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With regards to Amur - and to make any comparison to EUA position (which is the only point for discussing Amur here) - it is worth looking at the dates and MCAP.
20-August-2021: Amur produced a feasibility study Permanent Conditions Report (TEO) on the Kun-Manie nickel & copper deposit
: SP = 1.8p : MCAP = £25.2m
25-January-2022: Received (indictive) offer of £100m - NOTE this is pre-conflict
: SP = 3.5p : MCAP= £49m (MCAP is 50% of indictive offer)
9-May-2022: Offer of $105m with $75m being paid over period of 4 years and debt transfer of $30m (starting in 2027, $3m/year for 10 years) : Management was 'delighted'
: SP = 1.3p : MCAP= £18.2m
25-May-2022: Above offer was rejected by shareholders
: SP = 1.135p : MCAP=£18.9m
7-June-2022: TEO study (a level of feasibility study) indicated NPV of $333 at 10% discount.
: SP = 0.9p : MCAP= £12.6m
5-August-2022 - Offer of $35m in single payment was accepted.
: SP = 1.27p : MCAP= £17.8m (MCAP is 50% of agreed offer)
24-May-2023: Declared Dividend Payment = 1.8p (£25.2m)
: SP = 1.8p : MCAP= £25.2m
23-August-2023: SP = 0.125p : MCAP= £1.75m
The above accepted offer was approx 10% of the NPV(at 10%) from the Kun-Manie study report. EUA NKT NPV(at 8.33%) was US$1188 (WAI) & US$1692 (spot prices). So if using 10% of NPV : then NKT would be sold for US$118m (WAI) & US$169m (spot prices).
With respect to MCAP - Amur showed a MCAP of about 1/2 the offer price at most relevant times during the sales process.
A preferred comparison would also take into account the difference in the discounts (10% v 8.33%) which I sugguess would drop the EUA value by say 10% (maybe an accountant can relate the two NPV with different discounts - but it will require various assumptions to when revenue is received).
In addition - a quick review of the Amur feasibility data indicates the Amur asset appears more profitable than NKT based on the numbers in the two reports. I may put some NUMBERS together later on here for anyone who has read both reports.
Statement from Amur (24-May-2023) : ' . . As the funds have been sourced from a non-sanctioned entity in Russia, payment of the dividend has required extraordinary non-typical enhanced governance approaches for implementation of payment . . '
I thought EUA themselves have put EUA-2 at low low priority and therefore if EUA have low visibility about asset sale then I suppose they have lowlowlowlow visibility about any consideration about spending time to discuss EUA-2.
I am also in same thought of mind as EUA BoD with regards EUA-2.
Mr Mac,
I think you correct in what you say, " . . For BRICS it is a very large WIN. . . ", especially for the discounts they now know they can expect and highly likely get whilst buying up any resources.
Mr Bingo,
Understood, however I thought Nyud was included in the part of the Rosgeo resources mentioned in the original RNS resource/resources (see below) - but I may be incorrect:
". . . the reserves and resources breakdown by metals for the Monchetundra Project (Loipishnune and West Nittis deposits), the NKT area, and the projects included in the agreement with Rosgeo . . . ". I don't think I will be able to circle the square or square the circle.
Anyway - enough of trigonometric shapes, on a more transient topic, Luton Town pulled out of the relegation zone during the weekend without even playing a game - so maybe I can allow myself a small level of optimism for winning the league - and not just being very hopeful. Not sure how long the optimism will last.
Very interesting Mr Bobby.
I wonder, probably others do too, what menafn consider as the minimum amount of production to be considered a key player in platinum?
Whatever it is - they consider EUA has achieved that threshold.
I did earlier ask for posters comments on the following - with respect to what was said at the AGM (with regards reserves & resources):
". . . We cannot produce reserves and resources figures for deposits we do not own . . "
- and compared to what their position was in the RNS issued on the 8 Feb 2022.
I still don't think anyone has commented - I would be grateful. As for my understanding, I think they did in the RNS exactly opposite to what they told shareholders they can do at the AGM. I am trying to identify if my understanding is similar to others.
Mr Beast,
No - unfortunately - I did apply. I have read the transcripts which a couple of kind posters posted on here - thankyou all.
Overall - the wording appeared more positive compared to what I thought would go on - especially after last year's AGM.
As mentioned the AGM - in the transcript it says (with regards reserves & resources):
". . . We cannot produce reserves and resources figures for deposits we do not own . . "
Maybe I ask here what posters think about the above statement bearing in mind the RNS issued on the 8 Feb 2022. If anyone could align these up to square the hole - I would be grateful.
Thank you
I mentioned sometime ago that I was VERY HOPEFUL Luton Town will win the premier-league this season.
