We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Yes of course, even if a funding package is agreed there is no certainty it will be positive even from the current sp and that's the gamble we take.
If you believe the cornerstones will accept being 100% wiped out and still willing to pump many more millions in then it's definitely best to close out and if you believe that a funding package will not be secured then it's also best to sell out so it all depends on what you believe will happen with regards to funding.
Personally, I think the cornerstones will want more than Zero, or 1p to invest many more millions but that's just my opinion, the deal could as easily be worth zero for existing holders or there could be no deal & a firesale or it could be funded at 5/10/20p.
All scenarios pretty much wipe out existing holders as the company have pointed out unless they've averaged down or bought the lows, which brings more risk but potentially offers a way out without being wiped out.
Interim funding in April means deal will be done.
No interim funding in April means it's over.
I'm pretty clear on those parameters - however the terms of the funding deal still won't be known (and might still result in 0 to very close to 0 value left to existing equity)
It's all to play for @ 2p.
The sp could double/quadruple in a few weeks if interim funding is agreed as this would mean that they are confident a deal will be done.
No one will fund the interim if there's no funding package so this will be the big sign and we should know it in a few weeks.
Gentlemen, place yr bets !
It was over 6 months ago then 3 months ago this:
The Facility has been provided by OMF Fund III (F) Ltd. ("Orion Mine Finance"), La Mancha Investments S.à r.l. ("La Mancha") and Glencore International AG ("Glencore") (together the "New Money Lenders"), who have each committed US$5 million to the Facility. The New Money Lenders will rank pari passu with the Senior Lenders and will benefit from the same security package. The Facility will have a maturity date falling 102 months from 7 December 2022 and will bear interest at 15.00% per annum.
Why? Why did they all put $5m new money in when it was 'all over'. Because they are suckers who like to lose more money? Appreciate it's small beer to them but it's still - money. They knew the numbers (we didn't).
Contrarian
It is unbelievable. This was all over on announcement day 6 months ago. That was clear as day to many. Fair enough there are optimists here, but oh my effing god they are taking the biscuit now.
This is a question all of us should ask.
So why did Glen, LM and O invest in Horizonte in the first place?
At the top of the list for most, will be to make a bit of money out of the vast potential the company had. A1, A2 and V. Oh, and talk of A3 and maybe V2. Oh and a possibility of being a FTSE100 company. How dreams crash and burn!
So why would Glen, LM and O invest in Horizonte now?
The only reason I can think of, is not to lose money. If they walk away now they have certainly lost. I dare say the potential is still there for them.
However, for us it’ll be crumbs at best.
Calculator diarrhoea
Wishful thinking calculations. Dear Lord he's at it again.
Yawn - How many years has he been calculating to the Nth degree and missing the point that the market is governed by greed.
Dont get me wrong a highly logical individual by all accounts but my god you take 10 Phd's and 10 plumbers in a room and ask them to invest after you explain to them the basics. The best outcome is it will be a draw the more often than not scenario is the plumbers will win.
Shareholders money around $200m already spent on project, that has definitely increased projects npv. Total debt as if rns $418m , some of which is not drawn yet, of which 89m is noteholders. This new extra 600m is overlapped, so ctc is around 800m , not 1 billion, detampers are consistent with BODs hefty cost projections.
"Wasa, Solg raised cash on premiums couple of time from Newcrest and BHP."
Solg was not distressed at the time of those issuances.
Neither option 1 or 3 necessarily provide upside - option 1 could still result in massive dilution for existing shareholders even if there is some debt and option 3 could result in massive dilution for shareholders that ensures even at production the SP never recovers above the value you buy for today. If you believe option 3 is a likely option you'd wait until the funding is sorted before risking throwing your money into a black hole now.
Yes people say never done before here because it is unusual. But this situation is also unusual - 3 cornerstones look to lose $300m put in (if you include Glencore) at 1% of historical SP they effectively lose that money. Can the banks insist on it (to take some hit themselves?) I'm not sure. Cornerstones want to maintain liquidity don't want to wipe themselves out and bring cheap new equity in etc.etc. Who knows. I thought it was reasonably straightforward at $300m required to do this deal on terms that saved some money and face for Orion/La Mancha et al. $600m may be a problem, that's what many on here are saying, and it is also what the market is saying. 'Done' they say. May be. We will see.
Wasa, Solg raised cash on premiums couple of time from Newcrest and BHP.
The odd thing here is that the capex required (call it £500m GBP) was also the mcap pre crash (£500m GBP). That's odd because whatever today SP is (or indeed any other SP you arbitrarily pick) and do 100% equity, assume you now recover to the previous mcap because the NPV is unchanged (why would it change, there is no more debt), the price you issued equity at is now the fair price of the share, with better to come when mine built.
So at 2p you can do 25bn new shares raise £500m and if the mcap immediately goes to £500m the shares are worth 2p. At 20p you can do 2.5bn new shares raise £500m and if the mcap immediately goes to £500m the shares are worth 20p.
(Ignoring for now the pre-existing shares 250m or so)
So there are three potential upsides to the current SP:
1. Not 100% of the deal is equity
2. The raise is done at premium to current sp because that suits cornerstones (I know I know, never happened in the history of the univers)
3. At production the shares are worth more than pre production
If you are buying the shares today, at todays price, you are literally banking on one of the three above. All three provide upside. If the raise is done at steep discount (say 1p on a 2p prevailing shareprice) then of course the above doesn't hold.
It's just the maths, I'm not saying it will come to pass.
NICKEL Price
17,271.05
Banks to write off :50mil
Leaves you have to issue 2.75 bil new shares at 20p.
Give 1.75 to new investor. 350mil. To get 55-60% of the mine.
