Member Info for Montmuzard

Much nicer vibes on here this morning. Two more headbangers for the green bin too. It's getting hot in there.

I've been monitoring this stock for a while and just finally taken the plunge. All very good news. The only potential fly in the ointment is whether the government's sabre-rattling around the Northern Ireland Protocol manifests into unilateral action, in which case it's plausible the EU will give notice to suspend the TCA (hardline voices in Europe would even advocate termination). However, my sense is that, now Johnson is going to survive partygate (whatever the merits of that) Truss is likely to have her wings clipped a bit, so I'm confident that even this government wouldn't do something as stupid just as investment is starting to pick up post-Covid and post-Brexit.

All good points, but poor comparisons in my view, not least because very quick M&A processes are far more unusual than very long ones which often take years. Doing DD on assets the scale of Eurasia's is a massive undertaking: it's slow, expensive, open to huge amounts of conjecture in terms of future projections because of the partial knowledge that everyone has from drilling which is, by definition, educated guesswork (both on what's in the ground and how much can be extracted, as well as future prices). All of this was compounded by the pandemic, making it difficult to travel and do site visits which they've acknowledged. Just because DD was complete by one party, it doesn't follow that the M&A process would be expedited: we know for a fact that they (or some party) wanted JORC CPRs doing, which cost money and take yet more time. Remember, Dmitry said that they wouldn't be rushed, and they're not. Then add in the war, which has clearly set everything back further.

Chelsea is a totally different beast: its assets are obvious to everyone (Deloitte do a report on football finances every year which is impeccably researched). They're also straightforward to calculate compared to EUA's given that revenues and costs do not fluctuate dramatically. Plus, the Chelsea sale had a clear deadline set by government and the realities of the football calendar, and everyone involved has an incentive to get it done quickly. It's also not a very complex business in the grand scheme of things: it's not like an acquirer has to engage in a hugely complex integration process or anything like that. They just keep it running with existing staff.

The Twitter deal isn't a great comparison either as it's a vanity project by one billionaire. I'm sure if Elon Musk had rocked up at Eurasia and offered a cheque for £10bn two years ago the deal would also have been done quickly. But that's not how mining M&As work. Plus, it looks like the Twitter deal might collapse anyway.

As I said in my earlier post, not having a PUSU deadline arguably works in our favour with Eurasia: any buyers know that progress on the operational side means that the longer the process goes on, the closer we are to mining, and the greater upward pressure there is on the price they'll have to pay. I still remain convinced that part of the reason it has taken so long is because there are so many parties at the table, the deals (for three separate subsidiaries) are incredibly complex structures, and we've been in a bidding war throughout where those different parties do not want to lose out on assets which are the last of their kind (in turn making newsflow limited). So, it's in our interests, if that is true, for it to have run for as long as it has (especially given that all the current Russian mining sales are fire sales, which Eurasia isn't). All IMO DYOR

"...i can understand why some shareholders are getting weary and worried bout their investment here"

I can up to a point, but only because a declining share price can cast doubt in the strongest of minds. However, criticism of the news the board have released over time just demonstrates that people don't know how to research or read RNS's properly. Do they even read them? It's one thing to dig around on these boards for new information. It's quite another to be swayed by the evidence or logic-free bleating of the green coffins. I mean, seriously: I know BAE was just joking about flipping a coin, but are people really so un-researched and doubtful that they think this investment is a 50/50 shot? It really isn't, and it's only the depressed (manipulated?) share price that is making it seem as such. If anyone is seriously wavering, I can strongly recommend printing off all the RNS's from the past 2-3 years. Read them one after the other. Shut out the noise. Don't worry about the share price. Dmitry certainly isn't and he's seen tens of millions wiped off his paper gain since the peak. Just follow the trail that the board have laid out for us. It's all there in black and white, and it's the only information that really matters.

"But surely the BOD could have thrown us a crumb......"

They have. In the middle of a war, they've confirmed that sanctions do not affect their ability to execute on their M&A strategy, that there are no new material (i.e. negative) developments to report, and that they've appointed a new NED with $100bn+ in M&As successfully concluded -- and, implicitly, contacts amongst the most powerful extractive sector companies in Russia (and therefore the very top of the Russian state -- in order to get their "Russian assets sale process" (not potential, and plural) over the line. In the current context, with NDAs presumably still covering everything, I'd say that's a pretty big crumb. Difficult to see how much more the board could have done to drag the horses to water. Up to you if you want to drink.

