The Eurasia Mining (LSE: EUA) share price has moved lower in early deals this morning after the company issued an update on its partnership with Rosgeo.
Today’s share price action has not been particularly significant. However, over the past few months, the stock price has crashed. Since the beginning of the year, shares in the company have fallen 47%, and over the past year, the stock is off at 34%.
After reaching an all-time high of just over 40p at the beginning of December last year, shares in the mining group have now fallen by more than 60%.
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Uncertainty prevails
It seems to me as if investors have been selling the Eurasia Mining share price due to uncertainty.
The company’s flagship West Kytlim project is moving along nicely, but it remains unclear what the ultimate outcome for the project will be.
Last year, the group put itself up for sale, which boosted interest in Eurasia. As investors speculated on how much the company could be worth, the stock spiked.
After a delayed formal sale process, the company announced that it had exited the process in May.
The company said it had received a wide range of offers for its assets. However, rather than selling immediately, it was going to focus on its joint venture with Rosgeo.
Under the joint venture terms, Eurasia will gain a 75% equity stake in nine PGM and battery metals assets. One of these assets is the Nyud project. Today the company informed the market that recent drilling on this asset has recently been completed, and further information will be available soon.
Behind the scenes, the company is still negotiating strategic options with its advisors. So, an offer for the business could eventually emerge.
How much is Eurasia Mining worth?
Still, at this point, it is impossible to say how much, if anything, the business will be worth to a strategic buyer. I think this is why investors have found the low Eurasia Mining share price unappealing recently. Now that the company has exited the formal sale process, it does not look as if the business will receive an offer anytime soon. In the meantime, its joint venture in Russia is unlikely to yield any substantial results. Most of the assets are still in their early stages of development, and there is no guarantee any of the assets will ever become possible mines.
All of this means the outlook for the Eurasia Mining share price is shrouded in uncertainty. An offer could emerge, or it may not. The company may strike it rich with one of its joint venture assets, or it may not. It may have enough funding to pursue all of its ambitions, or it could quickly run out of money.
The challenge is trying to identify what happens next. I think that is just too difficult. As such, I would avoid the stock, and if I already owned shares in the company, I would be looking to sell them as soon as possible. I think there are plenty of other stocks on the market with a much more predictable outlook.
