RE: Looking at buying here18 Jul 2020 12:17
There is a NPV slider on HZM website that you can change the Nickel price. However there are not many analysts/long term projections at $13k and that is what those invested would look for long term. You could take $13k as worst case scenario to risk assess. In downturns look to be invested in a 'low cost, lower quartile' producer to stay in profit when others can't. Keeps a banks/investors money risked.
Even if stainless steel demand flattens or falls slightly and some more mines come online/expand, as EVs kick off more class 1 nickel will be pulled from the stainless pool. This is ignoring Vermelho for a moment, nickel supply in the stainless pool becomes lower because of EVs. If the supply of class 1 can't match demand after pulling supply from stainless pool, then a premium will be sought for class 1 and then Vermelho starts to look more attractive. Its not well valued now because of 3 things. 1. It still has a fair bit to be spent on it to get to BFS 2. It is not as easy as a sulphate mine, because HPAL 3. Hockey stick in EVs not there yet.
Mitigatations to that.....1. EVs are COMING 2.we either get a partner and costs/speed to BFS is greatly improved or we just get there through development of Araguaia 3. The world WILL have to go HPAL as not enough Sulphate supply, technology has improved and we are low cost, investment will come to the lowest cost in a mining friendly region with ethical supply.