Existing corners take the rest of the 1bil at par with their existing percentages to put 200m
They assume 35% of the mine (so diluted 50%)
We are left with 5%, so diluted 10x times.
This is really what I am thinking it will happen.
Its a big big big ask to expect each of the existing to put 60mil
You cannot ask a new to put 350 without giving 50% of the mine.
Banks might just be willing to write off 50m.
Is this fair? Well everybody loses.
And yes done at 20p. An mo you do jumps to 35-40.
"If assets sale gives shareholders £50m, that will be almost 20p. £10m gives 4p, £20m gives 8p."
If an assets sale gives shareholders £500million that will be almost £2 per share, but so what? An asset sale first has to pay off debtholders so the starting bid has to be in excess of however many hundreds of millions of debt is currently out there.
The situation the company is in makes it an utterly terrible entry point - its a high risk gamble that no one should touch with a bargepole, private investors are last in the queue in and almost certainly will get hugely diluted and more likely completely wiped out. Existing holders should also apply the same logic and protect whatever capital they have left and move on if for nothing more than your own sanity - but you won't as you are emotionally invested and hence dreaming up all kinds of unlikely scenarios.
You can but try ThePublican777 and IMO well done for the effort!
I was invested in HZM for many years and called it and exited before the storm....my thoughts were the size of the ££debt.....the same with HUM (and I highlighted that to you when you first looked at it from SHG as an alternative (the money at HUM just disappears)...and POLY...and SOLG....and GGP.
The only thing AIM is good for is the odd momentum play...you can't stay at the party long! Sadly it is addictive and I have still got 15% odd of my net worth in 56 different Shares (mostly in AIM).
Certainly well shagged at SHG.....but I can understand it from the Patel's point of view too (I'll post there next).
As for here at HZM the SP gets to a point where you've lost so much on paper...it's just not worth selling and the clutching of straws is all that is left.....it is worth trying to trade a bit to make up the losses but any gain of course is just at the expense of someone else's loss....sadly I think there is less chance of peaks here than troughs from now.....so probably not worth trading.
But it is up to each to make their choice......that e.g.1% to 2%? chance of success here could come good or you can take your remaining capital however small and start again elsewhere! There is still hope I've been in two spectacular less that 10p shares that have peaked above £15 and the GGP less than 1p to 38p (again called that one and valued it at 6 to 7p when at 29p and got banned from LSE).......sadly my problem is taking profits much too soon.
It hasn't been easy of late with 50% odd AIM indices down in the last 3 years or so and miners also....but I'm not giving up...ever.........but only with my 15% or so!
GLA
p.s. But my other 85% is well spread between cash, collectibles, property etc. the 15% is a gamble for me......reminds me of Eagles Hotel California "check out anytime but never leave" Sure the 15% is just like VAT...lol
It's all about risk/reward ........each to choose....everyone different!
Agree with Wasa & Mv, everyone is allowed their own opinion.
All I was saying about the banks, is that with any sale of the assets they get first bite. Shareholders come last and are therefore likely to get nothing.
In my view, if the banks through, say restructure, are willing to take a haircut, then I absolutely cannot see them giving any of the remaining 600m.
To me it makes no sense for them to keep lending.
So we might be faced with a scenario of 'find 550 new equity' to fund this all equity.
(Say 50m is written off from restructuring)
Such a huge figure to find : bad and bad and a bit of good.
You have to navigate this with a low enough price to attract external money.
As I don't expect the existing corners to refinance this with more than double of what they previously put in.
Hence a 4th player has to come in sight.
Well i did the math for myself and 1 and 2 p don't work.
Anything above 30p is unrealistically optimistic.
I am thinking it will be a figure 20-25p.
What chance i give it?
Well, but of course, 1%.
I don't see the banks getting all their $300m back, and La Mancha seeing 1% of $97.1m back. That's the slider you have to play with. What's a fair number. Surely that's what's being discussed, extensively, as well as where the missing $600m is going to come from (if indeed it can be found).
It's clearly not going to be great or even good for shareholders. If they are negotiating hard with the banks, because that is the only way to refinance, and the banks are going to take some hit, they will also insist that equity takes a hit. What people here disagree on is the extent of the hit. It might be 100% it might not. Given that the current price is at around 1 or 2% of the former price the betting is it is a pretty massive hit in any case. The contrarian view says not - we'll be back to £2 in no time, the contrarian view is this isn't completely done and the cornerstones don't want to refinance at 1p or 2p a (new) share. Both opinions are valid, as is the 'Horizonte in it's current corporate structure will never actually mine nickel' (technically they have mined it because there is a pile of ore but that's a moot point). What we don't know is which position is right and that's why there is still trading, both buys and sells, as people places their bets. All IMHO
I think we should go with 3m as that what prevailing market implies at 1p.
So the cornerstones spend all this (whatever) time, with legal (or without) doing the paper work to shaft it for that 3m.
And all this time, they’ve seen all the 99% collapse without moving a single share. None of them!
So they hold all the (whatever) cards at the negotiating table to achieve just that…
1p, because market does not reward failure.
And who’s this market that knows everything?
The mm’s algo who runs the bid/ask every morning..
And the mikes, wasas, and what not little (or big for that matter) chats in here…
…who has to be a reflection sample of the 49% market base…
This is by no means intended as inflammatory.
You have your thesis, we have ours… it’s a free country…
Why it had to become personal i never got it…
Anyhow… good luck to us all.
I wouldn't say it was allover just yet.
Something is going on 🤔
Whatever, it is ,it won't be good for existing shareholders.
In terms of asset sale the shareholders will get nothing as banks will get most of any funds in.
So we wait . Mid April might get some update 🤔
If assets sale gives shareholders £50m, that will be almost 20p. £10m gives 4p, £20m gives 8p.