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What does that mean?
Since the decision was made to suspend any further investment in HZM, the price of nickel has risen by about $2k per tonne.
Extracting 37k tonnes per annum racks up a further $74m of potentially free profit per annum and minus royalties and taxes, this would give a minimum of $40m extra per year.
This would have reduced the loan payback dramaticall, and any future rise, (which now looks likely) must surely now make some of the 150 potential investors have a re-think.
Perhaps the BoD could discuss this with the administrators and see if there is any mileage here. Maybe even the cornerstones to have a second look at the increased profitability.
Did JM get it so so horribly wrong?
Well, as the CEO the blame is squarely placed at his feet, and rightfully so.
Being around for a few years you could come up with a numerous theories, all of which doesn’t help those lowly private investors like you and I.
However, I’m not convinced of the new figures. They are too high. I’ve no way of knowing the truth it’s just a guess. We will only know when the mine has been completed. I’m sure one of the major miners will be willing to take it on. For me, I still have this as zero value. I do remain delusional and hope for miracles.
You couldn’t make this up!
NICKEL Price
21,482.44
+749.94+3.62%
Another $27m of "free" profit per annum to be had.
In such a short space of time, this now equates to over $100m extra profit per annum.
A 6 year payback on $600m loan from the cornerstones on a 28yr. LOM project.
Lets put it another way, after taxes (even if you use a 50% rate), this would equate to an extra $1.1b dollars profit.
It beggars belief that the cornerstones can walk away and lose money here when all the signs said that nickel prices would rise.
Will they now seriously try to put a package together, or continue to bury their heads in the sand.
Another lost cause sadly.
And Nickel price will probably level out between US$25,000 & US$30,000/t by the end of the year, add on ESG and potential taxes on Dirty Nickel it really beggars belief and through in this was a Long Term Investment Strategy for La Mancha and Orion Fund III , knee jerk reaction from the cornerstone investors ……
*Thought this was a Longterm Investment Strategy *
The fundamentals of this being a profitable mine long term has never changed even on the inflated CAPEX costs.
I still don’t understand why the cornerstones have not stepped in to fund.
The only thing that comes to mind is they are playing a game.
The CTC figure seems overly high and G-Mining were obviously given free rein, surely another quote or 2 would have been appropriate & standard practice.
Where was the breakdown for the massive increase for a project that was supposedly 70% complete
The cornerstones have acted as day traders when they should have remained focused on The Long Term Strategy, you wouldn’t want to invest in The Orion III Fund if this is their approach, or La Mancha for that matter, zero cojones!
Not many people noticed that the company initially engaged Reta Engenharia to do the cost analysis (2nd October RNS), that changed after a new board was appointed to be G-Mining. Only saying!
Maybe playing a game to get protection such as tariffs/environmental standards for Nickel production so that they have a stronger competitive position vs Chine-Indonesia?
If the West introduces ESG criteria for nickel sourcing, all the way through the value chain, this will either stop Indonesian Nickel production coming to the west or drive up their costs as they have to conform to minimum standards.
I personally find it a joke that we talk about the Green revolution and then the Nickel in EV batteries is sourced from coal fired smelters in Indonesia.
I expect the difficulty is the get the Export Credit financing providers to agree to the restructuring package. If i remember it is Denmark and or Finland and they are probably the first that got spooked by market cycles and the China-Indonesia tie up. The cornerstone investors will not move until this gets sorted and the secured lenders agree to restructuring so that funding could be put in place to complete. Now with administration nobody can set on the fence anymore, looking at the other to move first.
If the cornerstones are playing games it may back fire, Vale have just got 2.5 billion from Saudi to invest in copper and nickle. If gelncore think they might be able to shaft PI’s, creditor and the banks the rise in Nickle price might just bite them on the ass
https://www.clearygottlieb.com/news-and-insights/news-listing/vale-in-closing-of-2-5-billion-minority-investment-by-manara-minerals-in-vales-energy-transition-metals-business
LME Nickel
US$21615.00
As they say ‘Timing is everything’, Horizonte unfortunately has missed the boat. Can the administrators get the boat to come back to the port to load up?
Current Nickel price would have given an extra $120m per annum of "free" profit.
An extra $600m of build would have meant a 5 year payback at most.
For a 28 yr. LoM that is an additional $2.6b gross profit, $4b if it was 40 years.
Surely someone will be eying up HZM as a lucrative investment now. Cheap as chips
Now where did I put my wallet, Orion/Glencore?
60m, 20m and 8m volume appeared after suspension
Only fair play, sell the assets and pay according to law of the land
Maybe it is sell off from LM, Orion and the last 4% that Helikon still hold.
Could be that Glencore might be the last big holder., maybe buying up cheap shares.
They are currently $300 m a year better off now that the New Caledonian deal is ended in June/July.
$300m per year for 2 years to complete HZM, lenders to be placated for 2 years, over 51% ownership, some royalties to be paid to other cornerstones, and a massive share dilution to give G a 90+ % holding, thus encorporating HZM into the G empire. As for remaining shareholders, a offer to buy up the last of the shares.Even at 10p per share, it is only £12m to G.
Added to this of course is a new nickel operating mine with bags of upside potential that has fallen into the lap of G.
It is ok everybody, it is just me having a lateral thought. It is raining outside and I was twiddling my thumbs, wondering what to do, haha.
But you never know????