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Wasarunner, It’s not that complicated, any new investor will be at major major advantage, ant the same existing ones can also keep their percentage same or Glencore can further increase it. Nickel has to rise or average around 26k IMO. Still very much inclined, a bid will land above 70p.
Well the capex cost (from DFS) was 2.5x. As long as the opex cost from DFS isn't also 2.5x, we're profitable :-)
I'm joking of course but it has bound to have gone up. The electricity price was fixed nice and low though.
Well that is another $100m they have available for investment elsewhere.
Maybe HZM is 3rd time lucky.
Now that the new CAPEX is known and financing cost, the new OPEX cost could do with being published. I’m presuming that those will be known by the company and shared to the privileged. I would also suggest that these have to be solid to be believable. The shutters haven’t been brought down yet so maybe the mine will still provide an adequate level of profitability.
I invested in Horizonte the first four years ago on the open market look long term income though dividends. (Yes. Bad decision! But I’ll have to live with that.)
I did all the due diligence I could and bought. That was looking through reports, presentations and any other information I could get. My decision to invest was verified by the funding being realised.
Although everything has changed, somehow I feel we’re are the beginning again. The same questions, the same forecasts, a different but same bearish market. The decisions taken then were full of risk and uncertainty. Some may say that as time has passed and what’s happened has happened that risk and uncertainty has diminished a fraction or two.
So to conclude is the case for investment by the majors now stronger?
Could be a raise at 2p now instead of 1p . The more the price increases the higher the placing price will be.
More good news is needed like Tuesday RNs.
We need a good leak to suggest an agreement is near. Might get a big leap then .
I’m always amazed at people commenting on the share price movement on the TSX.
Yesterday someone mentioned it was 75% up at close trading at an equivalent 3.5p.
Now we have comment on a 25% drop with only one sale of 35k shares.
Are they really a barometer, given the small volume?
Cheaper than a lousy curry
62 Shares were bought for 2.1999 p !! Cost £1.36
Looks like it's being bought on the lse @ 2.20 as its up 17% !
Looks like Horizonte is being dumped on the TSX the same way you dump a lousy curry the day after.
I guess the rumour mill got it wrong. Nothing new there then.
TDT
>>La Mancha/Orion/Glencore could finance this themselves but it doesn't suit them to do so, and ironically, that makes financing it harder.
Also IMHO the reason we have a financier in charge who has pulled in $50bn in deals. If he can't do it, it isn't getting done. If only the three parties needed to agree it with the banks, I think that's would have been more straightforward.
The challenge the cornerstones have got, which is what I think makes it complicated to get this deal done: even if the three of them could finance it (+ some debt from banks) because they want to maintain liquidity, keep it listed, and have it traded open market, they MUST attract further investment and can't carve up the $600m required between them. My reading of the Appian deal was that other investors didn't want to come in when Glen+La Mancha were taking the major share because they would always be in a minority shareholding in a company run by two majors.
The reason that's challenging here is irrespective of the terms on which La Mancha, Glen, Orion are _prepared_ to fund their slice of the capex requirement, they have to convince a.n.other partie(s) that this will remain a liquid company not entirely under their control where the further cornerstone(s) will have liquidity to buy/sell open market. To do that they have to offer terms attractive enough to the new investors because the new investors aren't in the 'we're going to lose $250m if this deal doesn't get done' scenario.
And therein lies the challenge. I think La Mancha/Orion/Glencore could finance this themselves but it doesn't suit them to do so, and ironically, that makes financing it harder. All IMHO.
IMHO Glencore will not want to have a majority here, but will work with the others (particularly LaMancha who they are close to - see SPAC reference).
https://www.proactiveinvestors.co.uk/companies/news/1028226?SNAPI
This was an announcement made back in February.
Glencore have wasted over $300m per year for a number of years.
Processing costs were far too high as Ni quality was rather low per tonne processed.
They will provide final $200m over the next 6 months until a new buyer is sourced.
No doubt during this six month period, they will be looking for new investment opportunities. If they can spend $300m per annum on a loss making company, then Hzm is prime to take to production within 18 months and then into profit.
HZM is of higher quality and concentration per tonne is also higher.
If Glencore believe that this will eventually be a profitable mine over a very long period of time, then Imo, they may want to put big bucks into getting the mine into production.
There are ways and means of putting funds into this operation and if Glencore want a majority here then they will have to certainly go a long way to funding the project. This could include a mix of issueing new shares and cornerstone/ lender finance.
We shall just have to wait for the ink to dry on what I perceive to be a joint approach by both lenders and cornerstones.
Because this (should?) be a profitable mine? As I understand it the new caledonia mine never was. Unless the opex estimates here were wildly out and the debt balloons through refinancing making this un-financeable, but the due diligence should discover that if so.
If this mine can't be profitable, then agreed. But that's what being bottom quartile on cost is supposed to give you - security against low commodity prices.
