Voxmarkets Interview Transcript – SP Angel John Meyer

Interview released 13th May 2021 after big RNS 12th May. my notes on the interview, apologies if any errors but this is an important summary from SP Angel who are well placed to give an informative professional opinion. Please listen yourself if you have time, well worth it.


Justin Waite : JW – Voxmarket Host

John Meyer : JM – SP Angel (Eurasia Nomad)

From 20mins in

JW : Eurasia Mining – explain the backstory for people who are not familiar, as it is quite a popular stock

JM : It’s an unusually interesting situation with Eurasia, they’ve been going through a formal sale process, which is a technical term in accordance with the Takeover Panel rules.

They are also expanding their operations at West Kytlim, which is the alluvial mining operations of platinum, palladium, rhodium, or shall we say the platinum group metal elements. Very palladium rich in fact, in these properties. They are going to have 3 sites up and running this year, which is good operationally.

When it comes to the FSP, they tell us they have a number of potential bidders. They’ve been doing due diligence with a number of those. They’ve had an offer for the company, but the best offer they seem to have had is an offer for a number of the assets.

So we’ve had confidence in these assets, but one of the issues has been that those assets are defined under Russian codes and we prefer to work when we are valuing things after a certain amount of extra work has been done, when those assets have JORC or NI 43-101 standard resources on them. But it doesn’t mean they’re not good assets so they are clearly considering whether they accept this offer or not. Clearly been a lot going on behind the scenes in the background.

Very interesting statement from the company today, worth reading that quite carefully. Certainly gives us more confidence.

JW : So you don’t know what the offer is as yet ? They won’t reveal that ?

JM : That’s not revealed and I suspect there’s a bit more work is needed before it is crystallised. But they talk about a proposal from a credible party that would allow us to pay a significant dividend to all shareholders. That would be a good day for the investors.

JW : So what’s happened there, it hasn’t gone up a lot today, it went up at the start and come back down. Are people not so confident in this offer, what’s going on here ?

JM : It’s difficult to know what’s going on behind the market. Sometimes there is a log jam in the orders. If people aren’t willing to sell then the market might not move very much, equally the buyers may just hold off a bit. It’s impossible to know right now.

JW : So basically it’s a wait and see, but it looks ok at the moment, is that what you are saying ?

JM : The statement today adds a degree of confidence, from the way I read it.

JW : Ok, cool. Marvellous, whats the size of it, its one of the best performing stocks of the last 2 years. It’s been Top10 best performing stocks and now its like £630m. It’s a chunky old market cap now isn’t it?

JM : Just going to check… market cap is £752m on my screen

[closed at £772.4m 13/5/21]

Much appreciated for Justin and John to do the interview, very helpful to hear their views.

My own take on this, perhaps the company are looking to issue their resources to JORC standards if that helps progress the sale and could explain a delay in confirming the deal as a huge amount of work needed to do this when you’ve got millions of ounces of PGM to verify. The Nomad sounds upbeat about things, that is important as they will be best placed to understand the situation. Very professional, not giving anything anyway but hints at the bright future we are all looking forward to as Eurasia investors.

#EUA – Phil Taylor guest post

Phil holds 28.9m shares at time of writing, one of the largest individual holders in the company and invested since 2012. So when he writes, sensible people listen. Below is as published on Telegram this morning, 6th May 2021 :

Long Post so apologies for that!
The FSP is taking a while and leads to nervousness amongst investors. I took a read back on the recent news from EUA to try and get a handle on our direction and possible outcomes from the FSP. It reinforced my belief that this is a once in a lifetime opportunity to be involved in a historically huge deal that may not be very far from coming to fruition.
I always look for the clues from the company and these things start to add up. The story is beginning to reveal itself. Eurasia is in the process of moving from small prospector with a reasonably large find, to owner and developer of a globally significant mind-boggling district of rare metals that’s importance is vital for the development of tomorrow’s technologies and therefore will only increase in value. We now control huge deposits, vastly bigger than was announced not so long ago. The company is now a major force in the area rather than the small prospector we used to be. The race is on to control such assets by not only companies but countries. I believe that when EUA has put all the pieces in place the resulting sale will dwarf the recent deals by which EUA has been benchmarked.

Snippets from recent news and announcements.

From the Notice of EGM
Non-binding offers have been received and are being progressed.
The Board believes the scaling of the Company and its projects should continue while the Formal Sale Process is ongoing.

From RNS’s 9 April ’21
Tamerlan Abdikeev has already added significant value by bringing interested parties from Japan, that are keen to secure PGM deposits. Tamerlan founded INVERO Advisors, an investment, strategy consultancy and M&A boutique focusing on private equity, project finance, global strategy, business development and cross-border M&A.

Japan, a top 4 region in terms of PGM demand in 2020 according to Johnson Matthey, has an ambition to get the leadership position as a hydrogen focused economy

Reputable members of Japan’s business community related to PGM are in discussion to join Tamerlan at Eurasia Japan.

Tamerlan has introduced several Asian companies interested in working with Eurasia, including a Japanese US$21b net revenue company, that is already present in a PGM mining asset.

…developing a new global district for PGM and battery metals mining on Kola.

Monchetundra hosts 1.9Moz PGM reserves and resources within the approved mining permit and a further 13Moz in Eurasia’s adjacent license. In addition, further predominantly open pit deposits exist in the Monchegorsk region and host 104.6Moz of Platinum equivalent Russian Code reserves and resources that are now part of the Rosgeo JV.

