RE: Key..2 Nov 2019 13:18
I have spent the morning researching this and I would say do not expect an RNS Monday morning as you may be disappointed. I piled in at 1.8p and 2.34 and 3.7p without research, yes stupid I know. I am now about evens and will just hold now and probably add on more weakness which I fully expect.
The deal to sell the assets (not the company!!!!!!) of Kola and Urals will likely take some time due to negotiations, approval and the interested parties fully evaluating what they are buying and how they can make their own profit from it. They will surely not pay the basic converted price of $2bn for the Kola assets as they will need to factor in their own operational costs etc. I need to look one more time for the market valuation of the Ural asset. Can someone help?
When the sale does go through (I speculate a high probability) the share price will increase due to the large amount of cash in the company and highly likely dividend.Note; the $50M is an available loan payment that may not be needed so not for the div! I cannot see the SP going to £1 as some people calculate but up by a few pence. With the banks on a success fee basis they will surely find some good proposals. I don't know what the fee is but this will be a nice cut of the sale value I'm sure. This is not a get rich scheme in my view but will be rewarding in the long term. It looks to me like they are trying to expand to new areas and use that cash to upgrade their operations.
I am still not 100% on some things despite my research. It looks to me like they will sell their assets and then use their exploration licences to find more metals which have been submitted but not approved for Mochetundra flanks. Does this sound right? They believe some palladium at about 15Moz total but this cannot be guaranteed. Some risk here I think.
For West Kytlim they are now in production and taking 100% margin and this cash will also be used for expansion, exploration and hopefully further mining should extra licences be granted. We will see in more long term how this progresses.
Warrants have been exercised and I suspect these will/have been dumped to take some nice profits. I would do the same for about half of the shares I think and hod the rest.
Overall it looks like a good medium/long term investment to me and I will need to hold through some more rough patches in SP. EUA stated no need for any further dilution/fundraising which is a positive to me. Any gaps in my knowledge or more genuine information is appreciated.
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