Needless to say, that’s a fairly extraordinary level of growth, especially since the stock was suspended from being publicly traded for nearly six months. What happened? And should I be considering this stock for my portfolio? 

The rise of the EUA share price

EUA is a mining company that focuses on extracting various metals, including palladium, platinum and iridium. While it has multiple sites in its portfolio, the company is still very much in its infancy. And so the total revenue generation is quite limited. For example, in 2019, it only generated £1.13m in revenue. And that was before the pandemic began disrupting the industry.

So why has the share price started surging? Following a request for more information regarding its relationship with the Chinese investment bank CITIC, the shares of EUA were suspended at 7.2p. After a few months, this relationship was clarified. And in July, the shares began trading again at a price of 12.8p that continued to climb throughout the rest of 2020.

It turns out the company is looking to sell itself. And CITIC and UBS are helping to make that a reality. Since the total value of the resources at its existing mining operations is estimated to be around £1.5bn, the prospect of a sale sent the EUA share price flying.

Taking a step back

The idea of receiving a £1.5bn payday certainly sounds enticing, especially since the current market capitalisation is around £760m. However, there is limited information currently available surrounding this deal. What’s more, it may never happen.

In January 2021, the management team provided an update on the progress (or lack thereof) being made regarding the potential sale of the business’s assets. Despite being approached by “a wide range of parties”, no binding deals have been signed. And given the industry is still in the process of recovering from the disruptions of the pandemic, it could be some time before any formal offer is made.

The bottom line

To me, it looks like the EUA share price is being propped up by the prospect of a future sale, the value of which remains unknown. Should this fail to materialise, the share price could begin to decline rapidly over the short term.

However, the company’s lead asset — the West Kytlim platinum mine — is now fully operational. In addition, its new flagship project — Monchetundra — is set to become a world-class open-pit palladium mine. In my eyes, it looks like the underlying business is performing well. Combining this excellent progress with the rising demand for these metals for use in electric vehicles and renewable energy infrastructure, EUA does sound like a promising mining company.

However, the valuation of the stock is simply too high for my tastes. And so, the firm is staying on my watch list for now.

The post The EUA share price increased 600% in 2020. Should I buy now? appeared first on The Twelfth Magpie.

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Zaven Boyrazian does not own shares in Eurasia Mining. 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.

Insurer edges skywards

Insurance giant Beazley (LSE: BEZ) has seen its shares move 1.7% higher in Thursday trading following the release of positive trading results for 2015.

The London firm advised that gross written premiums advanced 3% last year, to $2.08bn, a result that nudged pre-tax profit 8% higher to $284m. The company had a “benign claims environment” to thank for the solid performance, it said.

But looking ahead, chief executive Andrew Horton told Reuters that “the rating environment across catastrophe-exposed business, due to a lack of claims in 2015 and 2014, means that rates are going to continue to go down.” He added that “margins will be under pressure this year.”

With Beazley also suffering from intensifying competition, the City expects earnings to tank 13% in 2016, leaving the business dealing on a P/E rating of 15.1 times. This number is far from shocking, but considering that earnings risks continue to rise, I believe the insurer is an unappealing pick at the present time.

Copper play pleases investors

Copper digger Xtract Resources (LSE: XTR) has gone gangbusters in Thursday’s session following positive operating news — the stock was last dealing 7.5% higher from the prior close.

Xtract Resources advised that the processing plant at its Chepica gold and copper facility in Chile had been granted permission to restart on Friday. The plant has been down since late December following two fatalities at the site.

The mining play advised earlier this week that revenues slipped 16% between October and December from the prior quarter, to $375,802, although the impact of cost-saving measures propelled profits 39% higher to $208,269. Still, the bottom-line result missed expectations, and I reckon Xtract Resources should continue to be hit by falling ore grades and weak copper prices.

The number crunchers expect the Chilean digger to report earnings of 0.02p per share in 2016, resulting in an ultra-low P/E rating of 9 times. But given the poorly state of the copper market, I believe investors expecting sustained earnings rises could end up disappointed.

Stuck in a hole

Shares in embattled mining play Lonmin (LSE: LMI) have also exploded higher in Thursday trade due to a solid bump in metal prices.

Thanks to fresh US dollar weakness, platinum was recently at week-long peaks above $880 per ounce, while sister metal palladium burst back above the critical $500 marker. This renewed strength pushed Lonmin’s share price 15% higher from Thursday’s close.

However, I reckon this near-term strength represents nothing more than a fresh selling opportunity. Lonmin advised last week that it expects “a low pricing environment will persist in the short to medium term,” and subsequent restructuring has seen the business cut more than 5,000 jobs in the past quarter alone.

But as demand indicators continue to worsen, and wider economic conditions propel the dollar steadily higher in the coming weeks and months, I reckon Lonmin’s share price should resume its crushing downtrend.

The post Should You Pick Up Lonmin Plc, Beazley PLC & Xtract Resources PLC On Thursday? appeared first on The Twelfth Magpie.

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• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
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• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Beazley. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Metals play gets mashed

It comes as little surprise that platinum group metal (or PGM) producer Lonmin (LSE: LMI) suffered another heavy headache last week as commodity prices extended their downtrend. The business saw its share value haemorrhage an extra 27% between last Monday and Friday, and I see no immediate levers that could bring Lonmin’s eye-watering collapse to a halt.

Fresh fears over the state of the Chinese economy recently forced palladium below the critical $500 per ounce marker for the first time for five-and-a-half years last week, at around $486 per ounce. And sister metal platinum remains a whisker away from hitting levels not seen since December 2008 — it was last dealing at $860 per ounce.

As well as battling the prospect of further revenues weakness, Lonmin also has to deal with worsening currency movements — the South African rand sank to fresh record lows versus the US dollar just today — as well as the problem of escalating operating costs.

While Lonmin’s decision to raise cash via a $400m placing in November buys the company some much-needed time, until metal prices begin to charge higher again I believe the digger remains a risk too far at the present time.

A brilliant banking pick

Banking colossus Lloyds (LSE: LLOY) was also one of the notable casualties of last week’s sell-off across the FTSE, although the business shed a more modest 6% between last Monday and Friday. The stock is no stranger to severe price weakness, however, with Lloyds shedding more than a fifth of its share value since 2015’s highs of 89p back in May.

I have long considered Lloyds to be a terrific selection for bargain hunters, however, and last week’s collapse to two-and-a-half-year lows represents a fresh buying opportunity in my opinion.

Concerns over hulking PPI-related bills are likely to remain a concern at Lloyds for some time to come — the bank has proved the biggest culprit in when it comes to mis-selling products to the public, and was forced to stash a further £500m away in provisions between July and September, taking the total to a whopping £13.9bn.

But I believe there are plenty of other reasons to excite investors, with the steadily-improving UK economy helping to power revenue growth at its High Street operations. Meanwhile, the roaring success of Lloyds’ Simplification cost-cutting exercise, not to mention its continuing asset-shedding programme, is also helping to undergird earnings growth.

Although Lloyds is expected to suffer an 8% earnings slide in 2016, the bank still changes hands on an ultra-low P/E rating of 9.6 times. Any reading around or below 10 times is widely considered too good to pass up.

And with the business expected to raise a projected 2.4p-per-share dividend for 2015 to 3.7p in the current period — a figure that creates a market-busting 5.1% yield — I believe Lloyds is one of the of the most attractive banking stocks on the market.

The post Should Bargain Hunters Buy Last Week’s Losers Lloyds Banking Group PLC & Lonmin Plc? appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.