The Directors are confident that the ability to allot securities and demonstrate a capacity to develop the Kola PGM and battery metals district independently of other strategic options available to the Company benefits the Company and its Shareholders by improving Eurasia’s negotiating position.

RNS 26 Mar 21
The agreement with Rosgeo, which by expanding Eurasia’s open pit assets both in palladium, platinum and in battery metals by a total of 104.6 Moz Platinum equivalent resources, unlocks a number of additional opportunities for the Company and its shareholders. we look forward to working with Rosgeo, a global company with renowned proficient technical capabilities and the best partner we could have in Russia, as we are making progress on the strategic options available to the Company.

#EUA – Rising Palladium pricing

Thought it might be handy to add some extra rows to the current Net Asset Values on Eurasia Mining assets, given the rising trend for Palladium and Platinum.

Also done a first attempt at how the Rosgeo project might be assigned a NAV.

This excludes any inferred value on the joint venture with Rosgeo, and assumes 75% ownership, but should any licences be secured or further details released, would be very happy to update to include more detailed calculations again. It is clear they have more ounces than can be mined in the next 20 years, so would seek guidance from the Company on how best to value this beast of a project.

Monchetundra and West Kytlim

Rosgeo Project

Initial thoughts on Rosgeo are that I would prefer to be working with a Palladium equivalent figure instead of the 104.6Moz. If it works out at 50-60Moz Pd it would be easier to compile alongside Monchetundra, but maybe there is a Hydrogen Fuel Cell type reason they have shown it as platinum equivalent.

#EUA – upcoming EGM

Getting close to the deadline for voting in the Eurasia Mining EGM. I can’t tell you how to vote, but obviously I was in favour as the Board have asked us to support their resolution.

Send a message via Secure Chat if you have it with your broker like HL or Halifax, II offer it on their website if you adjust your settings to allow Auto Actions linked to your account, ring them up if not. Appreciate X-O charge and the Freetrade ones don’t offer it as they are a no frills service.

Seen a lot of speculation over why they want the resolution to pass and there are many valid reasons it would seem. All we know for sure is that is will assist in their negotations as they work towards a binding proposal.

I just feel that regardless of the outcome I like to know I’ve done what I can to support the companies I invest in – it’s a basic right of being a shareholder and a way to have your voice heard. If you don’t vote it negates your commentary to a large extent.

Hopefully they get this over the line and can continue with their strategy to boost shareholder value which has been amazing to see over the last 18 months.

Further details available in the recent EGM rns and on link below :


Sample text for secure message on HL :

Subject EUA EGM

Dear Sir or Madam,

Reference the upcoming EGM for Eurasia Mining, I wish to appoint the Chairman as the proxy for my vote in favour of all motions.

Best Regards,

<insert name>

Obvously change wording if voting against. If not voting, why are you still reading this!

Settings for Halifax, (HSDL)

Anyone unable to vote via live chats but can’t see the option. (thanks to alta traako for this tip)

Go on google chrome, click the 3 dots on the top right, click settings, click privacy & security, click site settings near the bottom, click pop-ups and redirects, toggle the allowed setting to ON.

Then go back to your provider and the live chat should work.

After you submit your vote remember to turn the settings back off to stop pop ups elsewhere!

#EUA – Alta_Traako EGM rns report

The recent news about the Rosgeo JV [7], the appointment of Tamerlan Abdikeev [16], the mention of Japanese interest [16], and the EGM announcement [17] is exciting but confusing. So, this is my thought process in a somewhat chronological order along with some speculation and why I think it is important that we log in and vote yes in the EGM to support our BOD and help them increase shareholder value.

Brief overview of MT:
•Current reserves in mining permit [1] = 2.2Moz Pd equivalent [2]
•‘Target’ resources within the flanks licence [3] = 13.3Moz Pd equivalent [2]
•Exclusivity zone (not ours …yet) = 7Moz [2]
•Wider Monchegorsky district (not ours… yet) = 17.7Moz [2]
•So, total potential resources as of now 15.5Moz [2]
•Mine plan to produce 1Moz pa [4]
•EPC contract signed with Sinosteel to develop mine if needed [5]

Interesting note:
At 01/07/2020 the additional advertise incentive over and above the current 15.5Moz was “Explorationupside: Expanding mineable reserve base via acquisition of adjacent licences.” [4]. As of the 09/04/2021circular it now states “Expansion: mineable reserve base via the Rosgeo JV.” [6]. Looks like this Rosgeo JVgives them all the additional licences they wanted.

Screenshots for the lazy:

The four pits close to the MT licence:
•Are open pit and suitable for toll treatment [7]

•Incorporated into current (1Moz pa) or new (more than 1Moz pa) mine plan [7]

•Can use current infrastructure at MT [7]

•Faster to develop (get cash quicker) [11]

•Lower cost to develop [11]

•Lower cost to run [11]

•Safer to operate [11]

•Gives buyer the option to transition to underground mining [9, 10]

•Lower cut off grade so more resources economical due to lower costs [12, 13]


The addition of these 4 open pits surrounding MT could constitute the 40Moz Pd that was mentioned in previous RNS [15] and in the investor presentation [2]. The RNS states that in addition to our 15Moz:

  • additional potential resources occurring within 5km of the Monchetundra Mining license andareas neighbouring the Company’s deposits of c.4Moz;
  • And additional potential resources within the wider Monchegorsk district in which theMonchetundra license is located of c.21M oz.
  • The potential for the area could be 40M oz of PGMs, but as stated above this data has not beenindependently verified by Eurasia and other than the area covered by the Company’s existinglicence the Company does not yet have any other licences in the area”.

