Amur Minerals

LN: AMC

£12.9m market cap

1.8p last close

Amur Minerals is an exploration and development company focused on base metal projects in Russia’s Far East. The company’s principal asset is the Kun-Manie nickel sulphide deposit in the Amur Oblast, comprising over a million tonnes of contained nickel.

Investment summary

Amur’s updated pre-feasibility study (PFS) on the toll smelt option at Kun-Manie calculated an NPV of US$614.5m and an IRR of 29.3% at a nickel price of US$8.00/lb (US$17,640/t). Its updated PFS on the low grade matte option calculated an NPV of US$987.4m and an IRR of 34.7%. Initial capex is estimated at US$570.4m and US$695.0m, respectively and C1 cash costs at US$3.87/lb and US$2.34/lb, putting both in the second lowest cost quartile globally.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 0.0 (1.9) (1.9) (0.3) N/A N/A
2018A 0.0 (2.2) (3.4) (0.5) N/A N/A
2019E 0.0 (3.8) (3.9) (0.6) N/A N/A
2020E N/A N/A N/A N/A N/A N/A
Last updated on 25/07/2019
Industry outlook

Amur’s published NPVs imply a prima facie valuation for the company of US$60.8m (or 8.7c per share) for the toll smelt option and US$97.8m (or 14.0c per share) for the low grade matte option. However, given their relatively high project IRRs, these could increase to as much as US$79.9m (or 11.4c per share) and US$157.0m (or 22.5c per share), respectively – which compare with discounted dividend valuations (fully diluted at a share price of 2.61p) of 8c and 12c, based on a US$7.17/lb nickel price. NB All NPVs calculated at a 10% discount rate.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 1.1
Forecast gearing ratio (%) 4
Price performance
%
1m
3m
12m
Actual (26.5) (37.4) (54.7)
Relative* (27.4) (37.7) (53.5)
52-week high/low 4.5p/1.8p
*% relative to local index
Key management
Robert Schafer Chairman
Robin J Young CEO

Content on Amur Minerals