Value of Monchetundra29 Jul 2018 15:30
New readers may be confused by some of the statements on the boards and those of us who’ve been here a while may need to pinch ourselves when we look again at what EUA and we shareholders have. So, to remind all of the sheer size and value of the Monchetundra resource.
- 89,000 kg of Palladium & Palladium Eq, currently £22,655 a kilo = £2,016,000,000
- 15,495 kg of Platinum, currently £20,460 a kilo = £317,027,000
And remember Monchetundra also has:
- 2,139 kgs of gold, currently £30,021 a kg = £64,214,000
- 28,124 tonnes of copper currently £4,789 = £134,685,000
- 30,400 tonnes of nickel @ £10,511 = £319,548,000
Totalling £2,851,474,000
So, in total at 80% of overall value, EUA has £2,281,179,000
If it agreed a similar deal to that at West Kytlim ie 35%, that would be £798,412,720 = 33p per share
So, why go for an “in the ground” buy out price of, say, 10% ie £228,117,920 = 9pps (or >5% as some, ‘less optimistic’ shall we say, have been quoting)?
Of course, (before the “Ah, buts” start) these are ideal calcs; even so, they show the potential here.
You might also want to note:
- these figures are in pounds Stirling, not US dollars
- it looks like EUA will be six months ahead of its project plan ie mining could well be on track for Q 3, 2019, perhaps sooner, given AGM confirmation that the project development is already under way (see Monchetundra Project Gant chart on EUA website)
- many assume EUA would take the money and run but why take a couple of hundred million when 12 months could get you much much more?
- China needs palladium and Nickel and prices are forecast to rise
- “in the ground” figures being used by some need to be viewed carefully given CAPEX for Monchetundra will be much lower than the average of other major mining sources such as S Africa which have to use expensive deep mine recovery techniques
- the Monchetundra resource estimates are approved and yet do not cover the whole licence area, with more ore reserves anticipated on further survey work
- Sinosteel believes in the project and is willing to invest hundreds of millions of dollars to be a partner
- EUA also has Kytlim, Semenovsky, and who knows what other projects will follow
- These figures are all based on facts taken from commodity price sites, RNSs, and EUA’s website. Worth a read if you haven’t yet.
So, “A 2 billion dollar project”? I don’t think so - $3 billion dollars, more like! Can’t help but wonder why some other AIM stocks, with less value in the ground, more obstacles and longer lead in times have an sp that look far more speculative... but EUA’s business case is becoming increasingly difficult to ignore.
IMHO
Definitely DYOR
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