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Hi All
In my opinion they don’t have the DFS yet however I would expect to see it by the end of this month if the submission was on the 23rd Dec as some have highlighted but I can’t validate that date anywhere at that point it has 30 days from that point from a completion perspective.
The other alternative is they could have received it but by having some disputes around terminology/ allowances therefore it’s bit of a back and forth sort on appeals process
All hypothetical of course but it’s more likely option 1
Hi All
Whatever type of holder you are LTH or newbie it’s worth remembering everyone has the same objective to make money.
I can absolutely see why there maybe some disappointment we have been slipping backwards over the last few weeks and everyone’s going to have different investment points.
Sit back and asses your portfolio has your risk appetite changed do what’s right for you and only you can decide that with your money!
Personally I am still really positive about the stock
I interpreted a lot of positivity from the RNS and the process where in and the metal price forecasts over the next few years look amazing.
There’s are a lot thrown together valuation of EUA it’s impossible to derive true value due to all of the data not being available yes the region looks great buts It’s like doing a jigsaw without the picture....it takes time to put the pieces together and see what’s being built.
Remember why you invested in the stock and if those foundations haven’t changed then nor should your opinion on day to day price movement.
Lots of handbags on here over the weekend you would forget it was a forum sometimes.
I personally feel we will have a strong week next week due to Biden actually being in place , the stimulus package being pushed forward and the rejoining of the Paris agreement being one of the first acts all of which have green initiative at the core that require PGMs so should be some positive sentiment among miners.
I also recommend people go look at any the the economic papers for metals this year all are set to go to records high with Palladium and Platinum called out as the biggest 2 rises.
Looking at the vaccination rollout issues across the globe I only see that hindering South Africa further from a Covid impact perspective as-well as the political and labour issue.
EUA are really in a unique position at the moment with other factors playing heavily into the process
It’s a very carefully worded RNS but all in all very positive the conditional offer piece i called out a few weeks back.
In my opinion the running order for the next steps will be DFS update , Resource update with AP findings as there an impartial party to validate the metrics and then the confirmed offer.
It was inevitable there would be some delays due to Covid and restrictions on travel in my opinion but I don’t think we will be waiting that long.
It’s Caranage in the South African mining industry due to all the workforce , supply issue and Covid has just accelerated that decline massively and their current vaccination programme is 3-5years
The spot prices of PGMs look like it’s going to go into another run which will keep increasing the value of assets it’s turning into an almost perfect storm
Hope everyone had a nice weekend
People are reading into this disclaimer much more then is needed
The website has live feeds that directly publish to the website EUA can’t control that content and every website has content disclaimer when they have live feeds
Obviously no one likes seeing a stock lose value over the last couple of weeks personally there’s nothing wrong with sitting back and reflecting on your portfolio and risk appetite as each individual will make a decision based on there own risk appetite.
We seem to be quoting the take over panel regulation a lot on this forum so go and read the 2.4 and 2.2 checklists on the Takeover panel websites as there is a lot of misquoting on what actually has to happen.
The DFS delay is disappointing don’t get me wrong it could have been worded better but they wouldn’t have even put “expected” if they hadn’t be advised by the committee on it potentially landing it’s just a wait and see.
Just to follow on from Monty points
1) Barrick only owned a small percentage of the licenses I think it was 51% from memory
2 ) the investment required at the time I believe was 840million a nice eye watering amount just to become operational
3) The exact amounts of deposits needed further drilling I can’t find anything close to the numbers you have quoted.
4) Development time was previously Quoted at 5-7 years
Please can we stop quoting other companies in regards to EUA as there is nothing comparable and that includes both positives and negatives
Hi djm1
I can only speak from historic experience but the due diligence to accept a client on a success fee basis is pretty lite it’s doesn’t come just down to money but reputation and brand in the industry for future business
Below
1) Do I think there a higher % chance of a sale then not even if it’s a slim majority
2) Are we aligned to the key stakeholder valuation of the company Ie we both think it’s worth the same value.
3) Does it’s benefit us in other ways ie let’s say here as an example there was a Chinese buyer it would show you can bring international powerhouses to the table to Agree a deal which looks great when you want to do business in those regions.
The UBS part isn’t the bit that interest me if I’m honest it’s the DLA piper part and what capacity they have been operating in a even retaining them isn’t cheap. Given EUA has some legal expertise already in house it’s a shrewd appointment that in my opinion would be unnecessary if nothing was happening.
Graph71 I will also try to answer your question aswell a conditional offer is an offer based on particular steps being completed
This is just an example Company 1 offer 22p a share based on successful diligence against resources , licence ownership & environmental standards now if you look at EUA and the amount of data there must be over 20 years overlaid with state registers it’s mind boggling if I was a buyer I would be going through it with a tooth comb appointing some like AP to validate the findings and update if possible after this step is completed it’s then a firm offer that needs to be RNSd
AIMO
Reading through this forum on the weekend you would think the world imploded
As someone that’s has been involved in M&A previously TMS a conditional offer can be made within an FSP dependent on buyer due diligence again this does not have RNSed until that is complete.
Just to be clear an expression of interest can lead directly into a FSP aslong as the takeover panel are informed which I suspect they were before the FSP started otherwise you wouldn’t have had any of the dispensitions at the start of the process there would have been retrospective applications
In my opinion this sale process is not a simple process given someone is potentially buying one operational mine and potentially resources at another location theres a lot of legal complexity.
