Eurasia Mining Share Forecast October 2021 – Time to Buy EUA?

Shares of the global mineral and mining exploration company Eurasia Mining PLC (LSE: EUA) are in the red today, after closing at 25.00p on September 30th (17:58 GMT+1). After the sharp decline in the share price recently, EUA seems to be in a moderately stable status as of now. Nonetheless, Eurasia shares have reflected a major surge in the last month – nearly doubling the value within the first week. Experts are concluding that the share prices are on the upward trail due to the recent Monchetundra project, but does it make EUA a lucrative investment? Let’s figure out what’s happening here.

Eurasia Mining – Technical Analysis

According to the financial statement from Eurasia Mining, the market cap of the mineral exploration company is at £727.658M with total assets worth £10.73M. Whereas the total revenue for 2020 was £937.96K, it was at £1.13M a year ago.

Moving averages for EUA such as Exponential Moving Average (10)(25.49), Exponential Moving Average (20)(25.59), Simple Moving Average (20)(28.49), and Exponential Moving Average (30)(25.06) are pointing towards selling. Oscillators, on the other hand, such as Relative Strength Index (14)(49.37), Stochastic %K (14, 3, 3)(29.09), Commodity Channel Index (20)(−54.67), and Average Directional Index (14)(22.01) are neutral.

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Recent Developments

The administration recently released the pre-announced mining plan for two sites among nine within the Monchetundra project and it has clearly influenced the rapid surge in the EUA share price. Coming to the details of the project, the facility covers nine battery metal mines that include platinum, nickel, palladium, to name a few. It is quite evident why the expectations of the investors are likely escalating, given the fact that Eurasia presently holds a 75% equity stake where multiple sites have passed a pre-feasibility study.

The project seems to gain quite momentum with Rosgeo retaining 25% of the stake and covering the expenses of the preparatory drilling. Apart from that the company also hired a mining consultancy firm named Wardell Armstrong to look over the audit reports and take charge of the quality control measures. Moreover, Eurasia has successfully managed to raise about £11.15 to aid the funds allotted for the ongoing Rosgeo JV mining project.

In late September, about 41.5 million shares (at 26p per share) are sold to institutional investors, according to recent reports from the mining business. Additionally, the company also disclosed to grant these investors to acquire another 41.5 million shares at the same price within the following 3 years – after selling new equity warrants. This undoubtedly raised the company’s cash position significantly – from £14.88m to £26.03m, to be precise.

Should You Buy Eurasia Mining Shares?

Despite the promising leverage potential of the Monchetundra project, it is still somewhat early to predict the results since the project is yet to reach its production stage. Depending on the pace of the progress in the project development, it is safe to assume that Monchetundra might take another 2 years to produce any sort of extraction. Here, investors should also keep the factor in mind that even if the project seems potential in the coming years, there are no assurance of the battery metal prices to be as elevated as today’s time.

When coming to the market demand for cobalt and palladium, it is not quite likely to be faded soon. However, with the rising mining companies, it is possible to notice a decline in the battery metal prices when the supply will be surplus in the future. Having said that, despite the growth prospect of the share in the coming years, in my opinion, it is better to be speculative and keep the share on the watchlist as of now.

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