Eurasia Mining

Eurasia Mining

pgm miners- eurasia mining

Eurasia Mining

Eurasia Mining PLC is an international mineral exploration company, listed on the Alternative Investment Market (AIM), focussed on Russia.

Eurasia’s stated objective is to explore for platinum group metals (PGMs) and gold through self-funded own exploration targets and joint venture partnerships with strategic operators and local partners. Operations are funded from the company’s own equity funds and funded joint venture agreements. Projects are subject to an initial evaluation for viability and once this is established further exploration work is carried out to feasibility study level. It is then the company’s intention to either proceed to develop the project to production or partner the project with a suitable operator.

*Please Note That Estimates and Valuation Ranges are Only Valid for a Maximum of Six [6] Months After Publication Date

 

Value range – 20/12/2021

Intrinsic Price (GBp) 121.10
Value Range Low (GBp) 115.04
Value Range High (GBp) 127.15
Implied MCAP (m) £3,520.23
Implied EV (m) £3,503.40
AIM Index EUA
Financial YE 31-Dec
Currency GBP

Business Activity

PGM Mining (Palladium, Platinum, Gold) + Battery Metals Mining

Key metrics

Close Price (GBp) 23.20
MCAP (m) £662.0
Net Debt (cash) (m) -£16.6
EV (m) £645.4
52 Wk Hi 45.00
52 Wk Lo 5.07

Key ratios

(Net Cash) /Shareholder Equity % -2.51%
FX Rate USD/GBP 0.72

Extractives Sector Research
AiM Market Index
Analyst Team
+44 20 7419 7928

extractives@acfequityresearch.com

eurasia mining

WAI JORC de-risks Monchetundra Flanks

Eurasia Mining (EUA.L) an AiM-quoted Russian Pd / battery metals dominated PGM miner RNS 16 Dec 21 announced a JORC from Wardell Armstrong Intl. (WAI) for NKT (part of M Flanks Kola and north of West Nittis (WN). WAI assigns a low end NPV of US $1,188m, of which 80% is attributable to EUA shareholders. The deposit Inferred Mineral Resource are 50% Ni, 33% Pd and 13% Cu et al. We consider the WAI JORC de-risks Flanks in part. We may also use the inferred resources JORC to raise part of our mineral assumptions. WAI uses a much lower WACC than our NPV. Our new WACC is still approx. 33% higher vs. WAI. Our EUA EV rises to $3.5bn. We use significantly lower long run Ni price and Cu price and a 20% higher Pd price vs. spot, suggesting an Implied EUA VR GBp 115-127. If we use Pd spot price our valuation still rises.

89%

Monchetundra mine 2025E pre-tax cash flow $89m

28.2%

West Kylim mine 2025E pre-tax cash flow 28.2m. EUA now operates the mine on a 100% revenue basis compared to previous arrangement before 2020 of 30-35% revenue.

EUA operations plan delayed 12 to 24 months due to 7m suspension and Formal Sale Process

2020-2023E

+17,709%

Revenue 2023E £1,995.4m up 17,709% vs. £11.2m 2022E

+17,312% 

EBITDA 2023E £1,415.7m up 17,312% vs. £8.1m 2022E

+17,654% 

Net Income (unadjusted) 2023E £972.8m up 17,654% vs. £5.5m 2022E

+17,864% 

Net Cash from Operations 2023E £1,336.3m up 17,864% vs. £7.4m 2022E

Rh production excluded from valuation for all but West Kytlim;

License granted 15 Moz Flanks by Sevzapnedra, reducing flanks risk;

Pd supply constrained;

PGM prices significantly exceed our valuation assumptions.

FTSE AiM vs. EUA (green line) price relative.

PGM Market Outlook Remains Strong

The Platinum Group Metals refers to six metals – ruthenium, rhodium, palladium, osmium, iridium, and platinum. Of these, the two most important are palladium and platinum. EUA focuses on the mining of these two metals.

