Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Oh dear Frankey...
Let’s have some fun though seeing as you’ve brought it up. Perhaps you could share the date and time of this ‘post’ with the rest of the group?
It sounds like the kind of mid post statement I might make when mocking those who pretend to be fearful about the future for EUA.
As someone who has predicted since early November that 78p was achievable for EUA, you’ve really made me chuckle with this one.
Spikey, Frankey and TDT took a trip to the seaside today, heading to see Lancashire Lad at Blackpool. There are rumours of buying EUA shares in a private deal, but it turned out between them they had none.
All was peaceful here, as it seems they forgot their phones.
“But who is going to post the nonsense on the board they proclaimed, our boss will not be amused.”
“We’ve tried using Dropbox, but screenshots are tricky to do. We hoped it would delist, but the new nomad is now in the groove. We’ve looked at the warrants, the options as well. None of the holders are biting, what on earth can we do?”
So they turned around and headed home, without any ideas on how to sow doubt.
The battle is long, their time is running out. The next RNS will prove they simply don’t have a clue.
Agree with mac on this - 2 assets minimise the risk greatly. No need to worry about getting into production when they are already operational at West Kytlim - current plans for 1 ton PGM a year by 2021/22 would justify around 12p share price alone on NPV basis. (Add in 34p for 1.9Moz at Monchetundra)
However I analysed this company I found it undervalued, that is why I started buying heavily. It was an absolute bargain last October and still severely so imo. Will be buying more when trading resumes.
Ethio/Dark
Or perhaps Dmitry genuinely didn’t want to dilute the shareholding further. Not as unlikely as you make it out to be.
After all, precedent was set when it was specifically mentioned in the RNS last November Regarding appointment of Alexander Suschev ...”This will help avoid the dilution of the shareholders and will allow the right success oriented motivation of Alexander”
So he is fully focused on the deals ahead, has the confidence of previous success behinds him and knows what he needs on the team to make Eurasia a success too.
Instead of endless questioning of minor elements of the story, why not spend some time looking at the future and working out fair value on the assets. Do some calculations of your own for a sale of MT and/or WK and we’d love to discuss them
As entertaining as it is seeing the bot flies neutralised, thoughts should be more to the positive, ie the next RNS and events ahead.
I’ve got a few contenders I’d like to see, in no particular order :
1. Fuller Explanation of reasons for suspension, CITIC engagement letter signed off and a date for trading to resume (could be amazing - ie bidding process starting)
2. Licence approval at WK - Tipil (seems to be done deal )
3. Flanks approval at MT (the game changer for reserves)
I don’t think we will see more board appointments, but always open for a pleasant surprise. Some of the theories I’ve seen and heard :
a) 2 stage bidding round with 8-9 firms interested
b) special situation funds x2 taking a min 3% stake and TR1 announcements soon after relisting
c) PGM hedge funds interested in purchasing a stake
d) other banks trying to outdo CITIC and VTB to get involved as not so many M&A deals this year
What else have you guys heard or wish to see happen?!
Taken from my research report :
Based on existing Sinosteel EPCF – mining 125Koz by 2022 for 18 years. Generates free cash flow of $3bn over 18 years, Net Present Value (NPV) $1.6bn
Using 2.9bn shares (allowing for warrants/options) and 80% ownership of the asset this gives a current fair Share Price for MT asset - 34 pence
(prior to flank approval & Assumed WACC 7% as little evidence to support smaller number, tax rate 20%)
Note – this valuation does not include the 13.1Moz pending approval. Once flanks approved, they would have sufficient reserves to operate for over 100 years at 125Koz per year. Clearly they need to build a bigger mine to extract the true value at Monchetundra. That is when the larger numbers start to emerge.
But on current plans alone, this is worth a lot more than the 7p at time of suspension.
More likely waiting for the dust to settle after latest faux pas.
When you see negatives rebutted with an answer that adds value they are actually helping people stay positive. Been an ongoing battle since October and still not seen one line of inquiry that makes me think they have a point.
Plus the bot flies never attack a poor share, EUA has a very bright future.
as ever, the RNS released provide the information needed to understand what is happening :
Eurasia Mining, the palladium, platinum, rhodium, iridium and gold producing company, operating the established West Kytlim Mine in the Urals, and also the operator of the Monchetundra Project comprising two predominately palladium open pit deposits near the town of Monchegorsk on the Kola Peninsula, is pleased to announce receipt of notification from both Sanderson Capital Partners ('Sanderson') and Optiva Securities ('Optiva'), to exercise 22,017,871 warrants (ordinary shares of 0.1 pence) in the share capital of the Company ("the Warrant Shares"). The consideration for the exercise of the Warrant Shares amounts, in aggregate, to a cash value of £225,001. The warrants represent the total amount of warrants held by Sanderson (20,000,000 warrants at 1.0p) and Optiva (2,017,871 warrants at 1.24p).
In addition, the Company announces it has received a notice to exercise 9,000,000 options (ordinary shares of 0.1 pence) in the share capital of the Company, being 8,000,000 options at an exercise price of 0.90 pence per share, and 1,000,000 options at an exercise price of 0.42 pence per share, (in aggregate, the "Option Shares"). The consideration for the exercise of the Option Shares amounts to a cash value of £76,200. These options were exercised by employees of the Company, not holding positions as directors of the Company or as senior management or as advisors to the board.
As mentioned in RNS on 11 Feb 2020, trading in the Company's shares is currently suspended. Application will be made for the Warrant Shares and Option Shares to be admitted to trading on AIM('Admission') as and when trading in the Company's shares resumes. These shares will rank pari passu with the ordinary shares of the Company in issue.
