Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Carrying on an interesting discussion point from Mr. Rickstars, and its a point not recorded in the AGM transcript banded around here (unfortunately) - but a hindsight-ed question to the BOD could be whether they are LEGALLY in a position to raise funds and transfer such them over to Russia.
I suggest if YES - then not too much to worry about for the future of EUA (except shareholder dilution) - If NO then lets all be VERY HOPEFUL the mining product from WK can be sold and the revenues loaned out to other companies within EUA organisation.
Mr Spikey,
You stated, ". . . i don’t believe that the underlying assets are worth anything like the kind of values that have been touted around this board etc. for years. . . ", I know an awful lot of touting has been had in last four years however I will not look at that in this post but I would like to present opinion on the MCAP (share price to many) over the years.
I think the MCAP had a foundation based on the feasibility of the company actually creating future revenues by investing and developing the mines in stages (triggering already negotiated contracts and future contracts) up to the RNS stated production of approx of 1000kozPd/year with an ever increasing metal price. Speculation on asset sale added extra fluctuations in the MCAP - but I do think the share price range between 15p - 21p was very much based on the feasibility of future revenues and the foundation of the value. The spikes above this range I think was based on speculation and I think the knowledgeable would have take these spikes as good time to reduce risk and take profits before re-purchasing at around the foundation price range.
The price today (I think we all agree) can only be based on the probable single reason; few organisations are interested in investing in Russia. For those wanting to invest will also be taking measures to minimise capital investment (even for any interested Russian organisations) and they have the backing of the RF to achieve this. The value and future revenues are probably still there albeit reduced in line with the reduction in metal price and the reduction of off-takers, for those who still consider the investment risk.
Two points (amongst many others) which I am sure any investor of capital is reviewing ; 1) can we develop the asset within CAPEX and timescales under current sanctions, 2) Will future metal prices be favourable with minimise discount demanded by the off-takers.
Icarus69
I assume you talking about the asset sale process, when you stated earlier, ". . . Theres a suggestion that the BoD are confident that they can get this sorted this year . . ".
I also believe that there is a suggestion (by posters on this board) that the EUA BOARD are confident that the sale process will be sorted this year however, I am not one of the people on this board that believes the BOARD are "confident", as I am one of the ones that believe what the BOARD informs shareholders - and they use the words ". . very hopeful. . " in the recent AGM.
As additional information, they have also recently stated in RNS that with regards to the sales process, they have "low visibility' of being in a position to update shareholders of the process.
I am sure if any little bit of the above is in error - others will correct my input.
General comment to attendees of AGM - the statement banding around, "SALE CONFIDENCE – VERY HOPEFUL IT WILL BE COMPLETED THIS YEAR", did the BOARD actually use the words "SALE CONFIDENCE" or has it been added by persons unknow?
Mr Seamus12,
". . that is basically a direct competitor to one of Russia's major exports . .", but also BP was in partnership with Rosneft - they had two directors on the board of Rosneft - how much more friendly can it get. As far as it appears, I cannot see any working relationship between western companies and Russian companies (as the RF rule). I think most will end similar to Johnny Depp and Amber Heard or (for the older ones) Paul McCartney and Heather Mills.
I suspect there aren't gonna be many John Lennon and Yoko Ono moments from all this. I may be totally wrong - but, I say again - the recent past is a good indication for the near future.
Mr Summit,
". . . they could set set off the write down against tax on future income so actually quite useful. . ", very true - but I am sure the shareholders would wish they were never in a position to make the loss to start with - or probably never even put a foot (or a penny) in Russia.
I think the second point - never put a foot in Russia - is echoing around every investment house in the world (outside Russia) - even all BRICS. I expect most future investment in Russia will have to be funded through Russian banks loaning to foreigner organisations. Which company would want to put (their own) money in such a country anymore. This will result in even cheaper oil/gas for the likes of those countries.
One point worth considering for the adventurous - if any SA, Brazil, Indian, Chinese, Kazakhstan companies are buying on the cheap the Russian assets - then there may be value in those companies if you into a quick buck.
Don't think starbucks gave any indication of financial impact - but Russia was less than 1% of their revenue - and as Starbucks business practise probably ensures they not make any profits anyway in any location apart from some offshore account somewhere.
Mr Summit,
One important fact the RF are trying to ensure that happens when western organisations pull out of Russia there's no tangible impact to the Russian people (jobs, access to goods, factories still open etc).
