Shares of Eurasia Mining plc (LON: EUA) are down 14% this year as the mining company remains in discussions with various parties about a potential acquisition offer.
Investors are waiting for confirmation of a tangible offer, which would take the company one step closer to being acquired, which could boost its share price.
The company is a producer of palladium, platinum, rhodium, iridium and gold, currently in high demand across the globe driven by the ongoing global economic recovery as countries ease coronavirus related travel restrictions.
Eurasia Mining recently submitted technical project specifications for its West Kytlim Flanks project in Russia. It expects the project to be approved, given its long-standing operations in the country.
The mining company enjoys significant institutional ownership, which shows that smart money is confident in its prospects. None of the major institutional owners has disposed of their stakes in the company in recent years, indicating that they are waiting for the acquisition offer.
We could see a surge in the miner’s share price once a binding offer is announced, which is expected to be at a premium to its current share price. Otherwise, it would not make sense.
Eurasia Mining shares are trading near a support/resistance level, and investors looking to buy shares may find this a great location for new positions.
However, nothing is guaranteed in the markets, and we could see the shares fall, invalidating the above trade idea.
Eurasia Mining share price.
Eurasia Mining shares fell 4.6% today, bringing their total losses this year to 14.5%, ahead of a potential merger.
Should you invest in Eurasia Mining shares? Eurasia Mining shares are traded on the AIM market of the London stock exchange (the alternative investment market) which is the sub market specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Eurasia Mining shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies