The Motley Fool

Eurasia Mining has doubled in February. Will it crash like Sirius Minerals?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

A miner down a mine shaft
Image source: Getty Images.

Do you remember when Sirius Minerals (LSE: SXX) shares doubled in value in just a few weeks back in 2016? I do, and I felt very pleased with myself when I bought some a few months later after they’d crashed back down again.

Something similar has just happened to the Eurasia Mining (LSE: EUA) share price. Well, the doubling part, at least. At market close on Monday, the shares had doubled since their end of January price.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Penny shares?

Before I look closer, I want to air one note of caution. People sometimes point to gains like this as examples of the riches you can make from penny shares. After all, even after the big jump, Eurasia shares are still only priced at 6.7p. But you know what? If Eurasia had only one tenth as many shares in existence at 10 times the price (at 67p), I expect the same would have happened.

And the biggest potential loss from a share is exactly the same whatever the price. It’s 100%.

The latest bullishness is not the first in Eurasia’s history, as my colleague Michael Baxter’s words from December show. Just two months ago, Eurasia was on the up, and Michael was asking whether a great buying opportunity had passed. He thought not and suggested the shares were still good value, and it looks like he’s been proven right. But let’s not forget Sirius just yet!

Eurasia boom

The Eurasia boom seems to be all about rising demand for palladium and platinum. Palladium prices have soared by almost 70% over the past 12 months, with a big spike since the start of 2020. And just like gold, investing in precious and rare metals miners can provide better rewards than buying the metals themselves.

Analysts are getting more bullish too, about both palladium and about Eurasia Mining itself. And there are rumours going round that Eurasia insiders have been buying stock too — but, pinch of salt and all that.

Sirius bust

Back to Sirius Minerals and the question of whether Eurasia Mining could go the same way. Well, there is speculative risk with Eurasia, just as there was with Sirius. Eurasia has been burning cash and recording losses, which is one thing EUA and SXX have in common.

But the big risk for Sirius, which turned out bigger than I’d expected, was that it simply did not have the capital in place to get close to being productive. It was sat on a very desirable asset in its potash reserves, and had a long list of customers lined up. 

But there was never going to be any potash production for a number of years, and it needed huge further investment.

Productive

By contrast, Eurasia Mining has been listed on AIM since 1996 and is in production today. It’s churning out palladium, platinum, gold and other rare metals from its Russian assets. And it’s been suggesting it’s close to further platinum group discoveries. 

So no, I don’t see Eurasia as facing anything like the risks of Sirius Minerals. It’s still speculative, but I think there could be more share price rises to come.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Alan Oscroft owns shares of Sirius Minerals. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.