The first game was a set-back. I was hoping for better this Saturday - and I am now CERTAIN it will be better - as the game is postponed (so cannot lose 4-1 if not playing). I was also hopeful Luton can pull out of the relegation zone without playing a game - but I am not OPTIMISTIC that the other results will accommodate this.
I am still VERY CONFIDENT that Luton Town will not achieve what I am hoping for (to win premier-league) - but it will not stop me from hoping.
On a different subject entirely - it would be very reassuring to hear from EUA BOD that they have any such level of confidence in what they are very hopeful for.
Ceejay,
I was also looking at palladium forecast a few days ago and i noticed the prediction of $1500 in mid 2024 but also an awful lot more predicting lower :
"Palladium is expected to trade at 1216.93 USD/t oz. by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1105.48 in 12 months time."
The above is more typical of what I find over the last week - and the second link below indicates the ongoing lowering of future price predictions. Over the last 2 years - I think palladium is one of the most unpredictable metal from the brokers - as according to data I probably posted here 2 years ago - Pd should now be 3800/oz.
https://tradingeconomics.com/commodity/palladium?embed/forecast#:~:text=Palladium%20is%20expected%20to%20trade,1105.48%20in%2012%20months%20time.
https://www.reuters.com/article/precious-prices-platinum-palladium-idUSKBN2WT10J
From the wording of the Polymetal news report - there are similar similarities with EUA and also indicating a level of concerns for their position due to sanctions:
. . . . an asset sale, for which he said there were a number of interested buyers, the only viable option. . . A spin-off or distribution of the subsidiary to investors are not possible. . . . . the sale of the Russian business remains the only reasonable option. . . .
AND they provided a timeframe -Six to nine months was a realistic timeframe.
I HOPE EUA BOD are reading the information provided from Poly to shareholders - as EUA have never provided any timeframe or indication of timeframe (apart from its been going on ta ta ta ta 2 long) - and shareholders here are mainly relying now on the HOPE expressed from the EUA BOD.
Polymetal activities in Russia alone mounted to over 1000koz of gold production last year - so I can see lots of buyers lined up to purchase revenue generating assets. Be interesting to see any info on the asset sales prices - as I am sure this will be made available one way or another!!
Info taken from:
https://www.polymetalinternational.com/upload/ib/1/23-03-16/2023_03_16_Preliminary_results_FY2022_eng.pdf
Mr Beast and others if attend AGM,
The statement from the AGM . . "ANNUAL REPORT – MUCH TOUGER THIS YEAR – HENCE THE DELAY" . .
Can anyone say if the BOD gave any further explanation as to why it was tough ?
If not - did anyone asked a similar question to the BOD concerning this.
I think all information for your questions are listed in the post.
However - if not clear - MT & NKT are combined - listed together as the maximum production EUA have ever stated (see RNS dated 1 July 2020). FCF is just simply based on % of revenue (% used based on Vale figures).
NKT CPR stated ROI figures based on number of years running at full production - but it did not give any indication of timeline to full production. It also (correctly) never took into account the ASSET PURCHASE PRICE which any prospective buyer will need to make to be able to develop the mines to full production. As the Asset Sale Price is not applicable for EUA in CPR report - as they already own it (or most of it) -- but it is applicable for a buyer - please remember.
So - I presented figures based on what Saudi have invested in for 10% of Vale.
Wardell Armstrong NKT ROI figures are based on EUA developing the mine. ROI figures will increase for the 'creditable party' as they gotta buy the asset in the first place!! And most here wants that sale price to be high as hell.
Thank you Magnum - well spotted - give that man a biscuit.
But the end result is still correct !! 19.4 years !!
