RE: You - Hoo, Purchase at the Top, something for you to review!22 Oct 2020 12:25
Interesting perspective on the perceived Rusian risk!
Please take note - Purchase at the top...
? Eurasia is now debt-free. In September 2018, the final settlement of a $522k loan facility (the
remaining balance from the initial $1.25M) was completed by conversion of the outstanding amount
into shares. This means that Eurasia’s balance sheet is now debt-free.
? Monchetundra is a different beast. We believe that Eurasia has a compelling competitive advantage.
The project is a relatively simple open-pit mining operation with conventional processing technology to
be used to produce a PGM concentrate. Despite the market perception of “Russian risk”, we believe that
Monchetundra offers a much lower risk profile than the majority of other PGE development
opportunities globally.
? Perception of Russian risk overcooked. Our view is that any inherent risks of operating in Russia are
“overcooked” and in any case more than offset by being a fully-funded, simple open-pit operation.
Furthermore, the permitting process for both West Kytlim and Monchetundra has not been impeded.
For investors, exposure to PGE mining is typically through South African assets, reflecting the
considerable reserves in the Bushveld Complex of South Africa. However, the majority of PGMs
extracted from South Africa are from underground mines, typically at depths from 700m to 1,500m.
Consequently, many South African PGE mines are highly capital intensive, not to mention that it can
take several years to sink deep shafts and put in place the underground development required for
commercial production.
? Major mining companies operate in Russia. Several major mining companies have operated in Russia
for years and continue to operate without hindrance. There have been no high-profile expropriations
or enforced disposal of assets. Kinross for example has operated in Russia for 20 years and currently
operates too high-quality, low-cost underground mines – Kupol and Dvoinoye. Numerous large
international precious metals companies operate in Russia including Polyus Gold, Polymetal, NordGold,
Highland Gold Mines, Petropavlovsk to name but a few. Evraz, the major steel producer has a large
asset base in the country.
? Investment attractiveness. Russia is a major producer of commodities, e.g. the country produces 38%
of the world’s palladium and 30% of the world’s diamonds and is the second-largest nickel producer.
This means that Russia actually ranks fairly highly on the Fraser Institute investment attractiveness
index which also takes account of the country’s high geological prospectivity and track record of
permitting world-class mines into production.
That should give him a Gobstopper to suck on..
Sign In
Follow the stocks
