Member Info for Montmuzard

Noticed the SP has just dipped slightly: we're clearly gonna get some MM games as the EGM unfolds. Ignore them!

20% of MT *is* presently worth about £60m. So if that is what unlocks a full company sale for the best possible price you can bet your bottom dollar they’ll sell them to EUA. This is especially so if the owners of the 20% know the final sale price and it values them at multiples of £60m.

The same reason most of us here want a full sale: because it means they can crystallize their gains immediately. If a deal doesn’t go through they have no guarantees on timeframes or amounts of revenue.

I like the theory that the placing shares are being used to buy out the remaining chunks of WK and MT in order to facilitate a complete sale to the buyer. If that is the case, then it means everything else is agreed - and the price is likely to be at the upper end of people’s expectations - which also means the other RNS’s should come in pretty quick succession. Last orders at the bar!

Must mean news is close and the IIs are getting nervous about whether they'll be able to keep fill their nets!

I was in ITX after the Woodford fiasco when it was down at 2p. Great company. Shoulda held. Much like the people who were invested in Woodford's fund I suspect. I bet over the long term a lot of the riskier assets he piled into will prove him right (not that that will count for much).

@Tricky - Exactly. As he said, it wasn't his ideal top slice - although it still will have been a massive gain from his buy-in point - but much better to be mortgage-free on your dream home now than taking the unnecessary risk of being locked into a big mortgage if the endgame doesn't come quite as quickly as we all anticipate it will. Either way, when that endgame comes, he'll still have more money than he could ever spend. Well played, I say.

The thing I've pondering overnight is how well the share price has done despite Anders dripping those 8m onto the market. Hopefully that bodes really well for another strong blue day today.

@Leno - cheers, obviously I hope I'm completely wrong though :-) I'm sticking with £1.50 - £2.70. I think there's an eight in ten chance, if a full company sale, that it comes in somewhere between those two numbers. I'd guess a one in ten chance it will be less than that (but definitely not less than a quid) and a one in ten chance it will be more. I jokingly added a £3.25 guess to Ian's game, but I'd be surprised (and delighted) if it was that much. If you use DShox's recent calculations comparing it to Sibanye-Stillwater, it comes out at about £4.76. That would obviously be nice, but I just don't see even a massive consortium shelling out £14.5bn up front. But, again, happy to be proven wrong.

"I reiterate I'm thinking this will sell for between £5-£10 per share but I woulden't in the least bit be surprised if this goes for between £10-£20 per share."

I think that's insane, for a few reasons. Even at £10, you're talking £30bn. That's half Rio Tinto's entire market cap, and getting on for 80% or more of Norilsk's. It's 30 Wembley stadiums. It's a dozen Manchester Uniteds. It just doesn't make sense for theoretical assets. KAZ might have a lot of debt, but it's already generating $2.5bn a year in revenues.

There is, at present, no concrete guarantee of exactly how much EUA's assets would generate (beyond “a lot”). Some are still waiting on DFS and mining plans. You can't just say "it's worth $500bn, so give us $50bn". It might not be worth that much in ten or twenty years and it might not add anywhere near that much to the balance sheet of the purchaser.

Their priority will be mitigating risk, and asking questions like… Once you factor in Capex and other costs - especially financing interest - how much meat is left on the bone? Not much if they've had to shell out £60bn. What if someone develops a new technology that makes a battery metals redundant? Unlikely, but it will factor into their risk calculations. How much will be minable? Not only are the calculations of that subject to wide margins of error, any mining plans for MT and the other assets will be time limited: much of what is in the ground either won't be economic to mine, or won't be mineable in the timeframe of the concession. This will limit revenues over the 18 or whatever years (although extensions might be sought and given, but they also might not be).

I think we're gonna get an amazing deal. I'm in balls-deep myself and have been for a long time now, and haven't wavered once. I can certainly see EUA generating £5 or so over a couple of decades in a JV scenario. But the numbers you’re bandying about are just silly. I’d be astounded if a full company sale went for much more than £3 and expect it to be lower than this. We should keep our feet on the ground a bit: it’s comments like £20/share that allow the green boxes to describe LTHs as rampers.

"Selling for less than $10 billion dollars would be like completely giving it away"

I agree. But also don't see us getting much more than that in a full sale.

