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But if they announce 5p it will rise to 5p or more
The scenario is that you’ve been approached as a potential new investor by the company. Before you get to see the prospectus you sign an NDA. You also at that point become privy to insider information. You can no longer trade in shares of the company. If you like what you see what are you willing to invest. It’ll be about the future not current.
Rob, you say the 3 cornerstones will have to get wiped out to save the company but why would they bother getting wiped out only to plough many more millions in at a tiny fraction above zero pence ! Why bother....Much better to sell the assets and not commit and risk anymore capital if that be the case !
That way they'd see some return instead of being totally wiped out, no investors will be bothered about saving the company if its going to wipe them out and cost them many more extra millions.
It's Pointless.
Just sell the assets, even distressed, they've got to be worth £250/300 mln to the Saudis/Oman/Uae ect, possibly more if they're bidding against each other.
Settle the liabilities ( £200mln? ) and cornerstones /shareholders may be left with around £50mln, maybe 40p a share ? ( figures unknow)
So what does a cornerstones do ?
Option 1, Lose everything and plough endless more millions ? Wtf would you do that ?
Option 2, Accept a huge haircut but not a total wipeout and invest more millions ! Sensible !
Option 3, Do not put another penny in and sell the assets to the Arabs, Sensible !
Option 1 does not make any sense to a cornerstone ! No need to get wiped out and then plough endless more millions in, thats plain stupid, just sell up and cut the loss, and save yourself £100 or whatever millions.
Nobody will pay 5p when the shares are at 2p.
I still can't see them getting a placing away multiples above the prevailing price at the time of the placing Announcement.
In reality it just doesn't happen.
The price has to rise within the next 2 weeks to have any chance of a placing price above 2p
The 3 cornerstones will have to write their shares off and start again in order to save this company.
The banks don't care as they will get the mine proceeds from the sale.
You only have to look what happened to ROQ on Friday . They had to abandon there raise because share price went down from 7p to 4p. Probably had it earmarked for 6p new shares , nobody would want those shares if the price is now 4p .
Same at HZM , today will pay 5p when the shares are at 2p .
Wasa
the problem with that argument is that thinking it was all over 6 months ago, meant you could salvage 50-75p for your shares, now arguing what all over means is rather academic as 1,2 or 5p means you lost 99,98 or 95% of your investment
what would people in that situation give for 70p for their shares now...
Chess,
I give it exactly 100% chance you will collect a profit (potentially bags of it) if (and it might be a HUGE HUGE HUGE if) a deal lands.
And this is my narrative at is heart.
This stock is terribly beaten. Yes there is a huge chance a deal will not happen.
However, on condition there is one [ and purely for arguments sake] i give it exactly 0% chance that the deal would be sub 4.5p - it is pointless to the interested parties, that are invested in the millions.
I don’t think they will chase a pyrrhic win.
I think they are here for the profit margins.
I don’t think they are here for the totalitarian ownership of the mine.
And all three are deterrents from a wipe out dilution.
Good luck to you.
From a new nvestors point of view, it's basically like being at the initial funding stage as around £500mln is required, just production is nearer this time so arguably a more favourable situation than the first round of funding for any new investor.
LME Nickel
17711.00
3-month Closing Price
17,461.50
+233.00
The posters who think that funding will be automatically done @ zero or 1p are assuming that every interested party, and there will be more than one, have all stipulated a price of as near to zero as is physically possible or no deal.
I put forth that interested parties (think Gulf States) will be bidding against each other for a piece of or all the pie.
We all know how voraciously the rich Gulf States ( Saudia/UAE/Oman ect are seeking long term mining opportunities to diversify away from fossil fuels so this presents a perfect opportunity for just that as its long term & near term production.
So to think all interested parties will just present offers that result in the cornerstones getting nothing or 1p,is itself, fanciful.
Sure, all offers will result in a negative outcome from £1.50/£1 /50 or even 25p as per companies statement but 5/10 or 15 is possible, obviously the higher the price the less likely it is.
At 4.5p I get my stake back (after increasing my holding recently) and that would be a good result for me. I don't think it's an unreasonable target and I expect to see this price and more on interim funding in a few weeks.
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.