It is no surprise that Eurasia Mining (LON:EUA) has taken a hammering in recent days. Coming as it does amidst a massive surge in commodity prices and a fall in global share prices. The battery metals producing company is focused solely on Russia, operating in the Kola Peninsula (Monechetundra Project), Ural Mountains (West Kytlim Mine) and the Nittis-Kumuzhya-Travyanaya (NKT) Deposit.
Despite palladium hitting an all-time of $3,440.76/oz earlier this week according to Reuters, we have seen a dramatic fall in the Eurasia Mining share price. At time of writing, Eurasia Mining is trading at 7.5 GBX, down 68% YTD and more than 70% since Eurasia’s private placement of 26.5p per share in May 2021.
No direct impact from sanctions….yet
The Eurasia Mining board is closely monitoring the evolving sanctions, and in a statement last week it reiterated that no individual or entity identified in the sanctions is associated with the company and it quashed claims that Eurasia Mining’s team members (being the largest shareholder group) had sold any shares in the company.The directors – Chairman Christian Schaffalitzky, CEO James Nieuwenhuys and Ian Rawlinson – have also stated that Eurasia Mining has no bank accounts with Russian state-owned banks and has no relationship with any Russian state-owned banks. The current sanctions have not impacted their operations either, they say, although with new sanctions being imposed on Russia on a daily basis, this situation might well change.
In addition, Eurasia Mining stated that production of palladium, platinum, rhodium, iridium and gold from the operating mines “is sold in the domestic market at prices with a market discount to the LME prices fixed in USD, while the costs are mainly fixed in Roubles, whereby a weakening Rouble exchange rate has a positive impact on the bottom line of the company.”
Asset sale still going ahead
Nevertheless, the M&A strategy will still go ahead says Eurasia Mining, as does their move towards hydrogen in what they call Eurasia v 2.0. All subject to current circumstances one would imagine. A potential sale was announced in May 2021 and a buyer (as yet unnamed) has successfully completed due diligence. But with the company splitting the nickel, PGM and hydrogen projects into separate subsidiary companies, the sale details have not been clarified in any more detail.
Eurasia v 2.0
In January this year, as part of their ‘Eurasia Growth Strategy’, the board announced a move to hydrogen and ammonia production. With the support from the Deputy Prime Minister of Russia they signed a joint venture with H4Energy, an engineering and development company specialising in hydrogen and ammonia projects. They also signed an agreement with the State Far East and Arctic Development Corporation (ERDC) to assist with the procurement of land and energy supplies for hydrogen and ammonia projects in Kola and Sakhalin. And in the last few months Eurasia Mining has established an office in Japan with the board appointing non-executive directors Tamerlan Abdikeev and Kotara Kosaka.
Rosgeo partnership shoring up Eurasia Mining
Eurasia has also formed a partnership with Moscow-based Rosgeo, an ESG-focused hydro energy producer. The company believes that this places it “among the majors in terms of combined resources of Eurasia and the projects included in the agreement with Rosgeo.”
It is worth noting that the completion of US$15m financing for the Rosgeo JV took place in September 2021. The JV covers nine projects which together with Monchetundra and Monchetundra Flanks (including NKT, high grade nickel-copper-cobalt and PGM deposit) form a globally significant battery metals and PGM district on the Kola Peninsula.