So in summary - Eurasia can receive notice of warrants and options but they have to wait until trading resumes.
As said before - employees wouldn't have spent their own money on their options if they didn't believe in the firm they worked for.
Just a thought for the weekend, if someone has been shown to doctor images of the Eurasia website and share them on this board via Dropbox, we cannot trust any other images shared from Dropbox from that user - Ficticious holdings and the like.
A plea to the uninvested, come up with coherent arguments we can debate, don't muddy the water with falsehoods.
Total demand for Palladium in 2019 was 11.5Moz
Production - 7Moz
Recycling - 3.4Moz
Deficit 1.1Moz in 2019 - several sources indicating this kind of level
When you look at the updates from Norilsk, Amplats, Sibanye, Implats, Vale, Northam and ARM in Q1/2, all relating to reductions in production and shutdowns, reasonable estimate is 700Koz lost production and counting.
Production 2020 Est - 6.3Moz
Recycling of old cars - less activity on this front due to lockdowns, so estimates around 3Moz max for 2020
So you have a 1Moz shortfall in production already for 2020 that won't be clawed back.
So unless overall demand for 2020 falls by 2.6Moz or 22% of 2019, there will still be a structural deficit and Palladium pricing will remain at current or higher levels.
This is to assume all mines operate at 100% for Q2,Q3 and Q4, expect further reductions in other words.
China saw strong demand for new and used cars in April/May as consumers switched from public transport. Increased loadings expected in 2021 for China and India - the deficit will not be reducing. The price will stay 'high'
For frequently brightening up our day I send you best wishes for your birthday, hope Lil has sorted out some tasty rations from her lobster pot...
I only have the one account here, but if I had multiple I'd send a happy birthday from each. must be a nightmare remembering to log in as the 'right' person. imagine making a mistake and revealing you had multiple id's :-)
Indeed. End of day it’s the share price that dictates the outcome for all.
Getting banned here becomes a badge of honour perhaps, whilst the sites reputation suffers with L2 outages and delays reporting blocks of trades too. Other formats are far more advanced in terms of sharing reports, pictures, links to corporate videos. BB are not what they were a decade ago. Far more choice.
Thanks to many for the discussion on the recent report, was designed to stimulate debate. Just to clarify for the hard of thinking that the headline numbers are all derived from a series of calculations involving Pd futures, EBITDA forecasts, WACC and FCF financial modelling, set against quantities derived from the reserves statements issued by EUA along the way.
You end up with a range of outcomes and assign likelihood’s to each outcome to get a weighted average consensus from which to benchmark other deals in the sector and likely outcome for Monchetundra and West Kytlim.
As some astute folk have noticed, there is a fairly conventional approach to a corporate presentation that I followed. Having a design team at my disposal is a handy advantage.
Or I just make up numbers as I blindly ramp... feel free to think this. Ultimately it matters not.
“Trading soon” - was just a message to have EUA on your radar again, I remain positive as ever.
Pete/Newbie
If you want the full report I put the pdf on the website I run with a few likeminded people.
https://www.powerof78.com/wp-content/uploads/2020/06/Eurasia-Mining_v4.pdf
Don’t know if the link works on LSE site but that’s the full version.
Exec summary is that EUA is worth around 46p before flanks approved
34p - Monchetundra
12p -West Kytlim
(Not assigned any value to Semenovsky project)
All from freely available info, especially the extensive RNS, coupled with a few decades experience in the corporate world doing deals and valuing assets.
Take care everyone.
Full report available at powerof78.com or via my twitter account, obviously I am bullish about EUA with it being my largest holding in 2020. Wanted to give a flavour of what may be ahead when trading resumes from a technical perspective based on various valuation methods used by finance industry. Sector comparison & Net Present Value (NPV) in particular.
Next RNS should provide an indication of which direction this heads. If the appointment of Iain was to close a deal, ignore all of this and enjoy the sudden uplift!
Current Price : 7.2p
Target Current Price : 46p (based on NPV $2.3bn and 80% owned MT, 68% owned WK)
Comparison to other sector deals : 28.9% discount to reserve profit too high as mine not built yet at MT. Believe 10-15% discount fairer - $2.55bn - $3.82bn. With 80% ownership at MT yields 56 – 84p - target 70p
Valuation based on current reserves : 60p – 110p – target 85p (based on 15Moz and Pd @ $1800-$3000 range)
Weighted average for takeover price : 77.5p
Longer term valuation : with much larger mine built at Monchetundra and West Kytlim expanded: 347p – 587p (based on Pd $1800-$3000 range)
Massive uplift potential, average target price 77.5p with potential for more by 2025/6
LionOre Mining International - Was up for Sale back in 2007
Acquired by Xstrata - March 2007 for C$4.6bn
Except it wasn’t...
Norilsk went over the top - C$5.3bn early May
Xstrata fires back with C$6.3bn
Norilsk finally lands it with C$6.8bn
A bidding war resulting in approx 50% premium from opening bid... took 2 months from opening bid with shareholders benefiting hugely.
Good things come to those who wait, especially when Norilsk are interested...
Eurasia Mining - 2020... let bidding commence
Fair to say the news on next few RNS will be what it is, how you react is down to your thoughts on the next few months.
I'll be looking for another million shares minimum, whatever the opening price.
If some of the whispers we hear about are in the next RNS, then I'd love to buy even more but suspect the opening price will limit that!