One Emerging AIM Listed Resource Player With High Growth Potential: Eurasia Mining Plc              

  • Dec 20, 2019 GMT
  • Team Kalkine
One Emerging AIM Listed Resource Player With High Growth Potential: Eurasia Mining Plc              

Eurasia Mining Plc (LON: EUA) is the United Kingdom domiciled mineral and metals exploration company. The company has a long-established interest in iridium, rhodium, palladium, gold and platinum and is focused on the production of these precious metals, having its principal operations in Russia. The company has a running platinum group mining (PGM) mine in the Ural Mountains, palladium open pit deposit in Russia’s Kola Peninsula which is called as the "Monchetundra” Project. Other than that, the company has an interest in the Semonovsky Gold in Mine Tailings Project, a resource which has demonstrated a potentially low-cost gold production potential in the near term.

West Kytlim operating mine is one of the company’s two core projects in which the company has an interest of 68 per cent. The mine currently holds 2,283 kilograms of unrefined platinum in reserves which is the biggest alluvial platinum reserve in the world, with a further ten tonnes of raw platinum in the potential resource. The company has operated a single washplant on-site during the 2018-19 period, with more plants being planned to increase its production capacity further. The mine though was earlier hired to produce cash flow from which further capitalisation of the asset was to be done. However, all contractors were discharged from the operation by the end of third quarter of 2019, and since then, the company has been operating the project on an owner-operated basis with 100 per cent of revenues accruing to it.

The second core project of the company is the Monchetundra Project in which the company has 80 per cent interest. The company already has an Engineering Procurement Construction and Financing (EPCF) contract in place with Sinosteel signed in October 2016. The agreement provides for full financing of the Project through the building of a 1.7 million ton per annum processing facility at the Project site.

The shares of the company have a listing on the London Stock Exchange in the Alternative Investment Market (AIM) segment, where they trade with the ticker name EUA.

News Update

The company on 17 December 2019 came out with an update on the application process it had initiated for mining licences in the Flanks of the Monchetundra Project area.

The company has been able to obtain approval from the Russian Ministry of Defence for the Project, which is an essential step in the licence securing process. Further approval from SevZapNedra, the regional licensing body is awaited, which is required for the full licence to come through. The company expects the second approval to come in due course.

Financial Highlights (H1 FY2019)

The company released its latest financial results on 26 September 2019, for the six-month period ending on 30 June 2019.

  • The company, for the first time in its history, during the six-month period, has generated profit before tax. It has reported a profit before tax of £69,854 for the current The remarkable feat has been achieved, primarily on account of a decrease in debt servicing costs.
  • The company for the half-year period ending on 30 June 2019 held a cash balance of £317,796, while for the corresponding prior-year half-year period ending on 30 June 2018 the cash balance maintained with the company was £165,825.
  • The company during the six-month period raised fresh capital from the sale of equity amounting to £593,868.
  • The company for the six-month period ending on 30 June 2019, generated revenue from the sale of platinum and other metals worth of £13,316, while for the full-year period ending on 31 December 2018, the revenue generated was of £2,573,329 and for six-month period ending on 30 June 2018, the revenue generated was £447,545.

Stock Performance At The London Stock Exchange

Source – Thomson Reuters (one-year price chart)

At the time of writing on 20 December 2019, the shares of the company were trading on the London Stock Exchange at GBX 2.8490.

The shares of the company during the past 52 weeks of trading at the London Stock Exchange have registered a high of GBX 4.2 while registering a low of GBX 0.40. The company has a market capitalisation of £71.76 million on the London Stock Exchange at the time of writing this report on 20 December 2019.

The average stock’s traded volume as on date and time stood at 4,428,801 and the stock's average traded volume for 5 days was 36,497,145.20; 30 days- 95,998,737.20 and 90 days – 81,822,336.08. The shares of the company have generated a return of 435.35% on year to date basis, 472.27% in six months and 508.42% in last three months.

Project Layouts of the Company

  1. Monchetundra Project

Source: Company’s Website

  1. Urals Alluvial Platinum

Source: Company’s Website

  1. Semenovsky Gold Tailing Project

Source: Company’s Website

Positive Catalysts

  • The company is now totally debt-free. It has been able to retire all its debts with a combination of earning accruals and new capital raising.
  • Platinum prices have been rising through 2019. On 20 September 2019, the spot price of the metal stood at US$ 941/ oz over US$826/ oz spot price on 20 September 2018, a gain of 20 per cent. Rhodium prices during the period rose by 119 per cent, and Palladium prices rose by 64 per cent.
  • As on 5 December 2019, the institutional shareholders were holding more than 5 per cent shares in the company and held a total of 56.94 per cent shares, providing it with significant stability.

Institutional Shareholdings

Source – Company’s website (data as on 5 December 2019)

Business Prospects

The company has a large resource base of mines which puts it among the key companies in the world operating in the platinum, rhodium, iridium and palladium metals' arena, and other than that, the company is also one of the lowest-cost producers of gold in the world. The boost from commodity prices, management experience and strategies, and key projects at hand seem to be working in favour of the company.

One of the things that is worth noting about the company is that it has been able to retire all its long-term debts with internal accruals and equity capital raising while a large part of its operations still entails mining and exploration. This may prove to have a significant value in the long run, as per the company.

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