RE: To all the people selling17 Dec 2021 16:17
Resources (NOT incl. open pit), are valued at around $10.3b at yesterdays price. The NPV will take into account costs (op+cap) and discount this over a period of 11 years. Note there is further upside still to come:
a) that the open pit has not been included,
b) reserves to resources reclassification and
c) wireframe and block modelling of the high-grade Nickel, Copper and PGM vein part of the NKT is in progress
All of this will increase the NPV and will inevitably increase the value of this particular mine. My estimation of value still to be added is approx. 55% (NPV ~$2.5b).
I'm estimating that the NKT will form ~7% of the total assets for EUA. The NPV can be used as a benchmark with respect to other sales, as I mentioned earlier, Kevitsa which had an NPV of $670m, sold for just over $700m in 2016. Eurasia have commented on this in a Vox interview. Although not every mine is sold at or above the NPV, it gives an indication of what the maximum expectations can be. Even if sold at 50% of the NPV, the total sale could be anywhere between 365p to 730p per share. In my opinion these calculations are crude and there are more accurate ways to estimate value AND other costs have not been taken into account. Secondly, as we know, the sale may not be for ALL the assets and as such anything above £2.50 in my opinion would be a very good price.
What's different today vs last week? We have JORC CPR prepared by Wardell Armstrong. We have a much more accurate and verified data for the assets and EUA has kindly provided some benchmark (NPV) for private investors. It gives a way of managing expectations.
The current share price disconnect is another matter, it's something that happens and doesn't necessarily reflect the current value in the company. If anything this should have pushed the price up to more than 30p as a minimum which will IMO form the new support level.
GLA
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