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Nickel once went through the roof on LME, mainly Geopolitical risk from Russia, even if Sponge Bob wins the White House, Russia will remain and is a challenge. In a step by step approach, Industrialised Countries will stop buying Premium Nickel from Russia, India is not that big consumer and China already tied up Indonesia. On internal front, La Mancha is aligned with shareholders, assets disposal can generate value for shareholders.
A higher nickel price can only help hzm,.
Only a few weeks now for interim funding, which should give us a boost as it means a funding package is on the cards.
NICKEL Price
18,463.02
+684.52
Nickel also looks like Gold. New major investor will be on distinct advantage, only thing existing ones contribute their fair share
Doing a jeremy Cl, I would give the following response.
"I really haven`t got a clue, but here is what I think.
This is now a 2 year project. $600m needed to finish is therefore $300m per year. Both Glencore and LM lost out in another Brazilian operation where they had intended to put another $100m each to get the operation going. Therefore, they have cash. The financial year end has been and gone so why cannot both these Companies now use that $100m each to fund the 1`st of the 2 year requirement. Ensure the banks release their $135m plus, and Orion to dip in with $30m and we have $350 m to take the build programme to almost piloting stage. Commit to ensure that any remaining monetory needs will be met for year two. Tablets of stone agreed by ALL lenders.
Immediately, the shares will rocket.
Speed up the completion date by 6 months and you cut $50m from year 2 requirement. As we enter year 2,and as the shares are now trading at about £! , decide that a share issue will take place at say 80p per share. Glencore, LM and Orion will want to maintain their dominance, so of the 250 m new shares, they will take up 51%. Existing shareholders will be given first option to buy the 120m remaining shares, after which time, the book will be opened to sell on the balance. Any tiny shortfall to be taken up by the big three. The end result is that the mine is finally built and begins production, the above ground asset value is roughly the same as the revised book value. 500m+ shares at 80p and the Company begins to finally pay back the lenders, quicker when line 2 becomes operational. The sp begins to rise again and nobody loses. Everybody is happy, but what do I know? I am only Mr. Clksn"
Wise man our Jeremy. Haha
Not thanks to HZM
Cheese,
There has already been plenty of discussion on why this will remain a PLC. You can read back a on this chat for several months, but to save you a little effort here is the shortest of summaries.
La Mancha the largest shareholder does not deal in private companies. They will not sell their stack here cheaply.
I think you maybe right. With all debt overwhelming the current market cap there seems very little point this remaining a PLC unfortunately.
The figure was taken directly from the Aug 23 presentation with the headline 20k/t.
Slide 11
https://horizonteminerals.com/news/en_20230829-corporate-presentation-august-2023.pdf
NPV $1.13 is lucrative, it was definitely calculated at 14 or 16k per tonne, not at spot price 20k per tonne. Industrial average and spot are two different things.
Yeah fair enough, and for what is worth no NPV value alters what I was going to say in the event of existing corners being able and willing to put all monies needed for financing.
Unfortunately in this game, equilibrium is really oblivion. There's no incentive leaving a residue market of 10%. Just take all. Else you leave money on the table.
But the scenario demands all corners agreeing to put their fair share of the 600 to keep whatever desired %.
I am betting against that. That they do not want to put 600 to distress.
In all those games where partial subsidy occurs by existing corners, and not total, then we get those 15p-25p dependent on what assumptions you make for what each weak cornerstone can do.
Weak defined: a cornerstone not willing to pay total nominal percentage of current holding, against that 600m.
Now fully out and have a decent Capital gains tax off set. Hope you folks get some luck.
Mv01,
Unfortunately none of us will be able to come up with the new NPV figure, so it’s gut feeling, like the rest of the post. The A1 NVP was $1.13 billion back in Aug 23. With nickel at $20k/t with exchange rate of 1.25 $\£. So £750 million is just a pure approximation that I wouldn’t treat anything other than a guess.
For your second point if you consider repayment of debt part of the OPEX then yes it does change the NPV. Maybe up to $20 million. So in the spirit of gut feeling guess illustration not much.
Currently I wouldn’t defend anything in my post as I haven’t got a clue. 🤪🤪🤪
I’m just trying to present alternatives.
Rover how do you get that 750m NPV?
Has to be a function of opex. So cannot assume the same figure for both an equity raise of 600m v 300m.
NPV must be a variable in distinct scenarios not a constant - No?
There has been plenty of speculation either way of how this will pan out. Deal or no deal! No one will know until that RNS that tells us the future. However, fingered in the air, gut feeling without any scientific evidence I came up with a figure. It’s pure speculation, nonsense etc., etc., etc. If a deal is struck, whatever the deal in monetary terms I think between the cornerstones and new investors they will end up with a maximum of 90% of the company. This leaves the rest of us with 10%. I’ll give a bit of rationale behind this, liquidity. I believe this would be the minimum the cornerstones would want, ideally I’d think they’d want more like 30% to provide a more stable base. (Not too sure with that theory).
So at 10% what does that look like. Currently approximately 300 million shares counting all the hidden ones are accounted for. 50% currently retail, 150 million.