"Also THG isn't for sale (officially) so perhaps its a way as Tygra pointed out to make the offerers put up or shut up."

@Magnum: That would be my suspicion. As I understand it, most normal diversified companies that are subject to acquisitions require a PUSU deadline because the stability of their business depends on having a reasonably swift and clear end to any M&A process (especially if that process fails and they have to carry on and remain attractive to investors). This is exacerbated for many entering FSP, because they are already vulnerable and use that process to protect themselves from the asymmetrical power of acquirers. I remember reading something a while ago about the introduction of FSPs, which is quite a new mechanism, which was that, in certain markets, the perception is that you use it because you are vulnerable and already seen to be weak vis-a-vis bigger firms. So, having the option to move into that process and force PUSU makes sense.

In Eurasia's case, none of these conditions apply. It's a non-diversified mining company looking to sell some core assets, after which it will either shape-shift to a very different company or be wound down (if full sale). The FSP, alongside the suspension (again, in my view) was used to force potential acquirers into a structured process whereby they needed access to the data rooms and could only do so by being inside, under NDAs and explicitly agreeing not to buy stock on the open market. The rising price of the stock further insulated the company against this. Plus, Eurasia is fully-funded with Sinosteel, has cash in the bank, no debt. And, crucially, it does not need to the M&A to be successful. If everything collapsed tomorrow and potential buyers walked away, the progress that has happened on the operational side is so significant that we are only a year or so away from beginning to mine Monchetundra ourselves. If nothing else, that has to concentrate the minds of potential acquirers. It's the last non-consolidated palladium play.

A final though here. If there were no serious proposals, why on earth has the strategic process essentially been paused (from the perspective of investors) for the past year while masses of extra unreported drilling have been undertaken at Monchetundra (lots of good research by various people on Telegram and Twitter have attested to this), Absolute Precision have been all over the assets, and we wait for the JORC CPRs undertaken at great expense by WAI? If these were not at the buyer's behest, we wouldn't need them, and we'd just be cracking on with the first stage of the mine build on the basis of the Sinosteel contract. The fact we're not, logically suggests serious progress has been made on the strategic side, which means we're now waiting for the company to execute on the non-binding offer(s) on the table.

"If all negotiations had fallen through, it would have been RNSd'"

Agree Layla. Even better: we've literally had an RNS in the past week that says there are no new material developments to notify. If the credible party had withdrawn their proposal (or, I imagine even signalled an intention to do so) then that would be a material development. There is no way the company's legal advisors nor the NOMAD would be complicit in letting them avoid notifying the market.

Where's the RNS to say the credible party has withdrawn their proposal?

"Mont, there's no offer. You can't go around saying there's an offer when there isn't. Trying to worm out by then saying binding offer makes no odds:

Give it a rest. Nobody cares what you think. We've all seen your mad rantings to yourself on Twitter. We all know you're a trader spreading FUD and desperately trying to get a cheap buy-in. Perhaps you're also working for the boiler rooms trying to help the 50m shorts close in short order too? Perhaps you're also a bit miffed because you got schooled on tax law yesterday, so you're trying to draw me into a semantic row like you've done with Mac and others? So you can then rant about it on Twitter to yourself some more?

You're right. There hasn't been a binding offer. I'm not worming out of anything by recognising that I should have used the word proposal, for that's what it is. But it's still on the table. That's a fact. And the fact the company are confidently talking about "asset sales" rather than anything potential implies to me that we're soon going to see actual binding offers. So you'd better find some new tactics to scare people, because nobody's selling.

"There hasn't been an offer Mont to our knowledge. If there had been we should have been told about it."

True that there has not been a binding offer yet. But I think we can be fairly confident that what is on the table is almost as good as. I certainly am. Nobody does extensive due diligence on assets of this scale - which in itself costs an enormous amount of money and human resource - and makes formal written proposals if they are not serious about seeing them through to a binding offer. The final written in-stone offer will come immediately before the company executes. They’re not stupid: keeping everything in-play is how you ensure the best outcome and the right to keep up everything under NDAs until the very last moment.

