Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Bankrupty, i can vouch for that just did 135K and the bid was hit immediately, and im definitely a buy!
A copy of the previous link, you can watch the video which is in English.
https://pt.linkedin.com/posts/horizonteminerals_v%C3%ADdeo-corporativo-horizonte-minerals-activity-7110636491139092480-N_eK
One of the recent presentations said they’d already spent 50,000,000 rel about £8,000,000 strengthening bridges and upgrading the roads to site
Have you got a link to make it easier for us all to see? Cheers.
Yep, the (real) spread is maybe the the tightest it has ever been. A little bizarre, maybe the big orders have dried up a bit? Can't see L2 order book, but when a 100k trade has gone through in the last few days it has really nudged the price either way.
Got to say i am surprised by how liquid this is on the buy and sell side.
There are a million shares ( pre-consolidation) bought and sold recently and no problems trading this amount
Not that important but anything at or below 16.55p is a sell and there are not that many real sells today......most rest is buys! I topped up myself just below 16.6p.
Headder,
I agree and disagree with your post. Firstly I don't think A2 will be funded just by FCF anymore either, particularly if the cornerstones want to accelerate it to get to payback quicker. It will likely be funded by equity, just not at these prices. I don't think the current round of financing will include A2, but you never know, it might.
Nickel price trajectory is notoriously hard to call. Analysts did predict a fall towards the end of 2023 but sharp price rises later in 2024 and beyond as supply constraints come up as demand increases. You still see the longer contract prices far higher than the spot price which supports this view. Nickel has also been hit less hard than some other metals, HSBC indicated this week that the worst of China's internal financial crisis is past and that economy is expected to return to growth, potentially spiking demand again. For now the chart looks to be levelling off at $18k a ton.
A large royalty would be a wild card here. I am sure royalty has to play a part in the fund raise as equity dilution at these prices still makes no sense as we have kicked around endlessly. Too big a royalty compromises profitability, too small and it leaves too much left to get over the line. I'd bet on a fixed term higher (10%) royalty leaving long term profits in play. 10% @ 5 years is 1800 x 14500 x 5 = $130m if nickel flatlines, so you would expect maybe $100m to buy it.
Nickel at $18k gives:
$18k - existing royalties and production taxes - Glencore discount = ~$16k
$16k - AISC (~$10k) = $6k a ton to pay debt and royalties.
$6k - 10% new royalty = $4200
$4200 x 14500 nameplate = $61m p.a. to pay down debt and bottom line profit.
Nickel back to $22k gives:
$22k - existing royalties and production taxes - Glencore discount = ~$20k
$20k - AISC (~$10k) = $10k a ton to pay debt and royalties.
$10k - 10% new royalty = $7800
$7800 x 14500 nameplate = $113m p.a. to pay down debt and bottom line profit.
Relatively small price rises and falls in Ni create a disproportionate outcome. It really comes down to the macroeconomic environment.
Ditto that - has to be done by (latest) mid December IMO. At this stage you are burning a lot of cash. I expect the reason we can continue uninterrupted at this stage is because all parties have a very high % degree of certainty that a funding solution will arise, and that therefore the current cash burn is justified (as opposed to suspending operations for now, with the additional cost of restarting them again once a solution is found). You don't continue to burn cash as you approach a precipice unless you agree the precipice isn't a precipice IMO. The funding solution will be sooner, than later and I think Nov or early Dec.
I don't know how long the gap in time between the 'figure required' RNS and the 'funding' RNS especially as the figure is likely to be approximately known now, so plenty of time to thrash out a framework agreement ahead of its publication but I would expect 2-3 weeks might do it. So countdown starts when we know the number.
We were also promised an Araguaia 2 DFS at some point in Q4 (was it mid Q4?) so that may feature in the announcements but not sure at what point.
Rover
I think this has to be all resolved before Christmas late in this quarter. Most of what has gone wrong was the pull out of a contractor not delivering what they were contracted to do. The company has replaced them but it takes time for the new entrant company to get up to speed and deliver. What we do not know is why that contractor decided to let HZM down. The new contractor needs certainty fairly quickly.
Billy ramper,
I think Kindergarden comments is what you have been making since 1st week of October, read them back yourself, all there. Here is small snippet. End of conversation as far I am concerned. On the filter list
"Next week update coming. I genuinely think by Thursday an update will be provided …the SP hopefully will be up to anywhere around 35/40p and then beyond that it’s a crystal ball as demand will soar."
I was just wondering about the news flow and the critical path.
When will funding be needed firstly to ensure the lights remain on and secondly to maintain a schedule.
