Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Tim987,
I have answered this clearly - please review posting history.
Please contribute to the discussion if you can. If your only contribution is asking how many shares people own - then please leave me out - but if it is something concerning EUA and their activities then I be happy to listen and contribute with you.
Seamas12,
I have stated exactly what I like from people on this discussion (if they can) to show a reasoned justification to a negotiating sales price being discussed.
If they cannot - it is easy to say so - or don't even contribute (its not a criminal act to not respond). If people are basing everything on luck - then that is their investment policy.
I have been searching for a positive outcome from a western organisation pulling out of Russia - but so far cannot find. If people here have reason to believe EUA will be different to all others - then I like to know and why.
Boddy Bingo has indicated where there maybe value - in the locality for the assets and also possibility that they are under-estimated in the reserves - this shows some level of reason to value the company higher. Unfortunately - by nature of undeclared resources - it cannot be quantified - but there is a level of logic.
Please note - my (optimistic) price range indicated 5p-8p share price - this is between 60 - 260% increase from existing SP - so if anyone thinks that someone saying this company could be worth over twice the existing sp is degrading the company
value - then maybe they need to revaluate.
This is the discussion which should be had - rather than being very hopeful.
I contemplate the RNS issued on the 6th January 2022 (where COMPANY HINTED that they already knew what sale price was by being able to announcing the dividend policy) kept in shareholders whilst the noise of possible Russian actions was being announced weeks before-hand - there was reports of 100,000 troops on the border in November 2021. I wonder if this RNS was issued for a purpose over-and-above the wording in the RNS.
Mr Bingo,
Its in the CPR - $800,709, 000 (I use $1b as easier to write)
Mr Beast,
You may have overlooked one other point
- Sanctions
If you are not aware - please see link below.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/sanctions-against-russia-8211-a-timeline-69602559
General comment:
Some posters have stated clearly that I got an agenda.
They are 100% dead right. I have also stated clearly my agenda - and I now repeat it below:
"I challenge everyone (if they wish) to come up with a reasoned justification to a negotiating sales price being discussed by Artem & Dmitry"
I have presented reason and evidence for everything presented (some may agree - others may not) - and would like others to show reason on why I am incorrect.
Mr Bingo,
thanks for contributing.
The value I am presenting is based on the precedents set earlier - mainly what has already happened with Amur & Kinross (and Heineken). It is not that the assets have no value, its that the environment they are in has diminished their value.
The Amur Kun-Manie asset sale has a lot of familiarity to some of the assets with EUA (see link below):
Kun-Manie study report (Permanent Conditions Report TEO) identifies possible mine operation for 19 years, with metal production Nickle 86kt/year, copper 23kt/year: giving Revenue of $1342m at full production (based on recent metal prices).
NKT WA study report (Competent Person’s Report CPR) identifies full production for Nickle 26kt/year, copper 12kt/year, Pd 130koz/year, Pt 30koz/year, Ag 3.3koz/year: giving Revenue of $611m at full production (based on recent metal prices)
Both would require CAPEX in the order of $1b in development.
Amur sold Kun-Marie for $35m. !
https://www.lse.co.uk/rns/AMC/kun-manie-teo-submitted-for-review-j7e0hqdxbgqld6m.html
https://www.lse.co.uk/rns/EUA/tier-1-scale-jorc-mre-at-nkt-ex-operating-ni-mine-nv4fejk2l8nq60v.html
At the beginning of the long weekend, I challenged readers to submit their REASONS and to QUANTIFY (if possible) for justification that the company value is worth above (or below) the Net-Asset in the LSE Fundamentals tag (£22.41m) under the circumstances of what has been happening under the Russian Federation.
Jarv55: still expects to get 20 to 30p (submitted before the challenged) - which equates to asset sale price of £560m - £840m with REASON : good relations with the RF and the DFS (but we not seen this yet).
Seamus12: suggests 30p - which equates to asset sale price of £840m - with REASON behind the value: ". . 30p which is 10 times from here. . ", even though the reason stated is 100% correct (3p x 10 = 30p), I suspect this reason would not stand long under forensic scrutiny - however you have all day to add further to your reason Seamus12.
As 30p was mentioned twice - which equates to £840m or $1,050m - so lets see what people can buy in Russia for $1050m:
3.5x Kupol mines ($300m) sold by Kinross : each one producing 481koz/year gold with AISC $637, calculated Revenue $865m, EBITA $558.5, TOTAL Revenue for 3.5 mines = $3,027m, TOTAL EBITA $1954m (production data from 2021 Operations Summary spreadsheet from link below). This is existing mine - so no huge CAPEX required.
