Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
To quote wasarunner on the HZM site but just as relevant to us with our nickel resource:
“Multiple ways this can play out but it gets super exciting mid decade (or earlier). If people are thinking of selling, and a profit is a profit one can't argue with that, try and let some run and see what plays because 'nickel is the next gold' as Elon put it.“
GLAH
TC
Price of Nickel per tonne is currently approx $14,000 and in the original MT licence area we have some 30,000 tonnes of it. Guesstimate on the resource inclosing the wider flanks area working on a 7 x multiplier gives over 200,000 tonnes with a market (not In the ground) value of close to $3b.... and then there’s the copper. Just saying.
Patience!
GLAH
TC
Fact: sp has risen close to 50% in 20 trading days
Fact: no debt
Fact: two licences have been approved recently
Fact: EUA’s resources are now bigger than when potential buyers first expressed interest
Fact: UBS is on our side
Fact: BoD have lots to gain and aren’t in this to make a loss
Fact: we’re in a defined, regulated, FSP process
Fact: IIs have been willing to pay market price for shares (ie no discounted shares for the Boyz)
Fact: Pd is going up in price
Fact: we’ve got lots (And gold, platinum, nickel and copper!)
My opinion: fear and impatience leads to ‘blindness’ to facts, impulse selling, and regret.
GLAH
TC
Just been offered 22.4p ps for 200,000 shares ie above supposed sp. best hold on to yer shares, methinks!
GLAH
TC
Dummy sell - immediate quotation: 16.97p for 800,000 shares @ 10.52.
TC
Dummy sell 16.85p to sell 784,000 shares. Instant quotation.
GLAH
TC
Just done a dummy sell for 400,000 shares - immediate offer of 17.22 p share. Clearly, MMs want shares!
GLAH
TC
Thought I’d take a trip down memory lane! This from July 2018. Things have moved, obviously, but as stated in my earlier note: the direction of travel is clear.....
Value of Monchetundra 29 Jul 2018 14:30
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
TC
There’s a lot of noise out there in bulletin board land, so I might as well add to it.
Any potential new investors should read through the RNSs for the last year. Ditto those who might be beginning to doubt or getting itchy feet. The momentum built up behind the explicit statement of getting VFM for the share holders aka the big three directors (not an ounce of criticism intended) can be clearly mapped, and while testing the resolve of even the most loyal LTHs at times (eg NOMAD announced two days before deadline for potential cancellation of AIM listing), the BoD has turned up trumps at every turn, outwitting the shorters and enhancing share value.
Look at the way in which the whole EUA package’s value has been enhanced: the addition of flanks at WK and MT; the move to accelerate revised ‘in the ground’ resources; setting up permissions for more parallel mining at WK; maintaining the option of mining at MT with Sinosteel.
Together with the low CAPEX, the location of MT next to Norilsk’s PGM processing facility; the price of Pd and Pt; the shortage/demand for these metals in the context of fiat devaluation and Covid; global emissions requirements, new battery technology.
All of these developments make for a strong business case for potential buyers of EUA.
Check for yourself: the momentum is there, and it is no surprise that there are a number of suitors nor that the likes of UBS are willing to take on the task of a sale on a ‘no deal, no fee’ basis.
So if new to EUA, do your research and look at the valuations and the journey to date. If a holder, savour the fact you’re in a share that has still a long way to go before it reaches fair value. Reflect on that factS over the coming days and possibly weeks as MMs try to prise shares from you, reassured that they’re only trying to get your shares cos they’re worth much much more than 17p a piece (and buy on the dips perhaps)! And as a final thought/ bit of research: Semenovsky!!!
....Or look elsewhere/sell - then try and find a share that is likely to give you the same kind of return over the coming weeks (60-130p a share?).
DYOR, of course, and research again.
GLAH
TC
Well, I’m betting on ‘working days’ and 28 from the 1st July announcement of the sale means Friday 7th August (or Monday 10th!). All good fun. While an open ended process, at the very least, an update on the progress of the sale in the offing. Exciting times, and after so long, really enjoying all of the MM shenanigans (and making the most of the buying opportunities).
