Euro Sun Mining (ESM) - European Copper Going Through the Processes

April 28 2021, 14:58 GMT+01:00

Euro Sun Mining

  • TSX: ESM
  • Shares Outstanding: 171.25M
  • Share price C$0.38 (22.04.2021)
  • Market Cap: C$65M

Euro Sun Mining is a Canadian-based development-stage mining company focused on generating value for its shareholders by advancing its 100%-owned Rovina Valley Project, located in west-central Romania. This property hosts the 2nd largest gold deposit in Europe. In May 2016, the Company strengthened its management team and board of directors with the addition of a technical team with extensive mine development and operations experience in preparation for the advancement of the Rovina Valley Project.

We caught up with Scott Moore, President & CEO of Euro Sun Mining which is a Romania- based Copper-Gold play thinking of listing on the NSE later this year. We talked to them about their EIA process, the DFS numbers that have just come out, and about doing business in Romania and feeding into the European battery metals ecosystem.

Company Overview

Euro Sun Mining is a single mining asset company developing the Rovina Valley Gold and Copper project in Romania and is the 2nd largest Gold mine in Europe. It’s a big, simple mine and holds about 7Moz of Gold and about 1.5Bnlb of Copper says the company. It has 2 open pits and 1 underground. Euro Sun has had success getting the mining licence ratified by the federal government and is now in the final stages of the environmental permitting and rezoning plans, and has just delivered a robust Definitive Feasibility Study on the project on March 1st.Euro Sun Mining (ESM) - European Copper Going Through the Processes

DFS Didn't Excite the Market, Why?

The DFS has been a process of de-risking milestones for Euro Sun Mining. Romania is often viewed as an anti-mining jurisdiction when in fact it’s not says Moore. He claims it is an overhang from a company called Gabriel Resources that tried to build a very similar-sized mine, but used Cyanide and wet tailings, and as it is a UNESCO world heritage site for Roman ruins, they had to move a village.The Euro Sun project is applying a different process, and although the government is approving permits, but it is a bureaucratic process and Euro Sun is continuing checking the boxes as they go forward. Moore suggests that Gabriel Resources is a specific case so no one should draw comparisons to that and Romania is a good jurisdiction for mining. There are lots of mines in Romania, most of which have historically been state-owned because as a communist country up until the 1990s, the state owned everything. 

Forbes & Manhattan as Shareholders - What's Their Influence at Present? 

Euro Sun Mining did a large financing and brought in some very significant institutional shareholders in May 2020, restructured the company, added new board members and a new independent chair. Forbes & Manhattan, Moore's former employer, now don’t have any shares in the company, and Euro Sun Mining is operating without any influence from Forbes & Manhattan.

Environmental Assessment Process & Timeline

Euro Sun Mining recently made an announcement about the environmental assessment process. Part 1 of this process is the urbanisation certificate for the land, a rezoning plan which is left over from the Soviet system. The second part of that process is the strategic environmental assessment, at county level with the local EPA which is basically checking the box, assembling all the studies on the project, and getting sign offs or opinions from local administrative bodies like the police department and the army. There will be a public consultation on the ground in September and they expect to complete the urbanisation certificate for the land in the autumn. Then they will file the EIA process with the state-level government in Bucharest, and once there is a positive decision, they will receive a construction licence within 30-days. The EIA process at the state level is quasi-technical and they need to deliver high-level engineering in order to get the construction licence and this comes from the Feasibility Study, which was just delivered.Euro Sun Mining (ESM) - European Copper Going Through the Processes

DFS Highlights & Impact on Discussions with Financiers 

The European EV market is a big market which is going to continue to grow, and Euro Sun has a near-term project to deliver Copper into the European Union to support the infrastructure, the growth of EVs throughout Europe, and the infrastructure associated with electric vehicles which will need a large amount of Copper. With the Feasibility Study, Euro Sun hope to bring in their second open-pit deposit, which is mostly Copper so they are effectively a Copper company with a small amount of Gold now. 

The main difference between the DFS and the PEA in 2019 is additional mine life with a 17-year mine life versus 12-year from the PEA with a sub $400M Capex. Porphyry systems tend to be $1Bn Capex but with the infrastructure in Romania, the Capex is a lot lower. The mine is 146,000oz a year for the first 10-years, 132,000oz over the life of mine, at an ASIC of 8.13. It’s a big, simple mine that will make a lot of money. They are planning to mine 7Mt a year, with the potential to increase that to 14Mt a year as a project they can build, start, operate, and scale at a later date.Euro Sun Mining (ESM) - European Copper Going Through the Processes

Romania as Jurisdiction & Poor Perception at Market

Romania is part of the EU and it is easy to bring capital into Romania and more importantly, it’s very easy to get money out of Romania, which is much more challenging in some mining jurisdictions. Every major corporation operates in Romania; Microsoft, Oracle, Continental Tyres, Renault, Ford. It is bureaucratic as you would expect coming out of post-communism, but it’s a process and once you go through the process and tick the box, you move to the next step. 

Euro Sun is a power-intensive company as involved in mining and milling, but power is inexpensive as most is generated through Hydroelectric or Nuclear power in Romania so is clean power. They are lowering their Carbon footprint on the project as are conveying materials instead of trucking for the most part. They are dry stacking, no wet tails, with green power, so are ticking all the boxes on ESG to make sure that this project fits into the highest and best standards for environmental stewardship.

The Euro Sun project is a big project on a footprint of over 1,000 acres and will take about 1.5-years to build but It’s moving forward slowly following all Romanian and European Union regulations.Euro Sun Mining (ESM) - European Copper Going Through the Processes

The Catalyst Moment for Euro Sun Mining

Euro Sun Mining has had to deal with people’s perceptions of Forbes & Manhattan, the country itself, the ability to get permits and the ability to get a mining licence. It has been one thing after another for the company.  Moore says they have a strong institutional shareholder base, which is probably now over 50% of their shareholders and envisage they will be well-received by all investors going forward. They are planning to start going through the financing phase and putting financing packages together and have had some interest from French banks, the Germans, private equity funds and credit funds.  

Options for Raising Least-Dilutive Equity

The company has no debt, no streams, no Royalties other than state Royalties, no Gold loans, no prepays, no off-take agreements so they have a lot of optionality in how they fund the project. They are focused on delivering continued news on positive permit progress and the technical side shows that this is a robust project and hope the share price will increase as the equity side is all about the share price.

To find out more, go to the Euro Sun Mining Website. 

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