In the image below, the green part is our current MT licence. The blue parts are Rosgeo licences. If those licences are part of the Rosgeo JV then they could contain the 4 open pits and could constitute the “wider Monchegorsk district” mentioned in the RNS.

Thanks to @R1EXG for making me the nice maps.

The additional five pits (not close to the current MT licence):

  • Are a mix of open and underground pits [7]
  • DD been completed here [7]
  • 20km of exploration and 12 thousand samples taken acros these 5 pits [7]
  • Likely need to develop a mine plan for these as not stated if this has been done
  • This could take us to > 2Moz pa. See GMF calculations for impact of this [14]

SPECULATION – This sounds suspiciously like Volchetuntra [15].

The RNS on 04/12/2019 [15] said:
“The Company would also like to highlight further regional potential specifically in the Volchetundra Project, previously operated by the Company under a Joint Venture with Anglo American from 2004 to 2011, and subsequently surrendered to focus on the Monchetundra Project. Volchetundra occurs 5 km from Monchegorsk. This high palladium deposit now becomes of interest given the recent price appreciation in palladium and the future price outlook. Palladium prices through 2011 averaged less than $600 per ounce. The Company’s database of proprietary information including 12,000m of drilling will be compiled in due course to reassess the projects future potential development. If the Company did want to explore this project again, it would have to re-apply for the relevant licences and there can be no guarantee that they will be granted.”
Now the description of the 5 pits from the 26/04/2021 RNS [7] is the following:
“A further five mostly open pit palladium, platinum, copper, nickel and cobalt assets are included in the JV, where Eurasia has carried out due diligence including c.20km of exploration drilling and some 12 thousand samples taken by Eurasia”

Volchetundra seems to fit the bill from the descriptions. It is also curious that two applications were submitted by Northern Palladium recently. One was for Volchetundra (red box in map below), the other for a zone north of Volchetuntdra (the yellow box in map below). Their application was rejected for Volchetundra but was accepted for the area north. Looks like Volchetundra was being kept for someone else. Maybe for us.

To put the value of the Rosgeo JV into context, EUA’s agreement to acquire the Monchetundra exploration licence began in April 2005 [8]. They worked their way through drilling and studies to gain mining permits [1] and only got the flanks licence in August 2020 [3]. 15 years of work (minimum). This JV offers us the opportunity to acquire the licences to 104.6Moz platinum equivalent that has already been through this entire process, including the feasibility study. Massive positive for an AIM exploration company and massive uplift in shareholder value despite what the SP says.

Combining MT with JV assets:

As per the circular released on 09/04/2021 [6] “The Rosgeo JV aims to establish a world class PGM district on Kola with the Monchetundra asset as the cornerstone project.”. The company clearly are in a great position to sell on the entire Kola districts as it is advertised as a PGM and battery metals district. The reason I think it is all being sold together as opposed to selling MT and keeping the new Rosgeo JV assets is that:

They state Monchetuntra is cornerstone of the project. It can no longer be the cornerstone of the Kola district if it is sold off, splitting up the project.

  • Company boasts strong negotiating power as the own MT. MT is the only mining licence there with anexclusivity radius. Selling it off therefore means we have no mining licence and giving away our advantage. With the additional assets we can now say that “if you want access to MT then you have to buy the lot”
  • The information tells us that the 4 open pits that can use the current (or new) MT plan and infrastructure. If we sell MT then we would need another plan for the 4 new open pit assets or pay the buyer of MT to use the infrastructure that we just sold. Do not think our BOD would enjoy that idea.
  • If we sold MT then a buyer would now be the dominant player in the region and we would be left with the JV assets but no mining licence and no guarantee that anyone would buy the remaining assets. Better say we will only part with MT if the additional assets are bought too. We win from a larger sale, Rosgeo win as they can piggyback on our sale to offload their licences and make money, the buyer wins as they get the entire region to themselves.

EGM announcement:

With all the great stuff above its easy to ask why the BOD need the power to allot shares. Surely, we can just sell the lot now. Well, there are any number of reasons but for me the simplest is usually the correct one. Simplest one being Japanese interest [16]. The BOD state that they are:

“confident that the ability to allot securities and demonstrate a capacity to develop the Kola PGM and battery metals district independently of other strategic options available to the Company benefits the Company and its Shareholders by improving Eurasia’s negotiating position.”

They also announced out of the blue that ‘Eurasia Japan’ exists, that Tamerlan Abdikeev has been doing a grand old job bringing Japanese interest in our assets, and they made a point of mentioning that Japan Oil, Gas and Metals National Corporation (JOGMEC) took a 12.95% position in Hanwa’s acquisition of Platinum Group Metals Ltd in South Africa [16]. We know that EUA do not pad out RNS announcements with fluff so there is a clear reason to mentioning JOGMEC and Hanwa. In my opinion, they will be involved in the sale and they are following the same model they used at Bushveld (i.e. Hanwa buy their position (or all of it) with JOGMEC support).

So, if the sale FSP is almost complete, how does raising cash benefit shareholders more than just selling now? A few reasons spring to mind. Some more realistic than others:

1.Rather than activate the Rosgeo earn out, we just buy the licences. See GMF78 calculations [14].
2. The additional 25% Rosgeo stake. Maybe the audit is complete, and we are going to buy the 25% so that we can sell it all. The RNS [7] states:
a.“Eurasia also has a call option to acquire 25% from Rosgeo after completion of thereserves audit under the JORC Code.”
3. There is 20% of MT out there in the ether that the BOD might have their sights on.
4. Could be anything else. One thing is for sure. The EGM is for the benefit of shareholder value. A massive turn out of PI voting in support of the BOD will speak volumes so make sure you getyour vote in. EUA 2021!