Have a great weekend ALTHs
TC
Can understand the newer shareholders might be getting a little twitchy. Only natural. Be interesting to see how far MMs walk this down. A last ditch attempt at freeing up shares, perhaps, before news breaks? Who knows but MMs will have to go some to get at my sp average. No advice intended but I will be holding - sell or mine; happy with either.
GLAH
TC
Well, another useful day consolidating the sp, letting the impatient and those with other priorities depart. If no early morning RNS, tomorrow, I can see another attempt at a tree shake with the sp rising back up into the close in prep’ for news early next week.... BWDIK! Patience the key and but a nanosecond for us .4 pencers!
GLAH
TC
Thanks, SA. Not sure about your ‘full value’ figure of 70p, though, given .....
MT: 15,000,000 ozs x $1,800 (low Pd price) x .8 / 1.30 = £16,615,384,615 which at the 15% in the ground price paid in other sales for comparable PGM resources (which did not have the same low CAPEX and OPEX of MT) gives an sp of approx 90p and that excludes the copper and Nickel deposits (£2b?), Semenovsky, and, of course, WK. If these are only worth, say, an additional 10p, we’re still looking at a £1 per share for the company as a whole which, even if discounted again by 50%, gives 50p.
I doubt the BoD would let the company go for less.
As you say, some timely RNSs are likely soon with the BoD having looked to see what the initial lifting of suspension might do to the sp, and getting tomorrow’s phase of the sale out of the way. Without news, the sp has done well and suggests the approach was the right one and the sp can now form a solid platform for further increases based on, for instance, the Flanks licence.
A question: from your experience, if sealed bids, does that mean a bidder couldn’t submit a subsequent bid if it wanted to trump the ‘winning’ bid ie gazump? All’s fair etc etc.
Would be a shame if folk put in a Sell order, influenced by your figure of 35p, assuming it’s the ceiling. I’m sure they won’t.
GLAH
TC
Well, as I said, the usual games being played and I hope folk weren’t shaken from their shares and were able to take advantage of the dip. There will no doubt be more but remember that the first phase of the Sale process ends Wednesday, we still have the Flanks licence to be issued, UBS and CITIC will be busy earning their cut of the eventual deal, and the BoD will be working hard to get a significant return on all the shares they’ve taken over the years instead of salaries....and there are NDAs out there, with prospective buyers lurking beneath them!
GLAH
TC
... suggests MMs want shares.
GLAH
TC
No doubt there’ll be attempts to separate holders from their shares. For me, the case to hold remains overwhelming when the sp movement is put in the context of news to date, and the Sale process. Easy to get caught up in the minute to minute sp, but I just remind myself that large holders have to declare by Wednesday, and then the process opens out for bids, that NDAS are already in place, that the Flanks licence is due, and that some big players (UBS, CITIC, Sinosteel, NN) are all in the mix; this stops me making any impulsive move. Each to his or her own, of course, just be sure you aren’t drawn in by the intraday shenanigans - they’re done for a reason: cos MMs recognise the (high) value of your shares!
GLAH
TC
Beggars belief
Hi. Don’t think there will be an impact over 30 yr time frame but could well influence Pd prices over the short, even medium, term and hence our sale price.
SA is on the brink of a C-19 disaster which could well mean mining is hit hard (considering the deep mine working environment) which could increase the shortfall.
(On the other hand, will there be a lasting impact on car sales if home working and changing work patterns embed? Difficult to say.)
Overall, I think, it will be a positive (not wishing ill on anyone who is affected by C-19, I hasten to add) in the context of our sale, right now. Open pit mining as EUA has recognised, is safer and less likely to be interrupted by C-19 safety precautions, and by general manufacturing 21/22 demand should have returned to something like pre-Covid levels.
I’m sure those interested in the company will have been factoring in these aspects of supply and demand, as will our BOD.... and amending the value upwards as a result,
I hope!
GLAH
TC
I take it my ‘prize’ is in the post?
; )
GLAH
TC
Hi. Interesting that my EUA shares in my dealing account today have a value against them (7.3pps) for the first time since suspension. Something afoot?
GLAH
TC