As for the impact - well I won't say anything - let them state as they are in the best position:
BP stated the impact as ". . a result of our decisions we had to take a charge of over $24 billion in our accounts – the largest such financial impact on any company. . . . reducing our reported earnings by c $2 billion a year"
Do we need to look further ?
https://www.bp.com/en/global/corporate/news-and-insights/press-releases/statement-on-media-reports-regarding-bps-exit-from-russia.html
Mr Seamas12,
Thank you - I not aware of this - will look into it later on - but surprised I not noticed something over £1b - I am sure this would have been discussed here.
Mr Summit,
I agree 100%, as I kindly requested, ". . could you provide details of any company that has sold THEIR STAKE in Russia . . "
Mr Summit,
If you "don't expect eua will be sold out of desperation", could you provide details of any company that has sold their stake in Russia that have not been (as the phrase from Life of Brian goes) taken to the cleaners.
I left out one or two others - sorry, but they did ask a question which requires a response.
Mr Stetch101, I am sure you can contribute more to such discussions and with that thought, please can you inform users of this platform how anyone with an opinion suggesting a possible share price increase of up to 260% from existing price is considered negative ??
I have justified reason for every little bit of date presented (you may not agree with it) - and answered all questions (some hostile) presented towards me. It may be your prerogative to disagree, but I am sure you can add value to your position if you back up with any justification. Just asking me to reproduce somewhere else I am not sure presents any further insight to EUA activities and possible future sale of assets. If you wish, please also direct me to any fraudulent posts I have made.
Also nearly missed Mr Icarus69 but I don't think you actually asked me a question - you just discussing and agreeing with Mr Stretch101. If it was a question - could you rephrase if you can still read - as maybe filtered. Thank you
Mr Summit,
Why are my observations pointless, yet YOU have just confirmed that one of them actually happened to Amur :
"In my view amur was given away and dumped in desperation"
How can an observation be pointless - if it has happened - that is what an observation is.
Mr Mizman, you correct - I suppose that's what happens when alarm wakes you up on Monday bank holiday.
It would have been nice to be discussing other viewpoints - however I think the last 48 hours indicate most posters on here (with the exception of Seamus12, Jarv55 & Mr Bingo) do not have any contribution to show EUA are worth more than Net-Asset in the LSE Fundamentals tag (£22.41m) - pity (even I stated think they worth much more than that - but I still have the hounding hyenas after me - but I am sure they all nice soft and cuddly after they've had a big breakfast - just feel sorry for the defensive impala).
Anyway, I think I have answered all questions raised to me over last 2 days.
Mr Jarv55,
When looking at the T&C of the Amur sale - it was apparent the risk of waiting over a 4 year period for payment AND the transfer of $30m debt which would only start happening in 2027 and spread over 10 years was significant risk under existing climate - the company was being "forced" to sell urgently under sanctions - yet the receipt of monies was still totally tied up in Russia (long enough to build the mine and start generating revenues) - therefore there was no tangible benefit to shareholders who could still lose the lot under possible future unforeseen sanctions. So the alternative was to receive 1/3 of the original off.
Please note the MCAP during the whole period: MCAP was £49m when the original indictive offer (pre-war) of $100m was made. MCAP was £18.2m when the formal $105m offer (excluding future loan payment) was made - and Directors were DELIGHTED, this offer rejected (I suggest for reasons I mentioned above and what you stated). MCAP of £12.6m when feasibility study issued (showing NPV of $333m). Final MCAP of £17.8m when the $35m offer was announced. if you put the dates and draw a line - it looks like a reasonable red ski slope with a nice rise at the end to the offer price (to avoid hitting the apre-ski party at the bottom), no draglift or gondola required for that journey if you're starting from the wrong place.
Mr Tim987 - I missed your posting earlier - sorry.
I have stated that the number of shares anyone owns on any stock is of no concern of mine - and I consider vice versa. The only shareholders for any company I have interest in are company directors and investment institutes holdings. You may consider this a negative attitude but I have little interest in knowing what others are holding. I assume more people by far read these various discussions than contribute to them - and I think more viewpoints are required irrespective of individual holdings.
I do understand the shareholding quantity is a major discussion point for many - but not all. I wish you well with your holding - and please ensure it is in tax protection wrapper such as ISA or SIPP - then any profit and dividend is protected from Mr Sunak. If it is held outside of the tax wrapper then you still have the ability to declare any losses to HMRC and off-set against future gains - but lets hope this scenario is not applicable for anyone.
After saying all this however, I do thank you for your interest and sorry that I shall not provide much more info on the subject.
