Euro Sun Mining has already had an eventful (in part unsuccessful) history. But I believe that the chances of a happy ending and a potential tenbagger have never been as good as they are today... 📈
Who or what is Euro Sun Mining?
Euro Sun Mining is a Canadian listed mining development company focused on the development of the Rovina Valley project in Romania. The focus here is on the mining of copper and gold.
The company has actually been trying to get this project up and running for years... so far unsuccessfully. This was partly due to local opposition over concerns about environmental impact and the resulting revocation of an environmental permit that had already been granted.
...and what has changed? 🤔
You have to thank the EU here. Caused by the war in Ukraine and the dependence on China, the decision was made to promote the extraction of strategically important raw materials. To this end, the Critical Raw Materials Act ("CRMA") was brought into being.
Essentially, it is intended to help optimize the approval process for these strategic projects and subsequently speed up the process. It should only take 12 to a maximum of 24 months from application to full approval.
... and of course the Rovina Valley project was classified by Euro Sun Mining as a strategically important project, otherwise this post would have been superfluous! 😉
The latest news about Euro Sun Mining 🔎
There were three important news items last Friday...
👉🏻 The CRMA has been incorporated into Romanian national law:
With the transposition into national law, Euro Sun Mining can now officially apply under the terms of the CRMA and benefit from the shortened authorization procedures, which should happen in the coming days...
👉🏻 The Environmental Impact Assessment (EIA) has been completed:
After failing two years ago, the (new) management has made improvements. In close consultation with the Romanian authorities, the shortcomings have been addressed and (hopefully) rectified. Once the report has been completed, the above-mentioned application can be submitted.
👉🏻 Appointment of Cantor Fitzgerald as financial advisor:
The focus here is on "valuating potential strategic transactions involving the Company or its assets, including mergers, acquisitions, or sales"... is a merger / sale possibly being prepared here?
My final assessment 📊
To cut a long story short, Euro Sun Mining is a bet I'm making. I am currently already invested with an initial 15 thousand euros and am considering topping up again tomorrow.
The arguments in favor of Euro Sun Mining are
- Confirmed NPV according to definitive feasibility study ("DFS") at a gold price of $3,300 dollars of 1.8 bn dollars.
- Closed off-take agreement (financing commitment) of 600 million to realize the project.
Tailwind through CRMA- High insider purchases and partnerships (e.g. Cantor Fitzgerald) indicate optimism among insiders
Speaking against Euro Sun Mining:
- High risk with regard to granting of permits. Even if the CRMA and general geopolitical developments promise a tailwind... it is not a guarantee. And everything stands and falls with the approval
- Implementation risk. Even if all permits have been granted, the mine must first be built. Although the financing is in place, the construction of a mine is complex and often involves cost overruns and delays.
👉🏻 Overall, however, the risk/reward ratio outweighs the reward for me. The current market capitalization is currently 90 million. In the best-case scenario, the share could increase twentyfold based on the (conservative NPV).
It remains a high-risk/high-return play. Over the next few weeks, further news releases should provide excitement. The biggest uncertainty factor at the moment remains the environmental permit. If this is granted, it will mean massive derisking, but then the share will no longer be available at 15 cents... 😉
$ESM (+0,55%)
$DE000EWG0LD1 (+0,22%)
Best wishes and good business!