Obviously the first task is to establish the extent of work needed to complete A1.
This is the independent review process being undertaken now. This due mid Q3. Maybe 2-3 weeks off. Will this be RNS’ed?
Will that have $ figures in, as it would have to be reviewed by the cornerstones?
This would feed into a financial funding gap analysis. I.e. how much the company actually needs.
Then comes the financial agreement(s).
Obviously these will be RNS’ed.
Would all the above be done in one RNS or staged.
They had $93 million cash. How long does that last 4-6 months?
Any opinions?
Has just turned up as a sell and my price includes stamp etc.
At 16.9p. I have managed down 45% of the value of what I held for a 10% increase in the potential loss of everything. In pre 20 for 1, I am back in that 3-4p range when financing was only partly agreed a few years ago. I am hoping HZM survives and one day we get back to 90p. Sometimes to achieve success has its moments when it is near complete failure. Hopefully this turns out okay.
Where does billy get £10 from? According to glencore, last q saw a 10% decrease to lme prices for ferronickel and the company will need to repay over $60m per year just for phase 1, for 7 years. Given expenses above cash cost, like sustaining capex, and the debt it's hard to see from my perspective how the company will do more than pay it's debt given nickel price trajectory. If people still expect the company to fund A2 from fcf they are probably just narrative following from company aspirations. And we know how trustworthy the words are coming from the executives mouths are don't we!
Hazbeen…no you are wrong. Why do I need to ramp? Never have and never will do…stupid school boy remark. I believe this situation will be fully resolved and the deal is done. Save your childish remarks for kindergarten…thanks
Billy ramper,
If so say enough times, you may get it right or even wrong , time will tell
Thanks and agree
I have now set out my stall too and more than doubled my previous holding.
Buy’s definitely showing as sells
Looks like whatever overhang is left is gradually being mopped up
News is overdue. Massive value in this company and I agree it won’t be sold on the cheap. There’s at least £10 value in these shares through the life of production…. The extra funding of £75mn? Is agreed…a no brainier for major shareholders who want the cornerstone investments covered through a share rise…a few RNS on way….expect these to sharply rise and by the eo Nov, 60p…. Gla, the maths is simple when you have Nickel reserves waiting of US$6-8bn….
Any takeover would have to two of the three cornerstones, if not all three. They'll still want a return on their investment - an extra $200m over the LOM and the acquisition of a huge nickel district would not see the asset being sold on the cheap.
Hi Strow, yeah I don't tend to go over to the other thread much these days. Maybe I will pay a visit.
I sold in the sell off and bought back at the bottom, now got more than ever and lower average price as I don't believe this is an end point for HZM, more an unsavory staging point. Being forced to announce the funding gap without a funding plan created a severe response. However at this price I think its massively oversold.
The companies wording in the 2nd Oct and the recent update hints towards strong cornerstone support, additionally I feel construction continuing is another big indicator of the direction.... So for me its all about what is the size and shape - royalty, debt, equity etc. But until we see it I remain nervous.
Likewise I am intrigued by what will happen to the timing of A2 -Its a big kicker financially and would help offset reduced returns from A1 so could be a central point of discussion. A delayed royalty on A1 for a couple of years for example could leave cash flow in yr 1 and 2 to build A2. Lots of clever and influential people in that cornerstone group - so I am very keen to see what the outcome is. GLA.
Hi Craigieboy
Other thread wondering what happened to you
Honestly,you still holding as many as you were ?
I totally agree with Charles Archer that it is no coincidence that this finance and Stage 2 bfs being announced at the same time.
The first we all heard of the cornerstones pushing hard for stage 2 to be brought fowards was at the investor meet presentation literally 2-3 weeks before the now infamous RNS.
It was openly stated by Jeremy and Simon that this was the case.
This funding imv has to be something to do with it because obviously one cannot bring the original plan to fund stage 2 fowards without additionally funding it as cash flow from 1 would not be able to provide enough for this to happen.
It was a given as soon as they both stated that and I’m surprised that no one really asked at the time “how are they going to do that”.
Maybe we are just about to find out.
I hadn't spotted this before, it will be interesting to see Peel Hunts revised price target from 220p when the funding package is unveiled.
https://www.proactiveinvestors.co.uk/companies/news/1028320/horizonte-minerals-tumbles-40-after-cost-overrun-and-delay-1028320.html
One scenario is definitely Glencore just buying the company. Fortunately for us they would have to make an offer that would satisfy the other two cornerstone investors as i can't see a deal going through that would leave them with their holdings in situ.
No idea what the number might be, but doubt it will begin with a 1 both happily and sadly!