The spotlight was placed on Uzbekistan’s Navoi Mining and Metallurgical Company (NMMC), a state-owned enterprise poised to go public in 2025. Cody Shirk, a private investment advisor, shared insights on the investment potential in Uzbekistan, focusing on its abundant natural resources, particularly gold, copper, and uranium, and highlighting Navoi’s dominant role in the global metals market.
Uzbekistan wants to IPO the world's largest goldmine in... the US!
— Cody Shirk (@CodyShirk) September 28, 2024
The company called NMMC, which is being privatized by the Uzbek gov't, is pulling #gold out of the ground for ~$735/oz (!) and also mines #uranium , #copper , and much more.
Lots to understand with this one: pic.twitter.com/mvvd7k8zmQ
Shirk describes Uzbekistan as a region largely overlooked by international investors, despite its rich natural resource reserves. “Navoi is the fourth largest producer of gold in the world, and they contribute over 6% of Uzbekistan’s total GDP,” Shirk noted, underscoring the significant role the company plays in the country’s economy.
Navoi’s operations include the Muruntau Gold Mine, which Shirk identified as “the world’s largest gold mine.” He explained that Navoi extracts gold at a cost of around $735 per ounce, while the current trading price of gold is near $2,500 per ounce, highlighting the company’s substantial profit margins. “You can do the math, that’s quite a profit margin for Navoi,” Shirk added.
Bekhruzbek Ochilov, Investment Banking Director at Alkes Research, also commented on Navoi’s recent success, stating, “Navoi MMC has successfully launched its $1 bin dual-tranche Eurobond, with 4-year notes yielding 6.70% and 7-year notes at 6.95%. The slight premium on the 7-year tranche compared to Uzbekistan’s sovereign Eurobonds, placed at 6.90%, reflects strong investor confidence in Navoi MMC’s financial stability.”
Ochilov further highlighted NMMC’s solid financial performance in 2023, noting revenues of $5.71 bn, EBITDA of $3.32 bn, and a net profit of $1.48 bn. Ochilov emphasized that NMMC’s upcoming IPO could raise between $2.1 bn and $3.2 bn by offering 10-15% of its shares, making it a significant offering on a global scale.
"The IPO is expected to attract strong interest, as Navoi MMC is a major contributor to Uzbekistan's economy, accounting for over 6% of the nation's GDP. Proceeds from the IPO could help finance the company’s capital expenditure program, which includes $3.8 bn in investment across 19 projects scheduled for completion by 2030," Ochilov stated.
The upcoming IPO of Navoi is a major development, with the company planning to list in Western markets by 2025. Shirk explained the significance of this move: “The president of Uzbekistan wants it to go public in Western markets in 2025. So that’s super interesting.” He suggested that the IPO could represent a unique opportunity for early investors to get involved before mainstream attention follows. “Right now is the time to keep an eye on this country and company, Navoi, because they’re a major player in the metals world.”
In addition to gold, Navoi also produces copper, uranium, natural gas, and other rare earth metals, positioning itself as a critical player in the global resource market. Shirk emphasized the geopolitical importance of the region, particularly as the US strengthens its ties with Central Asia, including Uzbekistan. “The US is going in there to establish these relationships to secure resource relationships for the US,” Shirk explained. He further noted that trade routes are being redrawn as international relationships shift, and these developments could have major implications for Western investors.
Shirk advised investors to keep a close watch on this region, particularly as it warms up to the West. “If you’re a Western investor, it’s a pretty good opportunity to get in first, because it’s going to make the news later on when most of the profits have been made,” he suggested, highlighting the potential for early movers to capitalize on these geopolitical and economic shifts.
Though the exact IPO date for Navoi has not been announced, Shirk promised to keep his followers updated. “They haven’t actually announced a date for this company to IPO, but they have said they want to go public in the US, which is very interesting,” he remarked, indicating that more details are expected in the near future.
One commenter under Shirk's post wrote: "If listed in the United States, NMMC's valuation would likely be higher than if it were listed on a regional stock exchange, given current investor interest in mining companies, especially as demand for gold as a safe-haven asset continues to grow."
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