Thanks to A1ex, GMF78, K Knauf & Duggy for help compiling this information.

#EUA – PGM and the LPPM

** This post will be added to as more of the market is found.

So where do all the millions of ounces that get mined every year end up? Long story short, the automotive sector dominates. But who are the main players, the secondary traders and refiners. Whilst I believe a miner is most likely to buy Eurasia Mining, it is almost a certainty the buyer will be involved in the sector already. So consider this a definitive list of options!

A good place to start is The London Platinum & Palladium Market – with

32 Platinum Refiners

28 Palladium Refiners

15 Full Members

42 Associate Members

45 Affiliates

Now there is some crossover between lists, so the following is a brief summary of who is who.

GermanyC Hafner GmbHGood Delivery
Heraeus Metals Germany GmbHFull
Saxonia Edelmetalle Good Delivery
UKJohnson Matthey Good Delivery
Anglo American PlatinumAssociate
IndiaHindustan Platinum Pvt. Ltd Good Delivery
ItalyChimet SpA Good Delivery
JapanAida Chemical Industries Good Delivery
Asaha Pretec Corp Good Delivery
Furuya Metal Co Good Delivery
Hanwa Company Limited Affiliate
Honda Trading Affiliate
Ishifuku Metal Industry Good Delivery
Materials Eco-Refining Co Good Delivery
Matsuda Sangyo Co Good Delivery
Mitsubishi MaterialsAffiliate
Nihon Material Co Good Delivery
Sumitomo Corporation Associate
Tanaka Kikinzoku Kogyo K.K.Full
Tokuriki Honten Co Good Delivery
Toyota Tsusho Affiliate
KoreaHeesung PM Tech Corp Good Delivery
RussiaJoint Stock Company (Gulidov Krasnoyarsk) Good Delivery
Norilsk Nickelnon member
Prioksky Plant Good Delivery
South AfricaHeraeus South Africa (Pty) Ltd Good Delivery
Impala Platinum Ltd Good Delivery
Rustenburg Platinum Mines Ltd Good Delivery
Sylvania Platinum Limited Affiliate
SwitzerlandArgor-Heraeus SA Good Delivery
Metalor Technologies SAFull
Valcambi SAFull
TaiwanSolar Applied Materials Technology Corp Good Delivery
USABASF (Catalysts Division)Full
Johnson Matthey IncFull
Sabin Metal CorporationAssociate
Heraeus Precious Metals North America LLC Good Delivery
Market MakersGoldman SachsFull
ICBC Standard Bank PLCFull
JP Morgan Chase BankFull
Standard Chartered BankFull
Bank of Nova ScotiaFull
Toronto-Dominion BankFull
need researchAlliance Industries LtdAssociate
Amalgamated Metal Trading Limited Associate
Baird & Co LtdAssociate
Cookson Precious MetalsAssociate
CRI / Criterion Catalyst Company LtdAssociate
Metals Trade Overseas AGAssociate
Mitsubishi Corporation International (Europe) Plc Associate
Mitsui & Co Ltd Associate
Natixis Associate
SCMI LtdAssociate
Sharps PixleyAssociate
Triland Metals LtdAssociate
Umicore AG & Co KGAssociate
UOP CH SarlAssociate
UOP LtdAssociate
Avon Speciality MetalsAffiliate
Colonial Metals Affiliate
Comdaq MetalsAffiliate
DD&Co Limited
Dillon Gage Metals
Eiger Trading Advisors Ltd.
G4S Cash Solutions UK Ltd.
G4S International Logistics (UK) Limited
Gemini Industries Inc.
Gerrards (Precious Metals) Ltd.
GFI Securities Limited
ICAP Securities Limited
Inspectorate International Ltd.
Ivanhoe Mines SA
Loomis International (UK) Ltd
Malca-Amit Commodities Ltd.
Mastermelt Ltd.
Metals Focus Limited
Ospraie Management, LLC
Platinum Group Metals Ltd.
Richmond Commodities Limited
Sojitz Corporation
Techemet Metal Trading LLC
Tharisa Plc
Tokuriki Honten Co. Ltd
Tullett Prebon (Europe) Limited
Western Digital Corporation
Wogen Resources Ltd.
World Platinum Investment Council
Group RevenueCompanyFinancial Info
$69.7bnBASFFrom 2020 Annual Report – EUR 59.1bn. German giant of industry, PGM in Catalysts division with American HQ
$60.6bnToyota Tsusho6.69 trillion yen (2019 annual report). This is the trading division of Toyota.
$48.1bnSumitomoFrom 2019 Annual Reports (2020 due in May). A true giant on the global stage. $12.5bn from metal products and $10bn from mineral resources.
$32.3bnAnglo AmericanFrom 2020 Annual Reports. $8.4bn from PGM mining
$26.4bnHeraeusIn the 2019 financial year, Heraeus generated revenues of €22.4 billion with approximately 14,900 employees in 40 countries. Heraeus is now one of the top 10 family-owned companies in Germany and holds a leading position in its global markets.
$15.5bnNorilsk Nickel2020 Consolidated revenue increased 15% y-o-y to $15.5bn owing to higher prices of palladium and rhodium as well as the scheduled ramp-up of Bystrinsky project; EBITDA decreased 3% y-o-y to $7.7bn.
Largest Palladium miner in world and neighbour to Eurasia site at Monchetundra.
$15.4bnHanwa1.7 trillion Yen (2021 estimates) Hanwa is a trading company with operations spanning non-ferrous metals, metals and alloys, food, petroleum and chemicals, machinery, lumber and many other business sectors. The company has solid positions in all of these businesses.
$13.2bnMitsubishi Materials1.46 trillion yen (2021 estimates), precious metals division, invests in copper mines overseas, urban mining (recycling)
$9.06bnHonda Trading Trading arm of Honda, responsible for over 6% of transactions in PGM each year (from their website)
$7.74bnSibanye StillwaterNet profit of $1.78 billion in 2020, the highest for any year since it was formed in 2013, revenue increased to $7.74 billion from $5.04 billion.
$5.83bnJohnson MattheyFrom 2020 Annual Report, £539m profit, £4.2bn sales (exc precious metals trading)
$1.91bnMatsuda Sangyo MATSUDA SANGYO CO.,LTD. is located in SHINJUKU-KU, TOKYO, Japan and is part of the Steel Service Centers & Other Metal Wholesalers Industry. MATSUDA SANGYO CO.,LTD. has 1,436 total employees across all of its locations and generates $1.91 billion in sales (USD). There are 52 companies in the MATSUDA SANGYO CO.,LTD. corporate family. (DNB report)
$733mSaxonia SAXONIA Holding GmbH has 710 total employees across all of its locations and generates $732.96 million in sales (USD). There are 17 companies in the SAXONIA Holding GmbH corporate family. (DNB report)
$114mSylvania PlatinumFrom 2020 Annual Report, EBIDTA $69.6m
$68mC HafnerC. Hafner GmbH + Co. KG is located in Wimsheim, Baden-Württemberg, Germany and is part of the Primary Metals Manufacturing Industry. C. Hafner GmbH + Co. KG has 198 employees at this location and generates $68.20 million in sales (USD). There are 7 companies in the C. Hafner GmbH + Co. KG corporate family.

