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Agreed picked,it's potentially a tricky situation for a major wanting complete control,unless they would just solve that by a T/O
Just picking up on this from Wasa,
- will the terms of the debt make an impact on SP? Probably not?
- we know the debt is 'a given' or the ECA wouldn't have signed. So tranche B is already priced in
I’m sure the recent run up in price can account for a lot but not sure it’s at all near fair value
My take is that Araguia P1 is not even 1/4 of proposed development potential of HZM. (Araguia 1&2, Vermelho 1&2, which is cut down from Vale. Option then add in Serra DT).
Tranche A sent out a statement to the investment community, HZM is going to be a miner.
Tranche B provides the assurance needed that big banks back the project.
Equity & Offtakes signal that institutional investors should get in, we have moved out of the Orphan period.
Will tranche B news cause further upside. Think so, personally think markets will know where this is going and will start to price in real potential.
Anyways not long to find out.
To be fair CF, JPMorgan, and Lombard have allowed some PIs to build large positions here at a huge discount to fair value. It must have been a very frustrating time to be on the board of HZM, knowing what they have but only PIs buying into it, whilst other less robust miners saw their share price rocketing on the slightest hint of progress.
I want the full deal announced and clear, and then some new TR1s before I order the crate of Champagne at DJs pub.
I'm not sure the debt is fully priced in yet, there will still be those on the sidelines thinking it isn't over the line yet.
Also I think we have all agreed at some point that the needle will really start moving with institutional buyers rather than PIs, no matter how big the PI holding might be we just don't have the clout of investment banks wanting to build a position. Imagine Bailie Gifford decided to add HZM to its international fund for example. Those institutional buyers likely want more risk off the table and transparency if what they are buying into, otherwise more would be here now. I've been invested about 3 years here, I don't think we have had a significant new investor in that time, just Griffiths / CF debacle, JPM dispose of their small caps, and Lombard Odier sold their entire holding down. We have had CIBC come in but via a placing rather than open market purchasing.
I'd hope those instructions that left, CF aside, now regard their exit strategy as short sighted but I doubt it. I'd really like to see one or two new TR1s rather than hope this will be driven up by PIs.
Not sure I agree with the debt piece being already priced in, no step up was evident on the open from market makers with the ECA debt piece, all the action came from buying- so room for something more there next time round in my view.
Then again with offtake and equity news unlocking the NPV of the Araguaia project and being gateway finance to the rest, these aspects should also move us on. North of 12p is my thinking.
Eventually though when the dust settles it’s going to be the market that decides where the market cap will sit.
But I expect news flow on vermelho to be adding value through the build, potential partners etc.
I agree:
- will the terms of the debt make an impact on SP? Probably not?
- we know the debt is 'a given' or the ECA wouldn't have signed. So tranche B is already priced in
The unknowns are the rest - who is the strategic investor, what terms are they offering (equity, royalty, etc.). Not long to find out. How much offtake has been sold and on what terms.
I'm less pessimistic than others here about the build. GE in Brazil next year aside, I think the RKEF build out given the prep time the company have had is very doable. Covid notwithstanding. GLA
Perhaps I give the market too much credit, but i assume nobig jumps to come from tranche B news as it is expected and so priced in. Imo the sp is waiting to see what terms hzm has negotiated for things like offtake and the "investor" that's been talked about. Big share dilution and a long complicated road ahead to get a mine built in a different country so far away with interesting government, feels like a coin toss which way share price goes short term. Long term I'm in, but no illusions its probably gonna be bumpy and no easy ride (I want to be wrong :) )
Slightly odd being blue on what looks like tiny volume. Unless there is an order in the background there is no reason for the bounce other than maybe because yesterday there was no reason for the fall.
I think there is alot of folks watching this share closely. Once tranche b is announced and positive, this will take off!
Looks like the ship has steadied after riding wider market turmoil pretty well yesterday.