30x Amur Kun-Manie mine assets ($35m): Feasibility Study indicates NPV of $333m for 1 mine (see link below), so total NPV $3330m.
Polymetal - soon maybe add Polymetal to this list - current MCAP is about $1000m, and looks like they have already written-off Russian assets from the MCAP. Revenue approx $2890m with 60% in Russia and 40% Kazakstan.
With so many posters on EUA over the last few years - surprised not many more posters ventured to reason & justify EUA are worth more than £22.41m - so only conclusion to be taken - not many here believe EUA are worth more.
Where will the path that EUA are following lead ??
For me - I gave an optimistic price of 270M£ to 450M£ a few weeks ago, however I now reducing this by 50% after reviewing recent transactions in Russia (based on what happen with Amur & Kinross) down to £135m to £225m (SP 5p - 8p). Please note - this is my OPTIMISTIC value range - and my pragmatic value is considerably less and more inline with Amur when they sold Russian assets.
https://www.kinross.com/news-and-investors/financials/default.aspx
https://amurminerals.com/content/wp-content/uploads/20210820-Kun-Manie-TEO.pdf
https://www.lse.co.uk/share-fundamentals.html?shareprice=POLY&share=Polymetal-International
Mr Nuffin,
It is the reason/justification/precedent for a higher price I am challenging others to provide. If nobody on here can present reasons for such valuations - then surely nobody on here thinks EUA is worth much more than the Annual Accounts state they are worth.
I know its the long weekend - so many have other things more interesting - but for the few who have nothing to do but chat on a share discussion (on a weekend with no trading) - then maybe they like such a task.
It is probably the last holiday weekend before the EUA asset sale (as the BOD are VERY HOPEFUL for a sale this year) - lets enjoy it !!
Mr Jarv55,
Back on the 29 July (10.41) I did make reason for negotiations occurring at around £270-450M for all assets.
" . . .I would consider reducing this by 75% now (as optimistic) and 85% (practical) - so, based on my views and numbers - I therefore would expect any discussions (for all assets) are ranging between 270M£ to 450M£ (equating to 10p-16p). . . ".
However - whilst comparing EUA with other mining companies on recent asset sales (see discussion yesterday) - even these valuations are becoming hard to justify.
As the great Jedi Knight Yoda may have said after a few pints, "look around the fate of others you must to see what path for you to follow".
It would be nice to hear from anyone who can reason higher valuations under the current climate.
I challenge everyone (if they wish) to come up with a reasoned justification to a negotiating sales price being discussed by Artem & Dmitry - the highest reasoned sales price shall win a smiley face like what Pompal posted at 11.10 today.
Sorry, Mr Pompal - forgive me, after all that ranting from me I actually forgot to answer your question.
Answer is NO.
Mr Pompal,
your comment " . . . As you believe our assets are worth way less than the current mcap . . "
I have not said they are worthless - I have stated that recent transactions with other companies have indicated Russian companies are being sold for no more than their balance sheet asset value and most considerable less - AND I gave an example of such. If this is not the case then please show me examples to the contra.
Then I then use this as the predicted possible sales price being negotiated. If you think it is higher - then please show your reasoning - if you can.
The second statement you made " . . AND you are no longer invested . . ", to make such a statement you need 2 bits of facts that I am sure you don't have: 1) I had investments in EUA originally, 2) I have now sold. As I know you don't know these two facts - I suggest you are speculating.
StejStej,
For me - personal investment is exactly that - personal. I know a lot of people find this the only factor worth talking about whilst valuing a company - but I rather talk about the company. Please look at my whole posting record - and see if I ever talk about an irrelevant subject such as number of shares being held by anyone apart from Directors and Organisations.
So - answer to your question - I take the fifth !
Finally - before the bed-bugs bite,
I offer to anyone to show reason (not even need to be evidence - just reason) to indicate possible MCAP for EUA worth significantly higher than current value. Please quantify if possible - I have always presented tangible data in all my opinions when presented here. I take all opinions into account and I am happy to change my view on this - Just like Jake Blues once said - YES. YES. JESUS H. TAP-DANCING CHRIST... I HAVE SEEN THE LIGHT.
Mr StejStej,
Please note these are not really calculations:
Heineken sold 300m euro assets for 1 euro
Amur sold their mining assets for $35m (which is about the same as their 2022 balance sheet Net Asset - see link https://www.lse.co.uk/share-fundamentals.html?shareprice=AMC&share=Amur-Minerals
If you look on the EUA Fundamentals tab - EUA 2022 Net Assets = £22.41m. https://www.lse.co.uk/share-fundamentals.html?shareprice=EUA&share=Eurasia-Mining
It appears that buyers of Russian assets held by organisations based in 'unfriendly countries' are getting bargains.