Think of it as a handy port of call for background research. Some companies are good enough to list some details on their website, such as Honda Trading involved in over 6% of PGM volume annually. Only an affiliate member so will need to go through the full list to work out how many other major players are hiding in plain view!

from hondatrading website

Finally, the Matthey report is an excellent industry leading annual report. A must read for anyone investing in the PGM sector.

Key highlights (from Matthey report) 

Platinum 2020
  • The platinum market remained in deficit in 2020, with sharply lower supplies, and strong investment demand.
  • Autocatalyst consumption plunged by 22%, with steep falls in European diesel car production.
  • Industrial purchasing was more resilient, especially in China, where petrochemical and glass expansions went ahead.
  • Chinese jewellery demand slumped to a 20-year low, although record gold prices encouraged some retailers to stock more platinum.
  • Japan saw heavy bar purchasing in the first half of 2020, while ETF investment turned strongly positive in the second half.
  • Primary platinum supplies shrank by 20%, due to processing outages and pandemic-related disruption in South Africa.
  • Auto recycling contracted sharply on weak diesel scrap volumes in Europe and processing capacity constraints.
Palladium 2020
  • The palladium market remained in significant deficit, driving the price to all-time highs in early 2020.
  • A plunge in vehicle output was partly offset by higher palladium loadings on gasoline vehicles.
  • Consumption in chemical catalysts remained buoyant, with strong investment in new plants in China.
  • Other industrial demand fell sharply, due to COVID-related disruption and price-driven thrifting.
  • Investment demand remained negative, with further redemption of palladium ETFs.
  • Primary supplies were hit by mine closures and processing outages, while autocatalyst recycling also slowed.
Rhodium 2020
  • The rhodium market moved deeper into deficit as supplies dropped faster than demand.
  • With tighter emissions limits boosting catalyst loadings, auto demand fell by less than 10%.
  • Purchases by glass companies plunged, as high prices stimulated thrifting.
  • Primary supplies contracted sharply due to mine disruption and processing outages in South Africa.
  • The rhodium price surged to an all-time record of $17,000 in December 2020.
Outlook for 2021, all pgm
  • Pgm supply and demand are forecast to bounce back in a V-shaped recovery in 2021.
  • Autocatalyst demand will recover strongly, on higher car output and stricter emissions limits for trucks in China.
  • Industrial consumption will remain robust, with pgm use in chemicals set to reach an all-time high.


#EUA – Valuations update 28.3.21

After the surprise RNS Friday 26.3 after hours, I thought it would be useful to try and make some sense of events and how they fit in with what we already know. I won’t go over ground covered brilliantly by others such as Alta_Traako here. We are witnessing the birth of a new district for PGM mining, at a time when rivals are struggling and historic deficits are scheduled to widen.

I think the best approach is to treat this JV in isolation, but also reflect on how it impacts on existing valuations as it is now impossible to ignore that Eurasia have clearly made a good impression on the Russian State. Anyone looking to buy the company has the extra reassurance that they are buying a ESG focussed, Govt approved entity, with connections at the highest levels. A JV like this is not done overnight and Rosgeo work with the major players globally, it neatly explains why the delays in FSP mattered.

Eurasia are now empire building on Kola Peninsula, making the most of the opportunities presented by Nornickel flooding woes and AISC in lowest quartile globally for production.

I believe you can make the case now for reducing the WACC to 17% at Monchetundra on the basis of the State support shown to the company and the flank approval since last time ACF valued the company. This revises the valuations slightly.

I strongly believe they are doing this to boost the final sale, by wrapping up additional areas around Monchetundra, they are giving a buyer confidence they have the area to themselves. Whether it ends up being Nornickel or a new player in Russia, they are buying a lifetime supply of PGM with 100 years LOM if they wish – or an even bigger mining plan than the 1Moz is on the way…

Valuation Methods

How do you value the option to acquire 75% of 104.6Moz Pt equiv ?

