Hi CAW!,
H4Energy is under the management of H2 Transitional Capital which are the ex Shell boys.
H2 is detailed at Companies House although very little detail wise, incorporated recently.
I noted the RNS about the JV with H4 and the hydrogen strategy was released via a Reach RNS as opposed to the normal RNS service which is approved by the FCA.
Agree with the retaining WK, fits with the appointment of the ex Rosgeo man as full time at WK and temporary at MT.
Eua were 111th largest holding for Diverse Income Trust.
https://corporate-premiermiton.huguenots.co.uk/srp/lit/X3GB6R/Portfolio-holdings_The-Diverse-Income-Trust-plc_31-05-2021.pdf
Hi CAW1,
"must also provide for a longer processing life for the plant".
So mine MT out and use the processing plant to process for other areas of the JV.
The talk has been of a capacity to produce 1moz pa but the Sinosteel EPC is for 130koz pa.
EUA mentioned toll treatment of areas they could gain when they first started talking about the flanks application and other areas just outside the flanks.
It's also what Rosgeo and tisnigri talk about, the tisnigri report Mac frequently links to has suggested areas being developed sequentially with suggested production from one area for ten years and another area then taking over for years 11 onwards.
Hi CAW! and lovelyboy,
The sub loan part of the EPC with TKG for $50m was because at the time EUA was worth very little and Sinosteel wanted EUA to put up some of the money which they could only do by massive dilution. I think it was DS who negotiated the extra $50m with $26.5m of it paid immediately back to Sinosteel so an expensive deal but stopped the need for massive dilution.
A quote for 10 October 2016 RNS "This EPC contract is being advanced as part of discussions with third parties for the sale or JV of the project (MT"). CS's comment "including the concept of outright proposal to aquire the project and a desire to secure the EPC in relation to MT".
So a buyer could take over the Sinosteel deal if they wanted.
Whether it could be transferred to develop somewhere other than MT or not I don't know.
Hi CAW1,
That's my point, what he has plotted doesn't relate to page 32, 33 of the WA report. His area of mineralisation is scaled up and further north than in the WA report ?
The new extension of the flanks further into NKT would cover all of the historic mine as only part of it is covered currently.
I had read that the historic mine workings were flooded out which would present a problem.
Hi CAW1,
Well done for getting that far on the glossary, I stopped well before then :)
I'm not understanding Richards twitter post as he has the mineralisation zone from the JORC out of place and larger than it is shown in the JORC report where it fits inside the current part of the NKT flanks area.
http://www.tsnigri.ru/magazine/RM/2021/2021_1_min.pdf
The above link has been given by Mac a number of times. It's for a 2021 report from tsnigri on the ores around Monchegorsk and the possibilities for their economic development.
Page 46 is a chart breaking down all the ore areas and what is in them. There are 4 areas of the Vuruchuaivench area (Vuruchuaivench, Plast 330, Yuzhnosopchinsky and Arvarench), the NKT area and the Loipishnyun area which is EUA's initial MT area.
The chart gives a total amount of Pt and Pd across all the areas of 43.2t of Pt and 144.7t of Pd which translates to 1.525moz of Pt and 5.1moz of Pd.
The figures for the Loipishnyun area are a total of 21.31t of Pt and Pd which translates as 750koz.
EUA are saying a potential of c13moz in the MT flanks area which includes NKT.
It's made up of State Cadastre archive reports 22 (NKT 2.3moz) 21 (10.2moz) 20 (472koz) 18 (421koz). This is detailed on EUA's last presentation, available on their website.
The tisnigri chart shows none of reports for areas 21, 20 and 18 potential meaning there's 11.1moz missing and 850koz missing for the MT area.
Hi Judge-mental,
Sorry, have a life away from the EUA board and didn't realise you were addressing me.
I haven't suggested I have any valuation model to value anything at, I tried to answer a question posed by Fr-Jack-Hackett about Pd Pt equivalent figures and their importance for valuing things if they aren't explained.
I'm not interested in being positive or negative, only realistic because the true end value here will be based on what EUA actually have and how much profit it can generate.
My concern with the NPV given for NKT is how sensitive it is to costs to extract and prices of metals produced because the average grades of all the metals are marginal from the figures given.
Pd 0.43g/t, Pt 0.09g/t, Au 0.01g/t, Cu % 0.13, Ni % 0.28.
Free cash per tonne of ore mined about $11, not much room for an AISC miscalculation on what is an inferred resource on a potential mine or any negative price movement.
I expect MT to be much better.
Have a good weekend.
Hi Fr.Jack.Hackett,
Simple answer, because it makes it look like they have more than they do.
