Eurasia Mining Share Price – Is This a Good Time to Buy?

Are you interested in investing in Eurasia Mining [UEA] stock? If so, read on for some crucial information. We’ll cover the company’s financial position, its M&A strategy and consider one of our preferred metrics for a company that has yet to produce a profit. Plus, find out whether it’s a good time to buy or sell. The following are some of the factors that DIY-Investors should consider before buying Eurasia Mining stock.

So, how is Eurasia Mining faring? We’ll answer these questions and more in this article.

Eurasia Mining’s financial position

Following the recent announcement of its financial results, on 29th June 2022, Eurasia Mining PLC reiterated its intention to sell its Russian projects. The company continued to pursue the sale of its assets and reiterated that the sanctions against Russia have had no impact on its operations. However, the company’s loss for the year of 2021 was slightly higher than the loss it reported for the year before. In addition to these, the company said that it is considering the sale of certain assets, such as the Kamushnovsky Uranium Project in Kyrgyzstan.

The company is not currently seeking to raise new capital, but the net proceeds of the (2021) Private Placement are intended to be used to fund the company’s planned joint venture with Rosgeo. This joint venture includes Moroshkovoe, Nyud, and other major open pit deposits. Despite this, the company currently has (at 29th June 2022) no debt and has invested in the Monchetundra and West Kytlim projects.

Its M&A Strategy

The company announced its intention to diversify its operations into hydrogen and ammonia production, establishing a Japan office and appointing Tamerlan Abdikeev as director. This new business sector complements the company’s PGM business in Russia, resulting in a complementary parallel strategy. Eurasia Mining has also announced the appointment of Tamerlan Abdikeev as non-executive director.

The company said its fundamentals are unchanged, but it continues to monitor sanctions that Western nations imposed on Russia for its invasion and military attack on Ukraine. While this move could affect Eurasia’s M&A strategy, it is unlikely to have a material impact on its business as far as we can tell from publicly available information. Is it still a good time to buy shares of Eurasia Mining? That depends on an individual investor’s strategy and perception of the relative rankings of the company’s key metrics, technical analysis and news-flow.

Eurasia Mining – Going Concern (Annual report – released 29th June 2022)

2022 events and sanctions compliance
The Company has satisfied itself that neither of its current activities at the West Kytlim Mine or on the Kola
Peninsula are prohibited under UK or EU sanctions rules. Furthermore, the Group does not engage and has not
engaged with any sanctioned persons/ entities or agencies.

The Company continues to progress discussions with regard to the potential sale of its assets, appointing KPMG
Russia as agent in May 2022, and has set aside sufficient funds to complete and submit a Definitive Feasibility
Study for the Monchetundra project in November 2022.

All of the Group’s net current assets as mentioned above are held in ‘A’ rated banks in GBP accounts outside of
the Russian Federation. The Company has continued to fund Group companies as required through the first part
of 2022 and in compliance with applicable regulation.

The Company is active in considering new business development outside Russia, including a potential transition
to the hydrogen and ammonia market as described in the Strategic Report herewith. The Group has also diversified
geographically in the year being reported, by opening a representative office in Japan, and with the appointment
of two Directors working from the Japanese office.

The Directors have concluded that the combination of these factors, including the level of the Company’s current
cash balances (the substantial majority of which is held within the international banking system outside Russia),
and taking account of the current applicable sanctions regime, support the Board’s opinion that it has a reasonable
expectation that the Group has adequate resources to continue in operational existence for the foreseeable future,
which management has determined to be at least 12 months from the signing of this Annual Report to the
conclusion of the 2023 financial year. For these reasons, the Board believes it is appropriate to adopt the going
concern basis in preparing the Annual Report and Accounts.

 

Price-to-sales Ratio (PSR)

This is one of our preferred Key Metrics, for loss making companies, where there are no earnings to consider. Observing the “Sharescope” Key Metrics (below), you can see that the PSR(f) is 64.94

So, what does that mean? It means that at the current share price, it would take many years to recover your share price in terms of sales. Even looking at the forecast turnover (sales) of £9.303m, this would suggest a PSR(f) of 16.56 (i.e. 16.5 years to make sales equivalent to the current share price). Of course you could also compare Eurasia Mining to its peer group, using PSR, as we’ll be doing shortly. For now, EUA remains on our watch list!

Please Note: This post is for educational purposes only and is not a recommendation to buy or sell any share (or other investment vehicle). Do your own research (DYOR) before buying or selling any share or other investment and make up your own mind accordingly or seek appropriate professional financial advice.

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Mick (15th July 2022)