So having a think about the RNS today and recent timelines beginning with the EGM
EUA 9.4.21 – Announcement of EGM to gain ability to raise significant funds quickly.
EUA 12.5.21 – Asset sale, leaving the FSP to progress this particular deal, plus one of the potential transactions proposed would invoke AIM rule 15.
EUA 20.5.21 – Private placement for $20m to accelerate progress on Rosgeo JV
EUA 15.6.21 – licence for Nyud is happening. Doesn’t reveal resources but estimates are all over 1Moz say. More like 5-6Moz but that’s beside the point. They haven’t mentioned the resource level for a reason. I suspect JORC status is being sought which will be great to see.
This Monchegorskoe LLC was set up a while ago according to our research, now activated to soon hold the licence 75:25 between EUA and Rosgeo. Point being this has been known about a little while now and certainly before the statement on 12.5.21
Now statements are always correct at time of writing, but to my mind there is no way that a sale of just MT would trigger the fundamental disposal clause. Nyud is big enough to mean this isn’t the case now in my opinion but not proven yet.
Therefore one of the following different scenarios may be true :
- Nyud is being sold/part sold with MT and that is why they were keen for the EGM
- The sale of MT is imminent before this Nyud transfer takes place.
- The sale of MT will happen before another licence granted, if Nyud wasn’t enough.
- Aim rule 15 will no longer apply to a sale
If option 1 or 2 are seen as most plausible, then things are very close to the finishing line. The buyer has what they want now potentially. If it is option 3 then the clock is also ticking, just not as fast but within weeks/months not years.
Option 4 serves to remind that news could land at any time. The longer it takes, the bigger the firm becomes.
My opinion – selling Monchetundra and Nyud together
After considering events this morning, I’m of the opinion that the offer to buy just MT was sufficient to end the FSP, because it also includes a part of the Rosgeo JV. It just makes sense to me. What is bigger than the whole company at the time of the FSP and worth changing approach for – answer MT+Nyud
It also makes sense as to why Rosgeo came on board – perhaps the buyer is very well known to Rosgeo, could be another State department for example. Rosgeo wanted the JV to allow them to sell an asset (Nyud) that bordered Monchetundra, they had to get Eurasia involved and make it worth our while, as well as their own time and effort. Don’t forget they’ve been proving up the area, we have seen the research now and it is compelling. Eurasia have stressed how well developed 4 areas are, with 5 needing more work. You can see the strategy in execution now.
Look at the map below, area 1 is now being added to ourexisting resources on the left of the main road to Monchegorsk, how long before 2,3 and 4 join the ranks?
Pricing for a sale
This is perhaps the most important part to many, after all that is why we invested. I maintain my fair pricing for Monchetundra and West Kytlim at 94-111p for a sale. Too early to calculate what Nyud may yield, we need to identify the correct resources in the Cadastre. Obviously it will add significant value though.
Share price disconnect – I get it. People are waiting for the asset sale. The market has fixated on the sale and thats fair enough. Equally, I’m trying to demonstrate that yet again that the company is growing whilst progressing on that front. They aren’t going to stand still and do nothing. They state it on most RNS and I trust them to deliver. After all, they stand to benefit more than most with 20% skin in the game.
Please vote at the AGM
I voted in favour, several investors were waiting for an update on what happened to the $20m. You’ve had the update now. The company has done us proud the last 12 months when you think back to being 7.2p and suspended. If all the resolutions pass, they will have the firepower they need to secure more licences over the next 12 months.