Amur Minerals

LN: AMC

£17.9m market cap

2.14p 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 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). For the low grade matte option, it 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
Industry outlook

Amur’s published NPVs imply a valuation for the company of US$60.8m (or 8.7c per share) for the toll smelt option and US$97.8m (or 14.0cps) for the low grade matte option. However, given their relatively high project IRRs, these could increase to 11.4cps and 22.5cps, respectively. These compare with (fully diluted) discounted dividend valuations of 8c and 12c (at US$7.17/lb Ni). The board appointment of Tom Bowens demonstrates Amur’s intention to progress the project rapidly. In the meantime, it has commenced both Russian and western feasibility studies.

Last updated on 14/11/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 1.1
Forecast gearing ratio (%) 4
Price performance
%
1m
3m
12m
Actual 15.1 27.5 (39.2)
Relative* 13.8 23.8 (41.6)
52-week high/low 4.0p/1.7p
*% relative to local index
Key management
Robert Schafer Chairman
Robin J Young CEO

Content on Amur Minerals