Despite the Covid-19 driven correction (and V-shaped recovery) in Pd prices the underlying upward price drivers remain very largely unabated in a supply deficit market. We believe the Pd supply constraint, and rising demand in what is an inelastic largely non-substitutable good, is further sheltered by its tiny % contribution to overall auto costs. These characteristics of the Pd market leave head room for far higher prices than seen prior to the recent and ongoing pandemic.

EUA sum of the parts valuation £2.96bn operations contributions – it is still all about Monchetundra

(Yet to include Rosgeo JV, Iridium resource from projects or Monchetundra Lo+Wn+Flanks Rhodium resource, PGM price assumptions highly conservative vs. 2021 average and current spot prices)

+92.4%

Monchetundra Flanks

+4.9% 

Monchetundra Lo + WN

+2.7%

NPV West Kytlim

1) Potential resources within the existing company licence and the flanks application of ~15 million oz.

2) Potential resources occurring within 5km of the Monchetundra mining license and areas neighbouring the company’s deposits of ~4 million oz.

3) Potential resources within the wider Monchegorsk district in which the Monchetundra license is located of ~21 million oz.

Eurasia Mining valuation catalysts

  • Monchetundra Rosgeo JV DFS and geology information;
  • Development of Monchetundra flanks;
  • Installation of 3 more wash plants at WK;
  • Covid-19 accelerated policies for regional or a global green hydrogen transport economy

Asset One

NPV Monchetundra Flanks £2,738m

Asset Two

NPV Monchetundra Lo + WN 146m

Asset Three

NPV West Kytlim 79.5m

EUA West Nittis and Loipishnune production

EUA progress cuts risk rate

Monchetundra geochem successfully completed

Rosgeo values EUA JV in-situ-metals at $100bn

Change at PGM stock Eurasia

EUA Post-Results 1H20A

EUA Pre-Results 1H20E

Does Monchetundra make EUA a £1bn+ play?

To see the latest Eurasia Mining press releases visit their website.

To know more email extractives@acfequityresearch.com and follow us on
acf equity research linkedin
acf equity research twitter
acf equity research instagram
acf equity research facebook
Christopher Nicholson, Managing Director, ACF Equity Research

Christopher Nicholson

Managing Director/Head of Research

I am a financial analyst, entrepreneur, professionally qualified equestrian and amateur eventer. Amongst others, I trained as a financial analyst at Global US based fund manager Legg Mason Investors and have been head of Technology and Media Equity Research at Bryan Garnier, a pan-European investment bank and brokerage.

I founded ORACA Independent Equity Research a ground breaking highly independent thinking large-cap secondary comm business and ACF Equity Research, a very high-quality independent issuer-pays small and mid-cap research business. I opened our first corporate finance business (Destrier Partners) and am approaching the launch of our first non-financial services business. In my view, I am only able to do these things because of the quality of the team I work with at ACF. For 11 years I broadcasted as an expert guest and wrote regularly in the leading pan-European and international media including Bloomberg Television, BBC Radio 4 and the Financial Times.

I studied Biochemistry at Kings followed by Economics at LSE and can conduct business in English and French, I speak German and have basic knowledge of Spanish and Italian. My free time, which I make sure I carve out, is in part each day spent on my passion – riding, competing with and caring for my horse(s).

 Mike Wort,Non-Executive Chairman, ACF Equity Research

Mike Wort

Non-Executive Chairman

I have managed over 20 IPOs in the US, UK and Europe from small to large cap, I am proud to be ACF Equity Research’s Non-Executive Chairman.

I am also Executive Chairman of Texadon Oil Plc focussed on oil & gas production in the Texas Gulf Basin and is a Non-Executive Director of UK AiM listed Diaceutics, a diagnostics commercialisation business. I am a life sciences communications expert and have a background in large and mega cap pharmaceuticals.

During my more  thann  20 IPOs and secondary raisings I have brought in well in excess of £600m.

In addition, I have co-founded a number of life science start-up companies in Europe and the USA.

