Eurasia Mining (EUA) shares have soared. Is this penny stock next?

Eurasia Mining plc (LON:EUA) shares have quickly doubled in value. Paul Summers thinks the same could happen to another penny stock.

| More on:

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.

British Pennies on a Pound Note

Image source: Getty Images

Investors have clamoured for Eurasia Mining (LSE: EUA) shares over the last week. In fact, the penny stock was recently the most popular pick among Hargreaves Lansdown clients. That’s right — this AIM-listed resource play was more in demand than FTSE 100 members such as IAG and Lloyds Bank.

All this has helped the Eurasia Mining shares more than double in value since 27 August. That leaves it with a market capitalisation of over £1bn. My Foolish colleague Roland Head noted at the start of the month that investors are keen to get exposure to the Russia-focused miner. This is due to its focus on extracting palladium, platinum, rhodium, and iridium. These should all be in huge demand going forward. 

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Today however, I’m highlighting another penny stock that could be about to spring violently to life. 

Is this penny stock next to pop?

Would-be producer Horizonte Minerals (LSE: HZM) is a share I’ve owned for five long years. Partly due to the electric vehicle revolution, it’s my play on what’s set to be a booming nickel market.

The AIM-listed company owns two Tier-1 projects, Araguaia and Vermelho, in Brazil. Right now, it’s the former that’s really in focus. News of how Aragiua will be financed into production is due by the end of Q3. It could be the catalyst for some serious share price action.

At least that’s what I’m hoping. Mining companies aren’t known for their willingness/ability to stick to deadlines. If there’s a delay, HZM shares could experience some sharp selling pressure as short-term traders head for the exits.

Even if the news arrives, it’s a question as to whether the terms of that financing are beneficial for existing owners like me. They might not be. Covid-19 could also impact construction at Araguaia on top of this. 

Horizonte vs EUA

A positive to owning Eurasia Mining shares over Horizonte’s are that the company already has one project in production. Obviously, HZM won’t be ready to deliver the goods for a while yet. 

The company’s mergers and acquisitions officer Dmitry Suschova owns a big portion of EUA. That’s another thing I like. This is through a direct holding and a controlling interest in Deloan Investments Limited. This should mean his interests are aligned with those of private investors. By sharp contrast, managerial ownership of Horizonte’s stock leaves a lot to be desired.

Then again, the latter’s shareholder register is hardly shabby. Teck Resources — Canada’s largest diversified miner — owns a little over 12% of the company. London-listed Glencore owns another 5.2% of HZM’s stock. There are worse bedfellows to have! 

At £130m, Horizonte’s market-cap also feels far more palatable. For perspective, EUA is now eligible for inclusion in the FTSE 250 index. That’s if it were to list on the main market, of course. Does this make sense? I’m not sure it does. The company barely makes any revenue and generates zero profit. It could also be forced to tap investors for more cash going forward.

Staying diversified

I’m keeping my fingers crossed that HZM is able to replicate some of the recent performance seen in Eurasia Mining shares. A near-24% rise in the last month bodes well.

Nevertheless, I’m not getting ahead of myself. As always, I’ll be ensuring that the rest of my portfolio is diversified into other sectors, just in case.

Our 5 Top Shares for the New “Green Industrial Revolution"

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special "Green Industrial Revolution" presentation now

Paul Summers owns shares in Horizonte Minerals. The Motley Fool UK has recommended Hargreaves Lansdown and Lloyds Banking Group. 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.

More on Investing Articles

Thoughtful anxious asian business woman looking away thinking solving problem
Investing Articles

3 UK shares to buy in a stock market crash

Inflation and rising interest rates have our author on the lookout for a stock market crash. Here’s what he’s looking…

Read more »

Futuristic front of NIO car in Norwegian showroom
Investing Articles

Down over 50%, is NIO stock the best EV pick right now?

NIO stock has dipped over 50% in the past year. Does this create the perfect opportunity to buy or are…

Read more »

Buffett at the BRK AGM
Investing Articles

3 Warren Buffett techniques to build my wealth

Our writer shares a trio of Warren Buffett investing habits he hopes can help him build his own wealth.

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

Aviva shares are in demand. Should I buy too?

Hargreaves Lansdown investors were piling into Aviva shares last week. This Fool is asking whether he should join the queue.

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

3 reasons why I think the IAG share price could rally this year

Jon Smith writes about how improving risk sentiment could help the IAG share price this year, but not without risks…

Read more »

Passive and Active: text from letters of the wooden alphabet on a green chalk board
Investing Articles

A passive income stock I’ve bought to supercharge my wealth!

I think this UK dividend stock is one of the best to buy for healthy long-term passive income. Here's why…

Read more »

British Pennies on a Pound Note
Investing Articles

3 hot penny stocks I’m buying in June!

With their exciting growth potential, penny stocks can be great investments. I've found three to buy next month based on…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

2 green dividend shares I’d buy with £500

Jon Smith explains two dividend shares with a focus on renewable energy that have caught his eye at the moment.

Read more »