For me any potentially buyer would want to see the operation aswell as the data room which will have had some significant delays because of Covid so personally as this point am not too concerned.
There seems to be a lot of comparison with other company’s sales and resources this is absolutely pointless as It’s like comparing apples and pears different jurisdictions have different subsidiaries , laws , standards , extraction cost , composition etc etc
Hi All,
I have seen a few threads around the DFS and it’s relevance to both the SP and the FSP so thought i would add my opinion
1) WK is EUA largest revenue producing asset currently so any production or resource updates can be realised straight away by any buyer especially as funding is going to be required for MT infrastructure to production which is 12 month minimum
2) The DFS will give lenders confidence that they are going to see a quicker ROI with an asset already producing revenue IMO this would be used to offset spend on the new infrastructure ie an increased production volumes which is what the DFS would give you with a 365 operation
It also slightly derisk the EUA portfolio a bit by increasing revenue quickly at the assets already in production.
If I was going to be lending potentially billions of
Pounds I want to know how quickly I am going to be seeing a ROI.
On the last point that keeps being mentioned on the FSP conditional offers based on buyer successful due diligence do not have to be RNSd until this is completed.
I recommend looking at the dispensitions EUA had in place at the start of the FSP and reading the takeover panel code
Hey Stealthworks
Geckos Analogy is fairly good remember it all depends on how you buy the house.
An FSP is more similar to an auction model Where you can appoint a surveyor and solicitor to look through all the information at hand before deciding to proceed or bid.
The Auction process can be as long as the seller wants and normally always have a reserve price to be met.
Just thought I’d tried and give you a different perspective.
Hi TMS
You are correct a formal bid does have to be declared and RNSed out however if a bid is made but dependent on successful due diligence completion by the party involved it does not have to be RNSed until that processed is completed as it’s not considered formal until then from my understanding.
I also tried to find any precedent in a FSP where dispensation like EUA has been removed by the panel it has never happened anywhere from what I can find.
if anybody can find an example happy to be corrected
The other consideration to take onboard is all the RNSed info since the FSP announcement have referenced the process from strategic board announcements, through to the placing and DFS update it’s just you have to look for comments/references therefore I don’t think panel will be interested one bit at this point and that’s without playing in worldwide covid delays to everything.
TMS
You are only quoting the part of the Takeover Panel that cast doubt when there is a far more likely outcome of EUA asking for a dispensation at the start of the FSP considering they stated there was interest from multiple parties
the changes introduced to the Code in 2011 mean that the Panel on Takeovers and Mergers (the Panel) can grant dispensations to a target company allowing it to conduct an FSP without being required to identify a potential bidder publicly. A potential bidder participating in the FSP will also not be subject to a PUSU deadline. This enables a potential bidder to take the appropriate time to formulate its strategic plans for the company, and to undertake the necessary financial and operational due diligence.
AIMO
TMS
There are hardly any booked / official reserves of Rhodium across any EUA areas and I partly believe that at the time of the initial studies the price of the commodity just didn’t warrant the interest you can say the same for Palladium for many companies looking back a few years
The DFS gives the opportunity when you know what your trying to prove up the opportunity to do just that.
Even the Smallest amount of Rhodium will add massive value to EUA you also need to take into consideration the Increased production volumes it’s not unfeasible to see a x10/20 extraction increase over the 365 days a year.
Any positive production or resource upgrade IMO will absolutely increase the share price.
My theory is that at this point the price will already have been agreed but there will Significant due diligence being performed against the lending criteria as there are a lot of unknowns potentially good and bad here and a large investment required over time to extract maximum value from the areas
I just don’t see an single entity doing this alone given then scale of the task so selling of some of the smaller assets and taking others in a (JV) for me seems the most likely given the team they have bought in.
If a buyer for any of these assets sit outside of Russia then the legal complexity are vast especially for mining from licence ownership , through to environmental impact Russia are tightening up on this a lot since NN Spill
AIMO
Hi Stealthworks,
I normally sit in the background and observe but thought I might be able to add some small value here.
1. At the moment its impossible to put a costing on the DFS due to not knowing the underlying data from ground composition through to depths. We have seen a snippet of the data in EUA presentations which looks promising but there data room will be a treasure trove of analysis to which we are seeing the breadcrumbs
2. There is absolutely the possibility that there could be an increase in non economical resource however I think this is unlikely given a DFS would not be instigated to not add value to EUA and again they will have access to much more data then us PIs
It’s also worth noting the increase in PGM prices since this was first undertaken which should in theory make things more economical.
The problem with the PFS vs the DFS here and it’s all
In my humble opinion is the rapidly changing environment within the PGM space in terms of pricing and demand if you look at the time a PFS was performed and then soon to be DFS completion everything has changed prices are pretty much double , ground composition, plate movement all things that are significant factors when kicking off a DFS which again you can’t really put a value on.
One element with DFS that need to be considered increases in the production limits I would not be suprised to see this a x10 or 15 of current volumes at WK given the extraction limit at the moment secondly the focus on rarer PGMs within the area from the time the PFS was conducted would make a significant difference to the value If upgraded.
Again all this is in my opinion but hopefully somewhat helpful
My first post on EUA but been invested a while
Tilly what’s your thoughts on the accumulation being linked to the MSCI index listing? just looking at the MIA totals over time and the talk of the need for 30million shares.
It would explain a lot in terms of the MIA volumes
Increasing over time with more frequent smaller accumulations as to not drive north the price .
As I don’t think the MSCI have to declare the have the required shares amount until the listing day