I am a life science communications expert and former life sciences CEO (large to start-up). He graduated in microbiology and lectured to science undergraduates in both the UK and Nigeria. He joined the pharmaceutical industry, working in a number of senior sales, marketing and clinical roles for Glaxo, SmithKline and Wellcome in the UK and overseas.

Appointed IR Manager for Wellcome, I helped organise its global roadshow for a £2.4bn secondary offering.

I have consulted on and conducted M&A and DD in the life science sector and developed disaster recovery programmes for SME companies.

I worked with Deutsche Bank to privatise the Bulgarian pharmaceutical industry. As the CEO of Balkanpharma, I led the consolidation of the three key assets into one cohesive unit. Balkanpharma has, through a series of M&A activities, become a significant part of NYSE listed Allergan.

Formerly MD at De Facto Communications, Bell Pottinger’s healthcare offering, I recently retired from Walbrook, the UK’s most successful SME PR/IR agency.

 

Amalia Barnoschi, Head of Operations, ACF Equity Research

Amalia Barnoschi

Head of Operations

Joining ACF at its founding I started in financial services in 2007 on the sell-side with ORACA, a large-cap independent equity research business that changed the industry. Before financial services I was a highly successful and rapidly promoted young manager in manufacturing and have worked closely at board level for over 15 years with SMEs in the City and in other financial markets.

I co-run ACF with our MD, as Head of Operations, responsible for driving profitability and developing and designing processes and managing projects for ACF and for client partners to allow our portfolio of businesses to grow. I am bilingual English/Romanian, read Italian and am working towards my accountancy ACCA qualification with AAT.

I love to relax by making time for my favourite out-of-hours activity – photography – taking my first formal nature course in May 2018. I have a keen understanding and interest in horses, though not a rider, this is combined with a life-long love of polo.

Anne Castagnede, Head of Sales & Strategy, ACF Equity Research

Anne Castagnede

Head of Sales & Strategy

I am a sales professional with a top-tier luxury goods background. In the past 5 years I managed flagship boutiques as well as working for some of the great Haute Couture houses including Chanel and Jimmy Choo, where I established a reputation as a top performer by developing, maintaining and offering information and guidance to new and existing clients.

I have researched, recommended and implemented service opportunities as well as improvements. In the early days of my career I trained with Air France and later with Chanel. On my journey I acquired management skills from back office through to front office and have a high degree of practical IT literacy.

I know from personal experience that passion leads the way to perfection and my will to learn matched with my sales ability will result in clients being in very capable hands. My bilingual languages are French and English and I speak Spanish. Off-duty my passions are languages and art.

Renas Sidahmed, Sales & Strategy / Staff Analyst, ACF Equity Research

Renas Sidahmed

Head of ESG / Staff Analyst

I am a macro-economic and financial analyst, linguist, mathematician, professional dancer and chef. I worked for four years with the IMF, two and half years with the International Finance Corporation (IFC) and eight months with the World Bank in Washington DC.

I also wrote award winning research notes and met with senior politicians with varied global and local interests in both wealthy and less developed economies. My sector expertise includes natural resources (particularly oil & gas) healthcare, manufacturing, infrastructure and investment portfolio management.

At ACF, as part of my staff analyst role, I am also Head of ESG / Sustainability and its products and services.

Before joining ACF Equity Research, I worked with Japan’s second largest brokerage, Mitsubishi Bank, in the London office. I speak six languages including English (native), Italian, French and Arabic and obtained an MBA in Rome and a Mathematics degree from a sister Ivy League – Smith College. I joined ACF because of its entrepreneurial, female friendly City culture, overarching global values and excellent growth prospects.

Anthony Kimber

Anthony Kimber

Senior Analyst ESG / Sustainability

I have considerable experience in the wealth management and private banking industries. I am co-author of the Platforum UK Wealth Management Market Overview report, and previously was Research Director at PAM Insight, a specialist publisher for the wealth management industry. I engage in research and analysis both qualitative and quantitative and am an experienced project and business development manager. I have been commissioned by UHNWI's, companies and organisations for various bespoke projects.