Who knows? (Well, Dmitri does I suppose :-)

If it is an asset sale, a 50p-70p special dividend now doesn't sound like as much to me as it would have done a year ago, and I would hope for a little more depending on the structure of the transaction. That amount implies selling MT/WK for about £3bn (assuming they retain 30% for paying UBS and keeping a good chunk towards financing the JV on the Rosgeo assets). I'd be just about happy with that, depending on the level of forward dilution, the cost of participating in any rights issue and the likely scale of future JV dividends. If we're talking 20p/yr for the next 20 years after dilution which costs us 10p of the 70p we've just received, then all good. If it's a 5p dividend that costs 40p, not so much.

Given (a) where we're at now, (b) the length of time this has taken, with the presumed number of different bidders, and (c) the outlook for PGM prices, where MT alone will potentially be worth $150bn by the end of the decade (and possibly two or three times that if we get anywhere beyond the 15m oz) then £3bn just sounds a bit low. Why would we not just mine ourselves? And why would another bidder not have ponied up, say, £3.5bn? Then, if they did, why would another not have been happy to pay £4bn for MT? Where does it end?

Of course, a real sweetener would be sale of MT, special dividend, and EUA moving forward with the Rosgeo JV while also retaining, say, 10% of all future Monchetundra revenues. That would be absolutely killer. But can it be achieved? Would seem a nice trade-off potentially for taking in the region of £3bn now.

Overall, I'm still expecting/hoping for a full sale personally. Somewhere between £1.50 and £2.70 would, I think, see everyone leaving the table thinking they've won. I can't see it being much less than that now; but wouldn't be surprised if Rowka was right and it's a little higher. I don't buy the truly silly money prices that take us beyond about $10bn overall though. I just don't see how any major firm could take on that much risk (even on $10bn the financing would cost the best part of half a billion dollars/yr in interest) regardless of how confident they might be in their future PGM price projections.

It definitely does feel like the calm before the storm now to me. Only takes one little bit of news - and these boys like to drop an RNS at all manner of random times - to really light the fuse of the palladium cannon. Wouldn't want to be out of this, er, at all at any point ever from this moment-onwards.

@RMR - maybe because the current owners of those segments of MT and WK have no guarantee of crystallizing any gains in any other way? Plus, 9% of a sold EUA is pretty substantial when they have no interest in the Rosgeo assets. It’s also far better than 32% of nothing.

What an absolute gent.

What an absolute joke: 24.7p. Still, makes no difference whatsoever if you're here for the endgame. No point stepping off the galleon for even a moment until we reach treasure island.

I would gladly accept £1 if that's how this concludes, but I just don't see it. For what EUA are sitting on - first mover on an entire PGM district that is the last of its kind on earth with full state support while prices are rocketing amid a massive supply crunch - it just seems a bit too low. It would be £3bn. A lot of money, sure, but potentially as little as 2% or less of the future revenues that could be gleaned by whoever mines it. I don't want to count chickens just yet, but I see £1 as the bare minimum now - particularly given how long it has gone on for - with £2 a realistic middle ground price en route to £3+ which wouldn't shock me at all.

"104.6 Moz - why is the Government owned Rosgeo not just digging this up by themselves and selling it?"

Because it would undermine long-term investment, especially in exploration and technological upgrading. Much easier for government to control licenses and enjoy a nice risk-free return on them, while ensuring companies are attracted to invest in the country.

"But, the question arises what is the sudden urgency to do this now, and not wait for the AGM?"

Because, like the shareholders, they've have enough of waiting and want to get this over the line. My suspicion is that, if there were no FSP and they were going it alone, they're already at the point where it makes sense to start deploying WK income for bringing Monchentundra into production and generating revenue for the Rosgeo JV.

If so, given that there is an FSP ongoing, it makes no sense to keep paying salaries while waiting for it to complete if that's going to take ages. So it is, as Stonk says, a crossroads. We're at the point where decisions need to be made, and this is about forcing the hands of the buyers: in my view, the BOD is saying "we don't want to go it alone, but we can and will if we have to, and, crucially, this is the deadline". The buyers either sign on the dotted line now - to be voted on by shareholders at the AGM - or the board will start putting things in place to go it alone.

I don't buy the "buyers' strike" argument at all. Eurasia will never run out of cash, but it maybe does need some reinforcement if it is going to go it alone. This is about one of two things in my humble opinion. Either it's (a) all about demonstrating unequivocally to buyers that it's time to defecate or get off the pot: up your bid, make it binding, or we do go alone. Or it's (b) about putting in place the architecture to split the assets and sell them off separately (which could also be designed to have the effect of putting pressure on a bidder wanting to buy the whole shebang).

Yes, splitting the region into different slices is absolutely plausible. It has the same effect as creating one massive conglomerate in terms of outcomes for jobs and production in Russia, while allowing a wider spreading of risk because it is decentralised along with a better outcome for us. Makes total sense.