Seamus12 - my thoughts - I think (or I think I think this) that I would rather see EUA take the risk and cease operations and put all Russian activities on hold as far as legal procedures allow and see if they can sit-out the issues in Russia until an accepted working environment exists.
Problem is - very difficult to do unless some end-game/solution is visible - and I think all here understand this is not visible. I am sure if all the directors (at least the ones who are major shareholders) were in their 40's or younger - this would be a possible option. I know it's not gonna happen like that - but its a risk that may suit some.
Difficult - what to do in this position!
Its not everyone's cup of tea - but they can always have coffee.
Guys,
Forgot to include:
MCAP for CMCL = £162m
MCAP for THS = £222m
Offler, Seamus15,
Buying AIM on speculation is all good if you like like risk.
Alternatively - you may consider buying AIM mining companies that are actually paying dividends whilst also expanding their asset base and exploration - still risky but at least having excess revenue.
I would consider the following two as risky AIM mining companies which may still pay you returns of 5 - 8% depending on share price fluctuation.
Caledonia Mining CMCL : Zimbabwe gold mining and exploration company. Annual production expected this year to be 80koz (Revenue £142m, Profit $40m). Future planned invested development expected to take production over 250koz/year over the next 4 years (they stated in interviews 500koz - but I based on 250koz for now). Risk is that Zimbabwe and elections and political stability always an issue. Company paying dividends approx 5% but share price has dropped recently due to lower production and probably political tensions so maybe 6% now(I still need to look further into this). So far all investment (including solar power plant) has been through internal cash flows - whilst still paying dividend. My thoughts - I think they will take on debt to accelerate development on the new Bilboes mine to achieve 208koz/year from Bilboes whilst still paying dividends from the current 80koz/year Blanket mine. I also expect Blanket mine to produce a lot more in the future after further exploration works are complete - they have finished commissioning a new $50m new shaft (all paid for with internal cash flows). Have a look and see what you think.
Tharisa THS: Palladium and Chrome mining in South Africa. I started looking at Tharisa to familiarise with the actual palladium production when it was obvious that Eurasia was set on selling MT asset and Pd was well over $2000/oz (I originally thought EUA could be considered a pension for many if they developed MT a few years back). Existing production from the Tharisa mine is in the order of 180koz PGM and 1.6Mt of chrome (Revenue = $686m EBITA $237m). I understand their chrome production is sold 100% directly to China. I not sure who has the off-take for palladium. Again - share price has dropped recently - production of palladium has had issues but I think mainly following palladium price. They are developing (or outsourcing) solar power farms for a reliable power supply. A good point is that two different metals contribute to the revenues. They also have planned invested development with the new Karo mine providing additional 190koz/year of PGM. Karo CAPEX is about $260m. They doing all this whilst paying 5% dividends.
All risky - but the more research the more can possibly consider mitigated.
Mr Seamus12,
I answered your question - you provided multiple choice - but I answered in the margins and 100% correct.
But after reading through your posts - you also stated ". . and EUA have the relationships needed in Russia to keep all sides happy. . ".
Are you implying Heineken, Amur, Kinross never had such a relationship?
Sorry Mr Mizman, I missed your reply - only just caught it now.
"enact the sino steel contract " - I have for the last few years (before the conflict started) have been wanting this to happen - as (in all NPV calculations) the value is in the future revenues and to achieve this EUA need to build the mines and show evidence it is happening to justify all valuations (even the ACF valuation which showed over $1b of rev within 2 years). If anyone wants to spend money BUYING the asset and then an extra $1b in CAPEX development the asset - they wont see that benefit which EUA could if they developed.
Bearing this in mind - it may be a saviour that EUA did not get into debt - as wasn't it the serving debt that caught Petropavlovsk out and killed them off? And they could not sell gold as they were contracted to sell to a single (sanctioned) entity. Company value $0.
One point I will disagree with, you stated "I take your conjecture purely as a means to discredit the BOD and effect shareholder confidence, just before delivery of the assets sale", I disagree with your whole statement. Firstly your opinion on my conjecture is suggestive which I cannot respond to but I like to stated that I do disagree with your conclusion. Secondly, your statement "just before delivery of the assets sale", please expand - maybe you have more information than us mortal shareholders (including the EUA board - who have clearly stated in RNS that there is low visibility and they have been recorded in AGM as stating they only have HOPE in the asset sale this year). Please expand where your information is coming from. I hope you can, but I am not that confident you will.