I also contribute to major news and media organisations, compiling and analysing data and research for the Daily Telegraph and Evening Standard on national government and environmental issues. Prior, I contributed to the Guardian, the Spectator, BBC news and investigative programming, the Sunday Times, and the Sunday Times Rich List.

My interest in ESG and sustainability is focused on raising awareness and achieving practical and workable solutions to the climate crisis we are facing. I enjoy spending my free time with family and friends, watching cricket, theatre and film.

Anda Maria Onu, Sales & Strategy, ACF Equity Research

Anda Maria Onu

Sales & Strategy

I have strong analytical, planning and execution skills, I love working as part of a team both inside ACF and externally with our clients and prospective clients.

I am used to working with and within senior leadership teams and understand the needs of small and medium sized companies through my current and previous professional experience, I graduated in life sciences with a specialisation in Ecology and Environmental Protection in Romania in 2007 and for my first job I worked in a laboratory carrying out chemical analysis of industrial waste-water.

I am passionate about the environment and work as a volunteer for the Sussex Wildlife Trust doing conservation work at the Old Lodge nature reserve. In my spare time I am a school governor and have been a juror at the Royal Court of Justice. My hobbies are dance, horses, swimming, opera and theatre.

Zak Mir, Technical Analyst, ACF Equity Research

Zak Mir

Technical Analyst

Zak Mir has 30 years financial markets experience and understands credible influencing across digital channels in order to drive stock liquidity. He is an accomplished author.

I am part of ACF’s advisory and execution team helping growth companies (nano, micro, small and mid-cap) maximise their profiles to achieve the optimal investment message.

Amongst others I have worked for Man Group companies, Berkeley Futures and Sucden. I have been a technical analyst, derivatives broker and Chief Market Strategist for a number of brokers in the retail space developing and optimising client trading strategies. I ran the well-attended annual Master Investor conferences and am a keynote speaker at the UK investor show. I also host the CityAM Podcast.

Analytical communications is part of my forte – I have variously been a markets columnist, editor and commentator for influential retail financial information outlets, amongst others – Investors Chronical, Yahoo! Finance, Shares Magazine, international leading long-form periodical The Spectator, CNBC and Bloomberg TV.

Away from the markets, I am a song writer and musician and have a long and patient interest in politics – areas that continue to be potential additional professional careers.
I was attracted to ACF because of the effectiveness of its high quality research and its forwarding thinking culture.

Richard Calvert, Director, Distribution & Service, ACF Equity Research

Richard Calvert

Director, Distribution & Service

I’m a Modern Marketing Strategist with a strong CXM, digital transformation and innovation background working with global blue chip clients, modern creative and media agencies and start-ups.

I put people, data, technology and brand at the heart of everything I do – always delivering highly creative and effective integrated solutions with engaged, excited teams. I believe in taking everyone from the Account Exec to the C-suite client with me on the journey.

I work with Global clients as easily as entrepreneurial start-ups across a broad range of categories from Automotive to FMCG, Financial Services and Technology. My recent focus has been on Digital integration; Relationship Marketing; Content Planning and Brand evolution.

Specialties: Strategic Planning, CXM, Digital and Business Transformation, Programmatic Marketing, Proposition Development, Content Planning, User Experience Development and Design, Mobile, Consumer Insight Development, Brand Planning and Development, Information Architecture and Design, Business Development, Digital Channel Strategy Development, Brand Development, CRM Strategy and Delivery, Business Development

Adrian Chiappe, Editor, ACF Equity Research

Adrian Chiappe

Editor

Adrian has over 20 years investment research writing, editing and supervisory analysis experience for leading investment banks including Barclays Capital, UBS, BNP Paribas, Jefferies, S&P, Danske Bank, ABN Amro, Lombard Odier and Bear Stearns.

He has a deep understanding of his subject. Adrian has executed editing and supervisory analysis for investment banks, brokerages and fund managers. He has up-to-date knowledge of the operational and regulatory framework for international institutional equities markets. Adrian is a materials scientist and has languages