The Eurasia Mining share price slides: here’s what I’d do now

Rupert Hargreaves explains what he would do about the Eurasia Mining share price considering its recent performance and mixed outlook.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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%. 

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. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

2 shares I changed my mind about in today’s stock market

This writer explains why he changed his opinion on these two shares, even though both are highly valued in today's…

Read more »

Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Google office headquarters
Investing Articles

1 reason I like buying S&P 500 shares – and 1 reason I don’t

Will this investor try to improve his potential returns by focusing more on S&P 500 shares instead of British ones?…

Read more »

Young woman holding up three fingers
Investing Articles

3 SIPP mistakes to avoid

Our writer explains a trio of potentially costly errors he tries to avoid making when investing his SIPP, on an…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Here’s how (and why) I’d start buying shares with £25 a week

Our writer uses his investment experience and current approach to explain how he would start buying shares on a limited…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Here’s my 5-step approach to earning passive income of £500 a month

Christopher Ruane explains the handful of steps he uses to target hundreds of pounds in passive income each month.

Read more »

Investing Articles

2 UK shares I’ve been buying this week

From a value perspective, UK shares look attractive. But two in particular have been attracting Stephen Wright’s attention over the…

Read more »

Investing Articles

A lifelong second income for just £10 a week? Here’s how!

With a simple, structured approach to buying blue-chip dividend shares at attractive prices, our writer's building a second income for…

Read more »