Member Info for Bridgedogg1

I agree no one can say for certain what will happen to Nickel prices, but you can reasonably extrapolate the increased demand for EVs, reasonably assume that they will require Nickel and reasonably judge medium term supply by the level of investment in new projects. The view is that by 2025 there will be a supply gap which is expected to widen. Companies and governments are looking to secure supply in these metals and there’s no better time than when the price is low. Companies like BHP and Glencore take the long view, they’ve seen all the price cycles many times. I think our break even is $10k/t and I believe Nickel prices have bottomed out at $17k/t. I also believe the same about the HZM share price but I could be very wrong on both counts.

It’s worth noting the New Caledonia loses A Lot of money due to inefficiency. Glencore want Nickel but of course it needs to be economically viable even in low price environment. With other projects being cancelled the predicted Nickel deficit from 2025 is likely to widen, along with increasing Nickel prices.

Https://nickel.com/news/bhp-to-focus-on-cost-cuts-patient-on-ma/

While lots of money would be made in lithium over the next few years, BHP was not invested in the sector because the long-term margins were not sufficient, but in nickel, BHP expects to eventually become the world’s second biggest producer.

It intends to ramp up to produce 200,000 metric tons a year of nickel, second only to Russia’s Norilsk Nickel with its Australian operations producing 120,000-130,000 tons and its Tanzanian Kabanga operations around 60,000-70,000 tons.

Van Jaarsveld backed BHP’s view that nickel sulphides remain the most attractive ore to own, because conversion costs to higher purities are cheaper than with laterites, despite a steady decline in nickel production costs in Indonesia, the world’s top supplier of nickel from laterite.

He acknowledged this year’s 36% slump in LME nickel prices and said the miner regularly reviews its commodity outlook.

“There has been a lot of (price) volatility and I think there has been more coming out of Indonesia than I think a lot of folks expected. As we sit here today, we haven’t changed our view on nickel,” he said.

John987 joined LSE today. It’s just Contrarian under a different alias. Also filtered.

I understand the project is break even at $10,766/t

The current supply surplus was predicted and included back in the 2018/2021 reports. Base price assumptions were $14,000/t. The financiers know the Nickel price sweet spot starts in 2/3 years but in the mean time there is still enough meat on the bone to payback in around 3 years. This is a world leading cost effective Nickel project. Financing won’t be a problem.

Indonesia are already taking steps to stem the Nickel supply. It would be huge if they added an export tax which is something I’ve seen discussed.

The cornerstone investor's don’t want an equity raise. 50% dilution would only raise £25m! Where’s the rest coming from? If they did raise £25m then they would have to buy in to maintain their stake and someone else gets 20% for peanuts. No way they are going to allow that. Still the question of where the other £100m comes from.

I think it has to be a royalty deal with La Mancha or a Glencore or Glencore/La Mancha buyout. Nickel prices will be low next year should then pick up. This is a low operating cost mine and Glencore will be looking to secure the off take over the long term.

I think you are very wrong about ESG. Currently most of the demand for Nickel comes from China, much of that is for stainless steel. They own the smelters and do their usual thing of generating over supply which dived the Nickel price. They don’t care about ESG. However in the west companies like Tesla are refusing to buy from the Indonesia suppliers, instead signing with Brazil and some US nickel producers. The reason for this is ESG. As EV production in the west ramps up the demand for responsible mined Nickel will increase. Companies know that customers buying electric vehicles are much more ESG conscious and don’t want them manufactured with components from big polluting mines that are cutting down rainforests, poisoning rivers and putting people to work in horrible conditions like in Indonesia. I’m not saying it the only reason for finance. Primarily the mine has to make business sense, which it does, with great expansion opportunities, highly efficient with low costs. That’s the main driver. I’m just saying that over supply from Indonesia should not be a reason to not finance because ultimately it will be differentiated. Check the introduction of the Nickel Mark in 2022. This sort of thing is even more important in Europe than it is in the US.