At the time the MT resource was given as 1.9moz of Pd equivalent Pt was worth more than Pd so the amount of Pt was multiplied by around 1.7 to account for it's higher price and higher recovery via flotation so the actual 1.6moz of Pd+Pt+Ag became 1.9moz of Pd equivalent.
I have issues with them continuing to use the 1.9moz Pd equivalent more recently when they knew the relative prices of Pd and Pt had altered so much that it was closer to 1.3moz of Pd equivalent.
At the time they booked the maiden resources at MT they properly explained how the Pd equivalent price was worked out.
They are now using a Pt equivalent price because it looks better than using a Pd equivalent price because Pt is worth less than Pd currently so the amount of Pd is multiplied to make it equal to Pt.
ie, if Pd is $2000/oz and you have 1moz and Pt is $1000/oz and you have 1moz you either have 2moz of Pd and PT added or you have 1.5moz of Pd equivalent or 3moz of Pt equivalent.
EUA have given c105moz of Pt equivalent for the Rosgeo JV without saying what metals are included or referencing prices used. This is very misleading to investors and I raised it via email to the company but have had no reply.
It's evident from them saying there are 11.2moz of Pt equivalent at NKT from the recent CPR that they are not just using Pd, Pt and Au figues but also the Cu and Ni figures for the Pt equivalent which makes a considerable difference and that will be the case with the c105moz as well.
A JORC report will not give a metals equivalent price without referencing all the metals included and prices used for them.
Hi lovelyboy,
The 2 shaded areas are the WN and L open pit areas that are the original MT area. This report is on the area to the North.
The $1.7b is estimated gross profit over the life of the mine.
The PGM content was obtained using regression formulas from Rosgeo's recent drilling as the older drill results weren't evaluated for PGM's. So estimated over the whole area from a limited amount of data with work being done on the older core samples to evaluate them for their PGM content to give more accurate figures.
Hi Fish4chips,
The PGM and gold numbers are detailed in the RNS of 4/12/19 and can be compared to what has been reported by WA in todays report which is on Eurasia's website.
4/12/19 figures Pd 55,000kg Pt 18,500kg Gold 7,612kg
WA JORC figures Pd 45,583kg Pt 10,021kg Gold 1,466kg
There's a lesson here in reading RNS's and research.
This Jorc report is on a part of the secured flanks area that EUA say contain c15moz of PGM's.
Extract from this RNS "the JORC compliant Nickel resource has exceeded the Nickel resource registered in the State Cadastre of Mines for NKT (refer to the RNS 4 December 2019)".
The State Cadastre of MInes figures from the RNS referred to give 298kt of Nickel. The JORC gives 305kt of Nickel, a 2% increase.
However all the other figures from the JORC are lower than the State Cadastre figures.
Copper down from 229kt to 143kt.
PGM and Gold down from 81t to 57t.
So previously we had expected this area to have 2.3moz of Pd and Pt but JORC is giving lower figures.
We also now know the c105moz of Pt equivalent for the Rosgeo JV is not just worked from PGM's but includes Copper and Nickel as well which makes a significant difference.
Hi Broxburn68,
I believe they would be acting contrary to their AIM listing requirements if they didn't release the report and only gave headline figures.
As your post points out, the purpose of having a JORC report is so investors are clear on what they are investing in.
"There has been no drilling to expand the resources on licenses that EUA actually own, so the CPR can only restate what is already there."
There was a short diamond core drilling campaign at MT last year and, as the value of the PGM's at MT have increased since the maiden reserves were stated to Russian Standard, more of what was previously stated to be at MT has now become economical to extract and shifts up the value chain and adds value.
EUA pay 75% of the expected auction value for the JV exploration areas not 75% of what value JORC says is there. The final 25% can be bought post JORC report and may be more expensive to by for each relative percent bought than for the initial 75%.
The basic logic behind buying exploration licenses is that through exploration they can become worth significantly more than the license ever cost. Their value at the point they are transferred to EUA is largely irrelevant, their potential future value is.
Hi Gobig,
You raise a very serious point in a possible sharing of profits which I have been trying to highlight for some time.
We know very little of any substance regarding the JV and it's actual worth to EUA.
I think the news on hydrogen projects suggests MT will be progressing towards production ASAP. The question is will it be via EUA themselves via the Sinosteel deal or through a buyer and whatever route they choose.
Chalice mining rose on an announcement of the largest nickel sulphide discovery in 20 years and the largest ever pgm discovery in Australian history on just part of a larger untested area.
EUA having already announced Russian standard resources restated as JORC resources using the same data and drill results used to reach the Russian standard is not going to make much difference IMO.
No company should give a Pt equivalent figure without referencing all the metals that are included in making up that Pt equivalent figure and their prices, without prices and what metals are included it means very little and is misleading to an investor.