Eurasia Mining Shares Rally on Potential Asset Sale News

Summary

  • Eurasia Mining shares moved up by 12 per cent today, reacting to an announcement of a potential asset sale to a credible party.
  • In case the deal is through, it would allow the gold and metals miner to pay a significant dividend to all its shareholders.

The shares of Eurasia Mining Plc (LON: EUA) jumped 12 per cent on Thursday, reacting to its previous day announcement that it received a proposal to substantially acquire all its assets. Announcing the asset sale, Christian Schaffalitzky, the executive chairman of Eurasia Mining, said that the firm was glad to have received a proposal from a credible party.

It would allow the gold and metals miner to pay a significant dividend to all its shareholders, he added. But there is no guarantee of any dividend as yet as the deal appears to be in its early stages right now, said market experts.

The mining company also informed that it had finished its strategic review and has concluded the formalities of the sale process.

The company’s shares (market capitalisation: £689.68 million) have reacted positively to the announcement. They were trading at GBX 28.00 per share at 12.58 AM on 13 May, up 12.00 per cent from its previous day’s close.

Also Read: 5 Hot FTSE Dividend Stocks to Watch in May

                                                

                                            

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Sale process

The formal sale process was launched in latter part of last year in the month of July. Since then, the metal producer had received non-binding offers for a takeover as well as for alternate transaction structures.

The company further informed that after getting an offer from a reliable party for the possible acquisition of substantially all of its assets, the company board has zeroed in on this asset sale. However, it stressed that the terms of the transaction would be available only once it gets finally concluded. In fact, the Eurasia update also stressed that until a transaction was officially finalised, there could be no surety that it would take place.

Market analysts pointed out that while the company was up for sale for close to a year, the coronavirus pandemic had delayed a real transaction, but it came as good news that the company was actually nearing a formal deal.

Also Read: 3 FTSE 100 Metals and Mining Stocks to Watch Amid Surge in Metal Prices

JV with Rosgeo

Recently, the company had also finalised a joint venture (JV) with Rosgeo, in which Eurasia would receive a three-fourth stake in nine platinum group metals (PGMs) and battery metals assets, totalling up to 104.6 million ounces of platinum equivalent in reserves. This would expand the company’s presence as a PGM and battery metals producer across the world.

Also Read: Mining Shares Lifted FTSE 100 Above 7,000 Level; CAC 40 up 1.40%

West Kytlim project

The miner had also informed that its technical project for the flagship West Kytlim site was now formally approved. With this, there will be three plants under operation this year itself, diversifying its revenue stream.


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