I can't see why Glencore or indeed any other of the key shareholders would wish to invest any more than the minimum here.
https://www.reuters.com/markets/commodities/glencore-halt-new-caledonia-nickel-plant-sell-stake-2024-02-12/
Well, I wish they had made the offer back in 2020 (or earlier) to buy the company pre prod at even a modest +% to prevailing SP when the company was £50-100m mcap. You would like to think they could have made a better job of the build and, given that that is typically what happens to juniors with Tier 1 assets (they get bought out for their assets, by a major) we'd all have grumbled a bit then looked for another AIM casino share to squander the gains on.
But, the BOD here wouldn't have got their 'get the finance deal done bonus' and couldn't monumentally screw it up so we ended with 0. It's only the risk that La Mancha or Orion end up with 0, as you say, that still gives any hope to the company because they'll be working hard to try and make that not happen. I don't know anymore but I'm with BuddhaBob on the timescales - April interim finance is crucial, because it makes a deal relatively likely IMO, and then hopefully a deal in Q2. If no April interim finance then the large lady sings I expect.
On that wasa,
I would't offer 300 to take over if i were glen. To me a figure of 50-100m is more realistic because in this scenario you put LM and O at near par, and ask Glen to assume a near 1.2bil liability for 1£.
They might take 50p
They might take 30p if stretched to hard.
I don't see them taking 5p, 1p.
The fact that they sit in the BoD to me serves one good thing.
They are there to resist a free meal for glen:
Safeguard against a scenario of a prepack and allowing glen to get the whole thing without via admin.
You want this safeguard. If you go to admin, you have no mine on licences.
Getting this whilst HZM is in existence (no admin) has to be valuable and the big bargaining chip for the weak cornerstone in a game of weak strong existing cornerstones and any further potential buyers.
If this was not a chip, I think it could have be taken already by the apex.
The other thing about the lowball bid is Orion and La Mancha have to agree it. They're unlikely to agree to a 99% loss of their shares (i.e. the current price) UNLESS the possibility of a finance package and getting the mine up and running are effectively 0 because they can't do it. Then it may be that Glencore step in make the offer at a number they think Orion/La Mancha would accept.
The point is then Glencore or the buyer has to assume: $200m debt already drawn down + $600m to complete the project + $m they had to pay to La Mancha Orion and existing shareholders. Not saying it can't be done but it can only be done if Orion and La Mancha agree, and they will only agree I think if they can't raise the money themselves via the financing package.
If Glencore was already going to offer them all their money back (i.e. $250m) for a full T/O they would have done it already, I expect. So Orion / La Mancha (and other shareholders in at the £1 level) stand to lose if a bid comes, probably. (They probably stand to lose also if it gets financed - no doubt about that).
On that low bid offer - point, a comment.
I've seen Bear Stearns and how in the day it went to JPM for effectively zero.
I was right in the middle of it when it happened as a grad recruit.
Just assumed liabilities.
Same kind of deal more recently with CS and UBS, pennies to the dollar.
Effectively just assumed liabilities again to no premium.
Here all this time, i've been betting against these types of scenarios based on a different idisyncracy:
You have 3 corners.
One being particularly big in assets relative to the mine on the one hand...
And
Putting LM and O people on the driver seats of the new BoD.
Also things here taking longer. Bear was flipped in 2m.
CS about the same.
The Horizonte saga is at least 5m+ old.
It does seem the constituent Corners to control the game of negotiations.
But you have to look at it objectively:
I am not doubting it here that this is a different game to a big bank collapse where total wipe out of the stock can occur.
Yet... to what end.
Fine we gotten April.
Then what?
GLA.
Don't give me or anyine financial advice Publican, if people here want financial advice they should seek it from professionals not some sad annoymous poster who spends large parts of his life being a boring repetitive nuisance on a BB that he has no vested interest in !
I an very happy to lose my remaining 1% and posiibly even gamble some more on the outcome being more positive than 1p so please keep your unwanted finacial advice to yourself in future !
A month will be enough for them to decided whether to fund an interim package to keep talks going in the right direction.
Full finance package probably won't be until end Q2.
IMHO of course.
Any cheap low ball bids are perhaps wishful thinking as the 5mln mkt cp is irrelevant. Any buyer needs to pay all the outstanding liabilities as well as the $600mlln to bring it to production.
That means they would need to be paying nearer $1 Billlion for this £5mln valued company !
Yes,the rns didn't say 'wiped out ' it's said any deal is unlikely to lead to a positive outcome for shareholders.......30/20/10/5p wouldn't be a positive outcome for most shareholders so that statement is open to interpretation until the funding price is known.
At what price the outcome is 'positive' is anyone's guess, even the company won't know the price yet as each party fights they're corner to get the best deal possible.
Obviously the market expects the funding to be around 1penny but the market doesn't know anymore than anyone else on the funding price.
Woo thanks folks, especially Buddha for the thorough answer; well now give me the reverse angle:
Is a month now going to be enough to conclude?!