Therefore future shares in issue would be 1.5 billion. 1.2 billion new shares to be issued.
What is the future value of the company just considering A1 with 1.5 billion shares. NPV of £750 million by 1.5 billion shares is 50p.
This is where this all falls down.
If full equity of £600 million raised via 1.2 billion shares, they’d have to invest at 50p a share, absolutely no return whatsoever.
If equity of £300 million raised via 1.2 billion shares, they’d have to invest at 25p a share. Is a 100% gain enough with an upside of A2 and V?
Total funding package so far secured is $700m, equity raise+bond holders+banks, some of credit facility is undrawn. In recent RNS, ctc is increased but how much more they need? Around $250m shareholders funds, anyone interested should pay $250m and take it private. Metals will rise again like nickel and palladium especially
robdog
that is really the point. anyone who invests in aim gets their noses rubbed in it. the question is how many times are you going to let it happen or learn your lesson, take the hit and never do it again. then, at least you learned something from the experience.
anyone who has invested in aim had quite s******s to themselves when posters here thought mgmt was looking after them or that they seemed very sincere when they met them at agms etc.
what happened here was not unusual. whether it was just a mistake we will never know, but the outcome is usually the same on aim. it's all garbage, poorly regulated and the people in it leave a lot to be desired.
by all means have a gamble, but ffs stop parsing aim rns's thinking you can rely on the info and make a positive investment decision based on it. if hzm teaches you one thing its that. every bit of positive speculation from almost every poster on this board over the last two years has been bull****.
Anyone unsure about just how serious & hungry the Gulf States are about moving into mining and taking market share off China - read the FTs " How Gulf States are putting their money into mining".
Full article available free .
I have said all I need to say on Hzm.
It's now down to the 👵to sing or other inviting proposal 🤔or 💩or 😭
Spike,
I did ask that people think deeply about this. You may need that coffee you eluded to.
So I’ll give you the answer.
The point I’m making is the company once the deal has been struck it will no longer be distressed and as Chess says there maybe more than one player having a look
Spike; Firstly, I never said any investor would bail out existing shareholders, so why you said that is difficult to comprehend unless you have not understood my post ?
On the contrary, and in line with the companies statement, I have stated that the vast majority of existing holders, who haven't averaged down or bought the lows, will be pretty much wiped out on any deal.
As for the Gulf States being interested in a half finished low quartile nickel mine, yes, most certainly. The Gulf States are frantically scouring the globe for mining projects to diversify away from fossil fuels. These are facts and you can check online as to the authenticity, you may also wish to have a look at who Glencores largest shareholder is !
As for the £500mln Capex, All projects have capex, so any new investor in any mining project will always have this so I don't understand what point you are trying to make saying it needs hundreds of millions ?
As for bidding war, as I have said, there will be more than one interested party and each party will submit their offer and it may go to a second/third round before the best offer is chosen.
If you think 1p or 0.5p will be the best offer, that's fine, no one is right or wrong until the deal is done and I'm not here to encourage anyone to buy or sell. I am merely sharing my lines of thought with fellow posters.
If I am right and the funding is done at higher than 1p then I shall be rewarded if I am wrong then I lose,simples, I know and accept the risk & quite like the current risk/reward.
"So WHY should the new investor who is part of the deal not pay accordingly in line with the de-risked company future value, maybe with a little discount?"
Because they don't need to as its a distressed asset.
"One can reasonably expect a number of offers from the various Gulf States"
Its difficult to begin to describe how utterly delusion this is. Anyone externally interested in this, will not in anyway be looking to bailout existing equity holders and the notion that somehow the Gulf States are desperate to start a bidding war on a half finished mine with hundreds of millions of debt tied to and hundreds of millions more is just laughable.
You really need to wake up and smell the coffee.
Chess, I agree that whilst negotiations are ongoing there will be many interested parties looking, some just looking, some chancers with lowball offers and the serious players. The board at this stage will have dismissed the lookers and chancers, and will be negotiating hard with those remaining.
There will come a point where negotiations are concluded and final offers are made.
A General Meeting of the shareholders will have to be called to consult and vote on the board recommendations. I think the board will come with one, ‘take it or leave it’, this is the best we could get.
I do not agree that....'it will be a take it or leave it deal'...as some posters are saying as this assumes there will be only 1 offer !
I put forth that there will almost certainly be more than one interested party and negotiations will be complex, running a series of rounds to whittle down a shortlist to attain the best offers.
To think, as some here do that there will be only one single take it leave it 1p offer is extremely naive. One can reasonably expect a number of offers from the various Gulf States and quite possibly one from Glencores largest shareholder, that's without any financial institutions who can also be expected to tout for business with production being nearer than it was at the first round of funding.
I'm all for criticism of the
company and hearing both the negatives & positives as long as they are relevant as a balanced view is acquired by being objective so I encourage the negative posters to continue putting their side forward and we can debate the pros & cons and we'll see which side was the right one to be on within a few weeks when the interim funding is announced or not as some suggest !