Option 1 – In-situ valuations

Using latest spot pricing of $1180/oz for Platinum (and why did they present resources in Platinum, we want to know what other metals are there – seen some Rhodium mentioned today!), calc as follows :

$1180/oz * 104,600,000 * 75% = $92.5bn approx

What is that worth to EUA though ?

If we are working on minimal information, a ready rule in gold exploration is to use $20/oz for inferred resources, $30/oz for measured and indicated and upwards of $150/oz for proven and probable resources.

So which category does the 104.6Moz fit into? I make the case for it being closer to measured and indicated category, given Rosgeo and Absolute Precision were working the areas just last December (looking back a clue something was happening!)

We can only work off given information though, so I take $20/oz for now :

$20/oz * 104,600,000 * 75% = $1.56bn approx

Two alternative options are to take a percentage of the current In-situ value and apply that to the JV area. Working with known data for Monchetundra reveals at 28p share price we are currently valued at 3.4% in-situ assets. I believe this is currently undervalued and a 5% of In-situ would be an appropriate upper limit for the size of resources at Kola.

3.4% * $1180 * 104,600,000 * 75% = $3.14bn

5% * $1180 * 104,600,000 * 75% = $4.68bn

So as soon as the company progress with the JV and we get details on exploration licencing, I would be happy proposing a value of between $1.5bn-$4.6bn to the JV based on a sensible % of in-situ asset values.

The key for me is that they progress asap on this, especially if the flooded mines in Norilsk are out of action for a year or indefinitely. If potential becomes reality, the numbers get bigger!

Option 2 – EBITDA multiples

Lets fast forward a few years, whoever owns the assets have brought them into production and they are producing min 1Moz a year PGM, using Pt equiv to be pessimistic. With 104.6Moz to play with, a 100yr LOM gives a lot of certainty to the owner, so a 9.5x EBITDA multiple (mining industry average) would be appropriate. I assume the same $350/oz AISC as given by the company for Monchetundra.

($1180 – $350)/oz * 1Moz Pt * 75% = $622.5m a year profit before tax (EBITDA)

However, who is happy with mining for 100 years, better to make the most of your opportunity and scale up further. The following table presents some numbers to choose your favourite from :

So in summary, a fully producing JV, assuming the 75% ownership, would be generating between $622m to $1867m profit a year, valued at between $5.9bn and $17.7bn depending on how much they scale up.

Option 3 – Net Present Value NPV and Free Cash Flow FCF

This is the best option for valuing a mining project, but we need more data to make this accurate! Again, it is speculating a few years down the track about intentions and plans. Are they planning to use the facilities at Monchetundra or build additional ones. As I suspect these 9 areas are all intended to be sold together with MT, I will value it very roughly on the basis it doesn’t need much capex to bring to life, beyond what is planned for MT.

Please note though, without a bigger mining plan, we are only using up 20% of the available resources by 2049, so this will seem pessimistic in comparison to other methods :

Option 3.1 – Mine 19.5Moz by 2049 at 75% owned (25 years production from 2024)

Estimated free cash flow of $14.1bn, net present value $1.8bn, still got 85Moz of Pt equiv left worth tens of $ billions in-situ !

Option 3.2 – Super Turbo Beast Mode – buy out Rosgeo and mine the lot in 25 years

Based on 104.6Moz Pt equiv – estimated free cash flow of $68.7bn, net present value $16.5bn

Based on 50Moz Pd equiv (alternative estimate of resources – guesswork) – estimated FCF of $32.4bn and NPV $8.9bn

Shows why we need a full mining plan to use accurate valuations and details of the resources to be mined. Please note, annual global production means this is unlikely to ever happen but it pleases the uber bulls to see the potential! This also backs up Option 2 valuations based on EBITDA at the upper end.

Tackling the naysayers and doubters

To answer a challenge I’ve seen posted around, EUA haven’t spent $0.5m for 75% of the 104.6Moz, it is an intial payment that grants exclusivity on the 9 areas for 24 months. Anyone claiming this is the worth of all that PGM is not worth listening to!

The relevant part of the RNS makes it clear enough what is going on:

It doesn’t mean the FSP has failed either, nor does it mean it is further delayed. Simply put, it is in full swing until an official RNS is released either confirming a sale or an end to the process. The company are very bullish about prospects when you read the comments made by Chairman and CEO :

Another negative comment has been about the cost of acquiring the licences they need and what valuation will be apportioned to the project. Thankfully, Eurasia have done this before, most recently back in 2018 when MT got a mining licence.

If we allow a little inflation, the £48.8k paid for 20% deposit on the licence scales up to a deposit of £500k for 9 licence areas. So it looks like Eurasia have paid the correct deposit for the options if they were buying in open market. This would mean Eurasia need to find another £2m if the relationship is linear. At this time I am uncertain whether the fee is linked to the area of resources though, in which case it would be slightly more once we know the specific area details.

Given they mentioned cash of $6m, they either have enough or they don’t, I assume if they are proceeding along these lines, either Eurasia or the new owner will reveal such matters at the appropriate time. It is insignificant to the value on offer once licences granted.

Summary of Valuations

If you made it this far, well done!

Since I last calculated things, GBP has strengthened against USD, meaning there are some differences. That said, external events can have a bigger impact on these numbers. If the Nornickel mines are lost for a year or more, then expect Platinum and Palladium to be a lot higher in price soon.

