#EUA – Nyud and MT sale together

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 :

  1. Nyud is being sold/part sold with MT and that is why they were keen for the EGM
  2. The sale of MT is imminent before this Nyud transfer takes place.
  3. The sale of MT will happen before another licence granted, if Nyud wasn’t enough.
  4. 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?

(As borrowed from @richarddugdale3 – I am a map thief, who credits the right person)

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.

#EUA – June thoughts

Something the ‘glass half empty investors’ tend to ignore is that you shouldn’t take each rns in isolation. They tell the story of the company over time.

For example, back in January

“Since launching the Formal Sale Process on 1 July 2020, Eurasia and its advisers have engaged with a wide range of parties, and have to date received non-binding offers in respect of both a possible acquisition of the Company as well as other transaction structures.”

So whatever this current non-binding offer for substantially all the assets will amount to, it is judged superior by the Board to the non-binding offer for the whole company as of Jan 2021.

Now something from the Annual Report becomes very relevant to me, the ‘glass half full investor’…

It credits Dmitry for landing the Rosgeo JV. No offence to the others, but they are geologists and miners and I assume it was Christian doing that JV to keep his exploring boots fresh rather than retiring.
But no, it was arranged by the same person who since September 2020 has been concentrating on M&A, landed the deal to add 75% of 104.6Moz of Pt equiv to the company assets over time.

Why would he do that when his focus is on the company sale – I suggest it is because he is a top top dealmaker. They are bolting on as much as possible for the buyer of Monchetundra. Who probably was interested but asked what else they could get. “You want to buy more?” says the dealmaker, “ Hold my pint, I’ll find you more…”

So here we are, a company on the up, that can raise money at market rates without discount, adding assets most mining exploration firms would have wet dreams over gaining access to.

So yes, it is taking longer than we want, but take the step back, see what is being assembled in front of us – the Beast from the East as Kola Peninsula takes on Bushveld over the rest of the decade.

Annual Review Summary

These two parts are important as they show company progression. Ability to raise serious funds at market rates, bringing on board more Institutional Investors whilst continuing to make progress with the asset sale. With $23m in the bank, they have the tools to develop assets.

The company acknowledge the hard work of employees, nice to see. They also acknowledge our patience – whilst developing the company we own a part of into something much bigger! I have a lot of patience, Barlowesque levels, when they are doing such a good job on this front. It was also nice to see them honouring the late Gary Fitzgerald, who did so much to further the company over 2 decades.

News about Monchetundra

This could be huge. To me, i like a bit of conjecture and I think this is instigated on behalf of the credible party interested in acquiring Monchetundra. I think we will be seeing JORC status on the reserves, whilst they work on proving up most of the 40Moz estimate. Yes 40Moz – underpinning the estimate figure is mentioned as well.

So much to be pleased about now, the progress in the last 12 months is amazing to witness.

Too much is being made of the current share price and talk of the FSP ending. I think it is clear they are working on better options than a full company sale at the time it was explored. Now I hold my hands up at this point, I wanted the full company sale. So apologies to anyone who feels I misled them, I merely express my opinions at the time of writing, same as I am doing today.

However, the palladium, the platinum, the rhodium, the consistently high PGM pricing, Rosgeo, Dmitry the dealmaker, Christian the industry figurehead, James the mining expert – these things are going nowhere.

This is what investing should be based on, analysing the fundamental prospects of a company, the strength of the management team and the desire for others to have what they are building.

All the best to everyone