As not much to do - and Mr Mac seemed excited with Saudi buying into Vale asset - then applying same ROI to EUA to obtain a Payback-Period v Asset-Sale Price:
From Vale : FCF/Revenue = 5.7/41 = 14% ; Payback period for Saudi investment = Cost/FCF = $2600M/$570M = 4.5 years ROI
Applying same FCF of 14% of revenue to EUA and assume EUA max Production 1000koz (Pd equivalent - generous) @ $1500/oz :
Total Revenue = $1.5B (assume max revenue optimistic 3 years after asset purchase):
Using the FCF/Revenue = 14% : EUA FCF = $1.5B x 14% = $210M
Mine CAPEX NKT = $613M (taken from CPR), CAPEX MT = $176M/0.85 = $207M (taken from Sinosteel contract)
Mine total CAPEX (NKT & MT) = $820M
TOTAL CAPEX = Asset Sale Price + Mine total CAPEX
Assume full production 3 years AFTER asset purchase (optimistic):
Asset Sale Price $0M : Total Capex = $820M : Payback = $820M / $210M = 3.9 years + 3 years = 6.9 years
Asset Sale Price $100M : Total Capex = $920M : Payback = $920M / $210M = 4.4 + 3 years = 7.4 years
Asset Sale Price $250M : Total Capex = $1070M : Payback = $1070M / $210M = 5.1 + 3 years = 8.1 years
Asset Sale Price $500M : Total Capex = $1320M : Payback = $920M / $210M = 6.3 + 3 years = 9.3 years
Asset Sale Price $750M : Total Capex = $1570M : Payback = $1070M / $210M = 7.5 + 3 years = 10.5 years
Asset Sale Price $1000M : Total Capex = $1820M : Payback = $1820M / $210M = 8.7 + 3 years = 11.7 years
Asset Sale Price $2600M : Total Capex = $1820M : Payback = $1820M / $210M = 16.4 + 3 years = 19.4 years
Above is based on Vale ROI data which Saudi are happy with and ignoring any interest rates and other inflationary things. For the very optimistic amongst us - If the Saudi spend same $2.6B money on EUA asset purchase then they have to wait 19 years for return of investment.
Earlier calculations had quicker ROI as metals price was higher (Pd equivalent over $2100/oz). Based on the Saudi acceptable ROI - even if EUA give away the assets it will be nearly 7 years to get money back!! Please comment whilst provide your figures and maybe a little justification if you will. As mentioned - this is based on the Vale buy-in by the Saudi.
https://www.kitco.com/news/2023-02-17/Brazilian-mining-group-Vale-s-EBITDA-and-net-income-down-in-2022-on-lower-iron-ore-prices.html
If have time later today - may look further into the Vale figures and apply same criteria to EUA to show possible payback period for asset purchase based on what Saudi ROI.
Mr Mac,
Looks interesting and good purchase for $2.6B for 10% (EV = $26B).
Vale mining has P/E ratio of about 5 - 6.
Dividend yield of 5 - 7%, Revenue $41B, Free cash flow $5.7B, EBITA $18B
2023 Production - HAPPENING NOW:
- Iron Ore = 310,000,000 tonnes
- Nickle = 160,000 tonnes
- Copper 335,000 tonnes
- Should bring in about $42B again this year
Take 10% of the FCF - then looks like $570,000,000/year to the Saudi Arabian Mining : they get all their money back before Christmas 2027 - all because of the immediate revenue source. This is why operating mines worth buying - reduced risk, reduced or 0 CAPEX, revenue immediately - what more do accountants want??
https://www.kitco.com/news/2023-02-17/Brazilian-mining-group-Vale-s-EBITDA-and-net-income-down-in-2022-on-lower-iron-ore-prices.html
Mr Ragsrob,
. . . "He is Unbelievable a vile individual. . . "
. . .are you referring to the Luton Town goalkeeper (Walton) on loan?
DUFC23 - they weren't really my team - but they are now and for the next 12 months.
Treadingcarefuly and others,
The BOARD are very hopeful of completing a deal before end of this year - because they told shareholders at AGM. The BOARD does not see much visibility in the asset sale/completing the deal - because they told shareholders in recent RNS. This year is critical for EUA - because the BOARD told shareholders at AGM.
Everyone can have various opinions on what the above means - but I am certain the BOARD is very specific in the chosen wording used in both AGM and RNS.
Last week I stated how hopeful I am for Luton Town to win the Premier League - together with my level of confidence of them to achieve this.
Mr DATTABASE1 ,
If you get this message - maybe you can read my post on this thread at 29 July 10.41 - just requesting some info from you if you like to contribute - feel free to.
Mr Chessmaster1234, Your logic I find is reasonable and acceptable and I am sure many companies do sell their assets in a similar way - and I am positive EUA board would have consider such generous proposals a few years ago when the share price was 42p+.
Where I say there's a counterbalance to this - is that the BOARD have stated they are trying to obtain maximum shareholder value - and, if such a generous offer of 1.5x current share price is received, I would say the BOARD would then consider maximum value to be obtained by developing the assets in a timely manner starting with energising the Sinosteel contract for 130koz/year plant. This may mean back-tracking on the departure from Russia policy - but would increase shareholder value above selling the assets at 4.5p share.
Risk would increase - but risk is always high when dealing with Russian assets.
Mr EIE01,
Typical example of unrealistic information in the ACF report - within just 2 years it shows revenue of over $2,500,000,000. It takes time and effort to build mines - and with the help of Harry, Ron and Hermione it can possibly be complete in 2 years.
With the help of the Russian, Chinese and other countries and lots of time and money - it may take slightly longer (maybe 5-8 years to reach such revenue). The majority of the NPV from the ACF report was from these early years of revenue generation - but in reality this was never gonna happen.