Thanks for your concern for me and Eurasia - and talking about calculations, I originally had this stock speculatively valued at a future MCAP of about £1.8b but only when they progressing their revenue income towards $2b/year (through production expansion in assets - as stated in RNS back in 2020 - 1000koz/year) and from healthy metal prices (Pd over $2000/oz). Unfortunately neither of the two items justifies such a high speculative future value.
Please note - share price does not only take into account asset value - but also future POTENTIAL earnings - geopolitical issues has killed off any speculation for future earnings.
For me - the market is optimistic that EUA will get asset sale income for at least 3x asset value (current MCAP). EUA board have not stated they are optimistic - just hopeful.
7 operational breweries sold for 1 euro. Not bad (if you are buying).
EUA management are VERY HOPEFUL for selling off their Russian assets before end of the year.
Lets also be VERY HOPEFUL that they get more than what Heineken got - as 1 euro does not go far across 2.8 billion shares in a dividend payment.
Amur got $35m - if EUA receive that then it wont even be 1p dividend payment per share across the 2.8 billion shares - so if you holding 1 share you may not even get the penny if exchange rates are not good on the day of payment.
The buyers market in Russia appears to be getting stronger - EUA probably correct to say 2023 is a critical year.
Unfortunately this is the reality for businesses operating inside Russia.
Wonder if they will ever find the black box
It be a privilege.
Mr Summit, when I review the metals - I take into account all the metals listed in any study.
As I made clear - I compared the Kun-Manie asset and the NKT asset as they have the study reports released. I am sure when/if EUA feel obliged to provide such information for other assets I may consider completing similar task. I do apologise on behalf of EUA for not having the MT study report data - and I assume therefore your duh! is really directed to EUA.
If they do not release such data - I start making more assumptions - I can limit these assumptions if only considering Kun-Manie NKT.
Maybe I have misunderstood the NPV to the RF.
Possibly - this value is for the following : taxes (such as value added etc) from procurement activities associated with for CAPEX, Import duties for equipment made in foreign countries, mining taxes, Corporation Tax, Income tax, Export tax etc etc.
If this is the case - then please ignore last posting - however it does appear very sided to the RF.
It reminds me of the olden days when there was 12% tax on bets in betting shops. As the bookies would generally payout 90% of what they get (you can see by normalising all the odds for a particular event) - the government would take an additional 12% for doing nothing, and the bookies would run their business (including paying wages, taxes, corporation tax, pay for shop, purchase blue pens etc) all from the 10%. And please remember - they were very very profitable even in those days.
I would also like to add - in the comparison to Amur - and it is taken from the Amur RNS dated 7th June:
". . . The design parameters maximise revenue generation to the RF based on fully loaded taxation and royalty schemes. The total Net Present Value ("NPV10%") deliverable to the RF is projected to be US$ 628 million. This approach does not optimise the financial return to the project operator which is addressed during the next and final requirement of the DEMP, the mine planning stage. . . ."
and also . .
". . . It has been established that a 19 year open pit operation at an annual rate of 12.4 million ore tonnes should be implemented. Financial results have derived a NPV10) of US$ 333 million and an IRR of 15.6%. A nickel price of US$ 14,468 per tonne (US$ 6.56 per lb) and a copper price of US$ 6,758 per tonne (US$ 3.07 per lb) were used in the RF feasibility study. The results provide the basis for the next phase required as a part of the DEMP where RF approved mine plans and designs are to be compiled. . . "
Therefore the Russian Federation (RF) is the majority beneficiary for this development (US$628) whilst to Amur it is approx 1/3 (US$333). I assume total NPV of the Amur Kun-Manie asset is (628 + 333) US$961m. Please - if I misunderstand anything listed above - let me know - as it needs to be addressed.
So, applying this scenario (if It is correct) to the EUA NKT NPV from CPR : US$1188 (WAI) & US$1692 (spot prices):
35% to EUA / 65% to RF : therefore NKT NPV for EUA = US$415.8 (WAI) & US$592 (spot prices).
Then applying the 10% of NPV for the asset sale (based on Amur sale of Kun-Manie) : NKT sale price = US$41.8m (WAI) & US$59.2m (spot prices).
This would be very concerning -as it is considerable lower than probably the investment made in the drilling etc.
Please note - If correct - this ratio of sales price would then aligned to the revenues expected from the future maximum production of Kun-Manie and NKT (numbers I may post later today or tomorrow).