In terms of the Kola JV, I didn’t want to jump straight to fair value once the licences are all granted. I think this is a given, but appreciate it will take some time and money to get there. As you can see though, it will be well worth it!

In terms of a short term valuation, clearly we should be moving up from 28p towards the fair values assigned to the various projects EUA have underway. What happens next is down to the market of course, but for potential alone I wouldn’t be surprised if we reach all time highs in the coming weeks.

The FSP is in full swing, Eurasia are carrying on business and adding value to Monchetundra with this new JV, I can only applaud their strategy and execution to date.

#EUA – Alta_Traako guest post

My good friend Alta has put together his thoughts on the RNS 26.3.21 – Sharing so more can see :

The Rosgeo Agreement allows Eurasia to gain a 75% equity stake in each of the nine new mining assets (the “Additional Assets”). The remaining 25% equity stakes will continue to be held by Rosgeo.
• 75% stake in 9 different assets
• US$0.5 million paid initially for access to all 9 assets.
• Free to choose which, if any, assets we want. No penalty if we withdraw.

Further payments due should EUA progress to development of any assets.

Four key points about further payments

  1. The earn out structure means we do not need to fork out cash that we cannot afford to potentially not profit. Cost is spread out as we develop (i.e. not risky).
  2. the cost we need to pay is capped at 75% of the value that would have been attained if the sites were auctioned. This is crucial as it does NOT mean that it is 75% of the current or future value, but 75% of the auction cost. (i.e. very cheap)
  3. No upfront cost
  4. Rosgeo at “arm’s length”. No interference. Peace for us. Free money for them. Win win.
    The Additional Assets have a total of 104.6 Moz Platinum equivalent resources = $124billion.
    Feasibility study done and reserves approved by state (i.e. no exploration risk). EUA has already invested some US$8.3 million across the Additional Assets so likely know most of it very well through previous campaigns. Will implement EPCF to develop.
    4 pits have already been worked on extensively around our current MT licence so EUA know them well. The ore at these 4 pits are suitable for toll treatment (i.e. using current infrastructure the MT plant to generate immediate cash from at a very low cost low cost). Everything is already in place for this to start ASAP. They are also open pit so usual benefits apply (fast development, less risk, significantly lower costs etc. etc.)
    5 more pits seem to be a mix on open and underground. DD and analyses have done here too but likely not as well-known as the 4 pits that sit beside out current licences. Exact make up not specified. Also, no mention off toll treatment so likely far more expensive to develop and operate that the other 4.
    Key for us and likely the development of these Additional Assets is that this does not affect the FSP. “The Company’s existing mining operations in West Kytlim and Monchetundra will not be affected by the JV”. FSP still underway meaning everything we were waiting on is still coming but with an additional $124billion worth of metal to play with.

Scenarios I see listed from most to least likely (my opinion).

Full sale of MT and WK. We get the sale that we initially expected then have the Additional Assets for future dividends or another sale/ series of sales. This makes share holders happy with the biggest pay off plus more to come. From BOD perspective this keeps all long term/ short term investors and institutions very happy while maintaining their dominant status in the region going forward.

Full sale of MT, WK, and Additional Assets (the one I want but cannot allow myself to think about). Bidders may have wanted access to the whole area. So EUA get that access and sell it on. Would be an amazing buyout but seems like it is too expensive to buy at once (in my mind) and we have a 2- year period to agree to develop and then the earn out structure becomes active. Seems strange to get all of this in place to then sell it on. BOD will do what is best for shareholders though.

Sell MT and JV at WK and Additional Assets. Selling MT gives shareholders the initial dividend but also allows the company to keep some of the proceeds for WK development. The current EPCF mentioned for the Additional Assets obviously cannot be used at WK so we would need to finance tis another way. Selling MT could allow this without getting another part involved in the financing while keeping shareholders happy with a much-deserved dividend.

Sell WK and JV at MT and the Additional Assets. Selling WK brings in cash to help develop MT, Additional assets. No need for WK since the Additional Assets are ready to generate cash flow short and long term. Toll treatment on turn-key basis.

#EUA – Feb 2021 update

An eventful start to the year with 3 significant RNS updates to consider. I’ll discuss each one below but my main thought is that we are now oversold and undervalued. The resources remain as they were. Non-binding bids are only one step away from an offer the Company could put to shareholders. The company has the DFS approval for West Kytlim which pushes things along. Plus with platinum on a rising trend we shouldn’t underestimate the contribution this mine could make to a future owners’ annual profits.

Having researched extensively with many others since 2019 and gathered the opinions of over 1400 members of our Telegram group, including some of the largest private holders of EUA there, the calmness shown this last week speaks volumes. We estimate to be holding well over 10% of all stock between us. Being able to discuss matters calmly and respectfully has been a great help to many. If you want to join we are fully open, just follow the link :


It wouldn’t surprise me if we see some significant buying in the next week, also wouldn’t surprise me if the Company release a significant RNS during February. A February timeline would fit with previous mentions I feel. With holidays out of the way, the progress whilst delayed should not be forgotten about. If I decide to increase my holdings in the coming days I’m sure you will spot the buy! I remain as confident as ever in my predictions and wish every investor well in these difficult times.

14 January 2021 – Eurasia Mining Plc – Update on Formal Sale Process

Eurasia Mining Plc (“Eurasia” or the “Company”), the palladium, platinum, rhodium, iridium and gold producing company, is pleased to provide an update on the Formal Sale Process initiated by the Company under the UK Takeover Code.

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.

