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The Eurasia Mining (LSE:EUA) share value has crashed since this time final yr. Immediately after Russia invaded Ukraine, Eurasia’s shares plummeted. And, they haven’t recovered since. In truth, they’re down a large 80% over the interval. That’s unsurprising on condition that the corporate has pursuits in gold, copper and platinum mines within the Ural Mountains and Kola Peninsula in Russia.
All that glitters is just not gold
The firm is dropping cash, which may even have contributed to the decline within the share value. From its formation in 1996, by to 30 June 2022, it accrued losses of £30.5m.
And its latest monetary efficiency was equally poor, regardless of trying higher on the floor.
The firm made a revenue within the six months to June 2022. But this was fully as a result of appreciation of the Russian rouble in opposition to sterling. It restated its rouble-denominated financial objects, leading to a considerable one-off achieve of £6.1m.
This was partly offset by a £1m loss on the revaluation of its inventory of platinum focus.
If these two objects had been eliminated, the loss earlier than tax would have been £1.23m.
| Half-year figures (£ok) | 30.6.21 | 31.12.21 | 30.6.22 |
| Sales | 425 | 1,905 | 102 |
| Gross revenue or (loss) | (239) | (14) | 66 |
| Loss earlier than tax | (1,466) | (1,673) | 3,852 |
Although minimal gross sales income was recorded within the first six months of 2022, the corporate did mine 167kg of PGM (platinum, iridium, palladium and rhodium) focus that it determined to not promote. Due to market volatility, the administrators determined they may promote the product for extra at a later date.
On the plus facet, in December final yr, Eurasia offered an replace on its newest money place. It had money within the financial institution of £4m which — the administrators had been eager to emphasize — was held exterior of Russia. In addition, there was £5.6m of mined product out there on the market. And the corporate has few borrowings or lease liabilities.
Time to purchase?
To be sincere, I’m undecided what to make of Eurasia Mining.
It has mentioned that UK and European sanctions haven’t affected its enterprise, but it stays closely loss-making.
It’s seeking to promote its Russian pursuits however, in the mean time, it doesn’t have another property producing income. A brand new workplace has been established in Japan, though it hasn’t managed to safe any enterprise.
The firm plans to progress inexperienced hydrogen and mining initiatives in different “friendly” nations. But these are at an early stage, and are unlikely to generate income quickly.
It additionally has a coverage to pay 80% of adjusted web earnings in dividends. Yet the corporate doesn’t make a revenue.
Oddly, on 16 May final yr, its shares had been suspended from the Alternative Investment Market pending “an announcement“. The subsequent day a press release was issued advising that there have been “no materials new developments to inform“. On 18 May, buying and selling within the shares re-commenced!
As a risk-averse investor, I’m not snug shopping for shares in Eurasia Mining. Of course, this may be a mistake. The firm at present has a market cap in extra of £100m, so it clearly retains the assist of a lot of traders. But I see this as a surprisingly big valuation for such a small unprofitable mining firm. I don’t suppose it’s the cut price it appears.