Agree it's not the full picture. But, it's an important part of it. We know, by definition, that the credible party is still at the table. So if there are also other players at the table too then that means we should only be feeling positive. Which in turn means - returning to Del’s original point - that the FSP was not a failure. FWIW, my view is that the FSP achieved its aims, along with the original suspension, of forcing potential buyers into a structured process and preventing them from buying up stock on the open market with which they would have had greater leverage over the company. The outstanding options and last year’s 3% dilution only reinforced this. In that sense, it unquestionably fulfilled its aims.

We left the FSP because they had an offer for substantially all assets by a credible party. That party completed due diligence over six months ago. We’ve had no RNS to say the offer has been withdrawn so by definition it is still live.

I bought a McDonald's in London in early 2003 which means I'm responsible for all the dead people in Iraq.

"This is going to a massive short squeeze imo"

Maybe it's already beginning: just ticked up ....

Well, we're not talking about divorce proceedings, we're talking about tax liability, and using tax concepts loosely is a prime reason why people get it wrong so often.

"Domicile is permanent home. Look on the net, there's lots of arguments about it for tax purposes"

Yes there are, and none of them are a basis on which tax arises (which was your original point which was wrong). It's your tax residency that matters in determining where you pay tax. The point of domicile is that, in countries that recognise it, like Britain, you can elect *not to be taxed* in your place of residence on your worldwide income that arises outside of the country. But this does not mean that you will necessarily pay that tax in your place of domicile (indeed, most likely, if you're rich enough, it will arise offshore). However, this is generally only in common law countries. Russia does not recognise the concept of domicile, so all Russian tax residents are taxed on both their local and worldwide income, and it's the concept of residence that matters here, not domicile, which is completely irrelevant. Of course, Russian people have "a" domicile - everyone does, by definition - but it means nothing in the context of Russian tax law.

Domicile isn't a basis for taxation, residence is, and generally only exists in common law jurisdictions. Russia doesn't recognise domicile. Residents in Russia will pay tax due to being tax-resident there, their domicile is irrelevant. But you carry on.

What's IG's justification for only allowing sales of EUA stock? It's a British company, not sanctioned in any way, so the fact that it owns Russian subsidiaries is neither here nor there (and if it were an issue, surely they wouldn't allow any trading at all). Sounds fishy to me: piling up stock for the MMs to gobble in the coming re-re-rate?

"why would you need to a hire in a very experienced (and presumably well connected) M&A guy to close out a deal?
Why wouldn't you, especially given how complex the transactions presumably are, and how that has likely been complicated by the ongoing geopolitical instability?

"The appointment feels much more to me like EUA had someone ready to buy their assets, who now can't due to sanctions/reputational hazard, and so EUA are having to pivot to BRIC countries (i.e. mainly China / Southeast Asia where Matyushok specialises) in order to find another buyer".
It's possible that this is true, but if the original credible party that informed them in writing that it had completed due diligence had equally informed them in writing that it had pulled out then they would have to update the market. Given that every recent RNS has said business as usual, it's equally (if not far more given his expertise) likely that Artem's appointment relates to the hydrogen project and the PGM/nickel deals are ready to roll.

"I would point out that Matyushok i also on the board of H2Transition so it's possible he's only been brought in to work on EUA 2.0 whilst EUA 1.0 sits on ice."
So if you think he's been brought in to work on EUA 2.0 why are you also saying above that he's hawking the other assets around to BRICS buyers? It's far more likely, in my view, that the first part of your comment here is right, but not the second: he's been brought in to work on EUA 2.0 (he may even be the missing jigsaw piece to keep things ticking over after the fundamental change of business) while the EUA 1.0 deal isn't on ice at all, but is rather very close to being executed.

"If its a full asset sale I guess we wont have shares in EUA2?"

My suspicion all along has been that, if the EUA 2.0 is going to take the hydrogen project forward, there'll be a dilution down the line with existing shareholders given the opportunity to reinvest some of their dividend from the EUA 1.0 asset sales into the new company. However, with today's news - and ongoing questions over Russia since the war - it could well be that Artem is being put in place to facilitate a quiet disposal down the line. Either way, it's all gravy for existing shareholders IMO.