Euro Sun Mine – winning world-class support.
The Euro Sun announced the launch of a C$12 million bought deal public
the offering was underwritten by mining legend Sprott Capital Partners.
For those who don’t know, a “bought deal” is a securities offering
where the underwriter commits to buying the value of
the entire offering from its client!
In other words – it ensured that Euro Sun would raise its intended
amount in full and represented a strong vote of confidence from Sprott.
Sprott’s instincts were vindicated twice over when Euro Sun quickly upsized the placement to C$20 million in response to market demand before eventually raising a total of C$22.3 million.
Among those who took part was long-term investor Ruffer LLP – among the UK’s biggest investment companies, with some $19 billion
of client assets under management.
Having doubled down on its support for Euro Sun, Ruffer today sits as the company’s largest investor with a 9% stake.
Joining Ruffer in the raise was the world-leading asset manager
Franklin Templeton, which took a new 8% position in Euro Sun
through its $331 million Franklin Gold fund.
Meanwhile, ASA Gold and Precious Metals – one of the world’s oldest metals and mining-focused investment management firms –
also entered the fray, taking a 7% position.
With Euro Sun continuing to enjoy support from the likes of BNP Paribas’ Ixios Gold fund (2%) and Hong Kong’s APAC Resources (2%) the institutional presence across its shareholder base is truly remarkable.
After all, these are long-term investors – not only is there an opportunity for them to add to their stakes, but also their involvement and interest places Euro Sun on the radar of yet more professional investors.
Euro Sun is not just winning institutional support either – it’s courting some of the industry’s top management figures.
Peter Vukanavich and Paul Perrow to its board of directors.
Over a 30-year career, Vukanavich sat as president and chief executive of both Genworth Financial Canada/GE Capital Mortgage Insurance Canada and CFF Bank (now Home Bank).
Perrow, meanwhile, was senior vice president, and director of sales and marketing with CI Investments and currently sits on the board of
CI Financial – one of Canada’s largest investment management
firms by assets under management.
Rovina Valley – the Romanian gold project causing a stir. So, what is it about Euro Sun causing such a stir among these gold mining and financial powerhouses?
For starters, with 10.11 million equivalent ounces of gold in the highly prized Measured and Indicated categories, Rovina Valley sits as the second-largest commercial gold resource in Europe.
And that’s not even counting the upside potential at the neighboring Stanija prospecting permit, where sampling has returned grades of up to
25.9 grams per tonne of gold and 0.34% copper.
As if this firm grounding in one of the world’s most stable and supportive mining jurisdictions was not enough, Euro Sun also leads the bulk of its peers to bring
its project into production by 2024!:
Existing infrastructure and labor are already in place thanks to the nearby presence of the historic Barza mine.
Euro Sun became the first-ever non-state-owned firm in Romania to be awarded a mining license thanks to its deep set rooted in sustainable environmental, social, and governmental principles.
The firm has devised a two-phase to Rovina Valley’s development to maximize its net present value and internal rate of return.
Phase I will see the firm bring two pits called Rovina and Colnic into production as open pits. An updated Preliminary Economic Assessment (“PEA”) in 2019
put Colnic’s output at 139,000 ounces of gold equivalent annually for
12 years at an average all-in-sustaining cost of $752 an ounce.
Following this, Euro Sun will bring a third deposit called Ciresata into production as an underground deposit during Phase 2.
Taking all this into account, Euro Sun is highly leveraged against gold prices..
When its PEA for Colnic was completed using a gold price of $1,325/oz, the project’s pre-tax Net Present Value (“NPV5”) came in at $228.1 million.
If we use today’s spot gold price, which has risen by 35% to roughly
$1,808/oz, then this same NPV5 increases by 280% to $634 million!
The road to a re-rate
Despite the increasing world-class interest being generated by Rovina Valley’s huge promise, an enormously persuasive argument for Euro Sun’s undervaluation exists elsewhere.
With a market cap of C$53.2 million, it is presently valued at just C$5.30 an ounce – far below the $20/ounce usually commanded by projects of
such size and advanced status.
After its recent recapitalization through May’s placing, Euro Sun is now in a better position than ever to close this gap – and this could
be just around the corner.
The firm is confident this money will see through the completion of all of the work needed to deliver a bankable feasibility study and win Land and Project Urbanization certificates for Rovina Valley in late 2022/early 2023.
Why is this so critical?
Because Rovina Valley will be construction-ready at this point, and Euro Sun’s focus will shift to winning debt financing and construction permits. Done.
With the support of financiers and the Romanian government on its side,
Euro Sun’s long-term future at Rovina Valley is looking very bright.
As it pushes through these critical near-term project milestones against such a hot gold market backdrop, the inevitable re-rate can only be
prolonged for so long.