Progress to date has been slower than expected reflecting the complexity of the process, involving several parties and structures, as well as external factors including COVID-19 related travel restrictions, and more recently delays resulting from western and Russian holiday periods. Notwithstanding these factors, discussions regarding proceeding to binding proposals are continuing. Until a transaction is finally concluded there can be no certainty that a transaction will occur or on what terms.

Further announcements will be made when appropriate.

Main points – multiple expressions of interest are now non-binding offers. Looking to proceed to binding proposals. Note the plural there, they are working towards multiple formal offers. For me a sign of a potential bidding war inside the FSP.

21 January 2021 – Eurasia Mining PLC – West Kytlim DFS Approved

…Christian Schaffalitzky, Executive Chairman commented: “The Directors are pleased with the DFS approval, aimed at production increases, and confirming West Kytlim’s position as the world’s largest operation of this type. After significant capital investment at West Kytlim into the production scale up and into the rehabilitation, the cash position of Eurasia is robust with over $7m, while the Company is pursuing its strategy as previously reported. Further announcements will be made in due course”.

Main points – Great to see DFS approval for WK , allows year round operations for the future owner. Good to see cash position still strong, no need to bolster. The key part – “Company is pursuing its strategy as previously reported.”

28 January 2021 – Eurasia Mining PLC – Share Price Movement & Update

Eurasia Mining plc has noted the adverse movement in the Company’s share price yesterday, following announcement of the trade yesterday for 27,400,000 shares by Alexei Churakov (the “Shares”). Eurasia had received no notification of this trade prior to it being reported by Alexei Churakov himself via RNS on 27 January 2021.

The Company and its professional advisers continue to work on the Formal Sale Process as recently reported via RNS of 14 January 2021. The operations of the Company are ongoing with the DFS for West Kytlim formally approved as announced on 21 January 2021.

The Company has made initial enquiries of Alexei Churakov regarding the sale of the Shares, and he has now notified the Company that:

·    he sold the Shares to cover an urgent and critical cash call,

·    all the Shares were acquired by Veles International (“Veles”), a subsidiary of an investment company Veles Capital,

·    he has no intention to sell his remaining shares and/or options.

The Company is continuing with these enquiries.

The Company notes that the acquisition by Veles evidences interest in Eurasia among institutional shareholders. Veles is a well-established and one of the oldest professional institutional investors in Russia.

Main points – Company didn’t know anything about this in advance. Was reported as a single transaction away from the market, at the share price of the time. He hasn’t sold all the shares he could have done.

Deloan Investments is under the control of Dmitry Suschov so consider those shares locked away. Similarly the options cannot be exercised at this time. Anything else is only speculation at this stage and we should await a further update when the company concludes its enquiries.

Clearly this event rattled the markets and confidence. Wasn’t ideal timing to release in market hours and not give the company chance to respond, so the share price took a hit.

But everything else remains as it was on 21 January. The Company points this out in the RNS to reassure everyone about the strategy they are pursuing.

Are Sibanye lining up to buy EUA?


Feb 2020 – Neal ‘the deal’ Froneman suggests Sibanye’s next deal would be away from South Africa and in battery metals. “We want to play in the international arena. We are probably ex-growth in South African because of our market position in PGMs,” he said. He also spoke to Bloomberg about growing capacity in the US market though, making a $5bn acquisition of a gold producer, so not directly linked at this time to Eurasia.

Worth noting though that in the infamous tweet by Michael Hammond, South Africa was listed a country interested in Eurasia.


May 2020 – conditions outlined for Sibanye making acquisitions in future
Namely cutting debt and returning to dividends for shareholders. So perhaps they aren’t going to be buying anyone in 2020, except…

August 2020 – update on Sibanye H1 results, with impressive profits posted and dividend reinstated for first time since 2016. So the conditions to be met before making an acquisition are in place now. Coped well with Covid restrictions, so expect H2 to be even more profitable as PGM pricing stable.


October 2020 – Sibanye announce new executive appointments. Including Laurent Charbonnier.

“Laurent Charbonnier will be joining the company and assuming the role of EVP Business Development. Laurent has more than 20 years’ experience in investment banking and recently left his role as Managing director and Global Head of Metals & Mining for HSBC, which he occupied for the last eight years.

He was a lead advisor to Sibanye-Stillwater on the acquisitions of Aquarius Platinum, Rustenburg, Stillwater and Lonmin and their related financing (bridge financing, rights issue and bonds).”

A little research on LinkedIn shows Laurent also worked at Credit Suisse and UBS prior to HSBC, being a seasoned professional in the mining investment community and a track record of financing large deals in the PGM sector.

Also in October, Froneman conducts various interviews stating his level of unhappiness with investing in South Africa, talking about battery metals and how he needs to diversify the company to get closer to supply chains and downstream users.



Sibanye under Froneman have shown impressive growth over the years, he isn’t afraid to take risks and has given a clear steer on future direction when you combine these interviews and facts.

They are clearly moving towards an acquisition, whether it is a North American Gold producer, or someone in the battery metals space, or PGM away from South Africa.

With their credit rating improved, finding money to fund an acquisition should be easier too.

Eurasia Mining ticks some boxes for them, especially with Monchetundra on the Kola peninsula. Closer to European markets and large car manufacturers, cheaper cost of extraction.

On the downside, it doesn’t have a lot of gold or as much nickel/copper as other assets.

But the chance to take a crown jewel right on the doorstep of Nornickel, showing Potanin he has a rival, well that might just be the extra ammunition Froneman needs to pull off the PGM deal of the century.

So who will they buy, will it be Eurasia Mining?