion do you think it adds to the NPV using nickel at $10.5?

If we assume that the $6 is economical, therefore breakeven at worst, then the potential benefits are.

- increased nickel price
- increased copper price
- by products that will be paid for
- underground opportunity
- deposit limits have not been reached
- surrounding potential deposits (previously sampled)
- throughput capacity increased for 6 to 10 mtpa

For an acquirer there is also the following benefits
- utilising capacity of own smelter
- non payable by products (I. E. Rhodium)
- discount factor reduction
- people / plant / supply and sale chain synergies

Then come the soft factors
- government support for infrastructure
- first mover in far east, barriers to entry within resource rich location
- unencumbered licence holding company

My view is Kun Manie is not AMCs to develop, we are simply setting it up for a major and so it is less about NPV should AMC take it forward and more about the NPV for them

I don't think any complex requirements are needed by us at the moment.

AMC have submitted the TEO which is economical at a nickel price of $6 per lb.

This has been prepared, audited and now with Russian authorities.
Absolutely no reason to question it, although we know that there are opportunities for improvement.

Yup, a deposit 5km deep in the Pacific isn't really comparable, especially when considering the below.

https://www.mining.com/bmw-volvo-google-and-samsung-call-for-ban-on-deep-sea-mining/

The table provides interesting information.

AMC is only missing because 2018 drill results have not been included.

With 2018 drill results and viewed in conjunction with deposit type (sulphide), grade and hiw advanced the deposit is, id say we are number 1.

Was supposed to be a smiley face, not question marks