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Let’s hope it’s not just your buys pulling the price up.GL Anyway
15th May is the next critical date. News before then maybe good after then bad.
Announces an update in relation to the interim funding package announced on 27th December 2023, pursuant to which the existing senior lenders agreed to waivers including the deferral of accrued interest originally due at 31st December 2023 to the end of February 2024. These waivers were subsequently extended to 29th March 2024 and 30th April 2024 and the existing senior lenders have now agreed to further extend the waivers until 15th May 2024.
It depends how we look at the news, First scenario Administration? If Araguia and Vermehllo are sold together, Chances are high for residual value for shareholders. Second Scenario-Liquidate Araguia and pay the creditors and keep the Vermehllo on on going concern, shareholders will be on jam tomorrow. Above all, FairPlay is the key, Nickel is going to shine again.
I would like to take a glimmer of hope but alas I’m failing.
The only way I think of recovering anything is if the company with it’s subsidiaries were structured in such a way that each part was ring fenced and protected from the other without each being a guarantor for them. However I don’t think that is the case.
The scenarios have not changed.
Administration, sell out, care and maintainance or cornerstones and lenders produce a package of investment to take the Company through to production.
I do not like the first three options so am hoping that the fourth option somehow takes place, otherwise everybody loses massively.
Resource is intact, Nickel spot at 19k per tonne, Geo political and consistent demand is going push it much higher. Sell out or administration are both going to generate value for shareholders IMO. Because in Administration, both Araguia and Vermehllo will be liquidated and will generate value for shareholders.
I honestly hope that some value can be realised.
HOWEVER,
In a fire sale I would not be too hopeful that the sale of assets would even cover the debt.
I’m open to being persuaded so please elaborate on your calculations.
Rover? How much sale of assets will recover? Araguia tier 1, $500 to $600m already spent on it, Vermehllo sufficiently funded, mine life 38 yrs, on cusp of PFS, Bods didn’t release it. My calculations $600m to $800m assets sale value
I do sincerely hope you are right.
We need to hope someone with a large amount of cash comes along.
Maybe we should hope that the BHP Anglo American deal falls through and BHP wants a nickel mine as a consolation. Wonder if Glencore would be happy with that. Or even Vale taking it back.
We can only hope. 😂😂😂😂
In fire sale scenario- Vermehllo will be sold above $200m because mine life 38 years and PFS complete and sufficiently funded. Araguia also will be sold above $200m because it’s already being mined and there is probably substantial concentrate. Now there is also $700m spent as Capital expenditure. Even at fire sale, assets must recover $800m
The danger on the doorstep today is whether the company creditors will walk up knock on the door and demand payment. Unless they can persuade these creditors to walk away as all is well it’s game over no matter what value is in the company.
I truly hope the company can survive this.
Pump and Dump
As at 26 April 2024, the Company had sufficient working capital until the week ending 17 May 2024. However, this may vary depending on the progress of discussions with creditors, the cash expenditure profile of the Araguaia Project and potential working capital saving measures being explored by the Company. No value for shareholders.
Just to think those buys back in August would’ve been £3 million not the £7k today.
🥲
As per RNS, there is total debt $418m, not sure whether undrawn facility included in it. If so, BoDs has tried to conceal the information just like removal of NPV calculator.
What gets me a little bit is that the company has used funds for non-esstentials...the pre-build of ore : not essential to the plant build : extension of the power line nice to have but not essential...
What exactly does this mean:
“options include financing at the subsidiary level”
Surely if they were to finance at a “subsidiary level” HZM would remain intact or it could be considered insider dealing ?
Any thoughts?
Just to be totally fanciful it could mean government or state funding as they may not be allowed to fund international companies.
To be honest that suggestion it truly ridiculous
🤪🤪🤪🤪🤪
The parent (from the sources of external equity, retained profits and bank or other debt) can subscribe both equity and/or debt to finance the subsidiary. It could also persuade a bank (or other lender) to lend directly to the subsidiary.
In this instance, HZM is the parent, I believe. Araguaia Niquel Metais Ltda, is the subsidiary company developing the mine