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Eco Atlantic Oil & Gas, Safestay and Eurasia Mining

13:23, 28th October 2019

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On today's Vox Markets Podcast: Eco Atlantic Oil & Gas, Safestay and Eurasia Mining

Gil Holzman, Co‐Founder and Chief Executive Officer for Eco Atlantic Oil & Gas (ECO) FOLLOW provides an operational update following its two recent oil discoveries, offshore Guyana.

Eco Atlantic is a TSX-V and AIM quoted Oil & Gas exploration and production Company with interests in Guyana and Namibia, where significant oil discoveries have been made. The Group aims to deliver material value for its stakeholders through oil exploration, appraisal and development activities in stable emerging markets, in partnership with major oil companies, including Tullow, Total and Azinam.


Nuno Sacramento, Chief Operating Officer of Safestay (SSTY) FOLLOW discusses their 17th hostel acquisition, a prime boutique hostel located in Athens.

Safestay has quickly become a leading player in the premium hostels market. And we have exciting expansion plans into key European gateway cities in 2019.

(Interview starts at 11 minutes 48 seconds)


Alexei Churakov, Strategic Advisor to the Board Of Eurasia Mining (EUA) FOLLOW discusses their recent news and plans going forward.

Eurasia Mining is a long-established palladium, platinum, iridium, rhodium and gold focused production company quoted on the London Stock Exchange AIM market, with an operating PGM mine in the Ural Mountains palladium open pit deposit at Monchetundra. In addition, Eurasia maintain an interest in the Semonovsky Gold in Mine Tailings Project, an asset demonstrating potentially low-cost new-term gold production potential.

(Interview starts at 23 minutes 55 seconds)

 

Below is a transcript of the interview:

 

VOX: Alexei, could you please introduce yourself?

AC: Currently, I am a strategic advisor to the board of Eurasia and my main experience is coming from Goldman Sachs and Morgan Stanley, where I have been involved in a number of M&A deals selling Russian mining companies to investors from all over the world.

 

VOX: Why have you chosen CITIC and VTB to work with Eurasia?

AC: CITIC and VTB Capital are the largest investment banks in China and Russia, respectively, and they have the biggest investor reach, not only in China and Russia, but also in the rest of the world, when it comes to marketing Russian mining companies.

 

VOX: Who are Eurasia’s contacts with CITIC and VTB?

AC: In CITIC, we are sponsored on the very top level by the Chairman of CITIC Merchant, the investment and merchant banking arm of CITIC, as well as by his advisor, who used to be the CEO of Gazprombank, Asia Pacific. In VTB, we are supported by the top people as well, whom we worked on multiple transactions previously. Both banks are the best you can possibly get to market and sell Russian mining companies.

 

VOX: I know you cannot mention the names, but are you in talks with just one or several strategic investors now?

AC: It has been always my habit to talk to multiple strategic investors to make sure a good deal can be negotiated. This is one of the key lessons I learnt very well working for bulge bracket investment banks selling Russian companies.

 

VOX: At MT/Kola project you have upgraded your potential resources from 2moz to 15moz of palladium including the flanks. What does it mean for Eurasia?

AC: It means that our value potential has been upgraded to a completely different league of major palladium companies. And we believe that 15 million ounces of palladium is just the beginning. We are looking at several other licenses at Kola with over 40 million ounces of palladium in total. Having said that, already with up to 15 million ounces of palladium we are an extremely attractive to large strategic investors.

 

VOX: Yes. We have seen recent palladium acquisitions namely Stillwater for almost US$2 bn by Sibanye in 2017 and North American Palladium for approximately CAD$1 bn by Impala Platinum earlier this month. Are you benchmarking your valuation against these deals?

AC: Yes. And also you should not forget Kevitsa project sold for over 700 million US dollars in cash and Sukhanko project sold for a significant cash consideration and an additional 2% net smelter royalty over the life of a the entire project. And mind you, Sukhanko is far behind our MT/Kola in their development schedule. You can find more details on these projects in the Optiva’s research on Eurasia of last year. These two projects are just several hours drive from our MT/Kola mines.

 

VOX: Right. And how do you value your projects taking into account all these deals happening in the PGM space?

AC: We are benchmarking ourselves against these deals in the first instance. You can also refer to the same Optiva’s research on Eurasia, where on the basis of our feasibility study, the NPV was stated at over 240 million US dollars. And mind you, this research was done at the palladium price around 1,000 US dollars per ounce. Now the palladium price is over 1,700 US dollars per ounce. That’s big change for us because the whole price increase of 700 US dollars per ounce goes straight to our profits. Thus, the NPV goes up not by 70%, but much higher.

 

VOX: What would you say about the share price more than doubling yesterday from 0.48p to over 1p?

AC: This is just the beginning. Smart investors can benchmark our NPV and the recent deals in the PGM space to our enlarged resources of up to 15 million ounces of palladium.

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