Good luck holders

I don’t see anything surprising in the RNS and a frankly very surprised by the SP reaction. Were some thinking they were going to be more positive after the rest of the industry have been reporting issue? In fact I think the lack of M&A payments and potential buybacks for next year were fairly positive. I can. Seemed as though this had bottomed out but now I can’t see this doing much but drifting until the next results.

The ‘BOD’ have been very active, growing the company through acquisition as well as positioning for potential strong organic growth. The economic downturn has been really poorly timed and I guess the question is should they have done more to cut back or continued regardless as the seem to have done. Time will tell for LTH

Https://www.cruxinvestor.com/posts/nickel-price-rangebound-but-strong-demand-growth-in-q1-24

A fairly bullish article on Nickel prices. Interesting that Indonesia could be announcing a pricing mechanism as early as this month that could reduce supply.

So you’ve been posting daily on here for months when not invested just for amusement? Also fir opportunity for a quick scalp, but then when it happened you missed it? Sounds like time well spent. You know we will all die at some point?

What I don’t understand about contrarian is if you’ve shorted from 130 to 75 why are you still here posting more than anyone else? Can’t you see that’s a bit strange? I can only assume you are now looking to buy in which means your posts have no credibility.

You did say “I will chip in with my conspiratorial views. This is no incompetence. This is a great resource and all of this has been engineered so that one of the big players picks it up on the cheap. My belief is that this was always the plan. Happens all the time.”

Imagine spending your time posting on 2 shares you don’t own, with no effect. I know my post don’t have any impact on the price but atleast I’m a holder.

Looks like most of the sub 20p sellers are out.

Most of Indonesias Nickel in under rainforest and they have old style mining which produces toxic waste and are powered by coal fired power stations. Our ESG credentials will be key in securing financing as the end product is more desirable to companies such as EV makers with green credentials of their own.

“Indonesia’s nickel business is concentrated in Sulawesi, where Chinese company Tsingshan runs the Indonesia Morowali Industrial Park (IMIP), a hub of nickel processing set up for the stainless steel industry. While large Chinese companies dominate processing, they are fed cheap ore by hundreds of smaller, mostly Indonesian-owned mines that dot the rainforest.”

“In two recent reports published through AEER and the Rosa Luxemburg Foundation, Rushdi and other researchers highlighted the dangers of deforestation and flooding, as well as labour conditions that push workers into long hours companies are sometimes reluctant to properly compensate.”

Some analysts believe the supply issues could start feeding through to global nickel prices. Citi turned from bearish to neutral, predicting that prices could rise to $20,000 per tonne, up from $18,100 at present, on supply constraints.

“Risks to Indonesian nickel supply are growing due to ore grade depletion, regulatory scrutiny, mining quota issuance delays, rising pressure to address ESG concerns [and] the lower price environment,” the US bank’s analysts wrote in a report. They suggested Indonesia might also use its dominance of global nickel production to reduce supply to push up prices.”

“Reserves of high-grade nickel ore in top producer Indonesia may be depleted in around six years, a miners’ association has warned, risking shortages of the material used to make stainless steel.”

“With such a huge global dependency on supply from the country there is a risk this emboldens Indonesia to exercise its dominant position to behave like a de-facto swing producer by taking actions to constrain supply,” Citi added.

“This risk increases in a lower-price environment.”

I understand that some are looking for a trade from 15p but given the chance of this moving up rapidly to 30-40-50p even without funding I’m not sure the 3p difference is worth missing out on.

This feels primed for a good rise even without an RNS.

I’m not sure the board are incompetent. They bought an asset with £300m spent for £7m. Then got a great financing package. Unfortunately interest rates and inflation are running high and there’s been an issue with a supplier. What else should they have done?

Actually ESG is very important for institutional investors. “ESG-focused institutional investment seen soaring 84% to US$33.9 trillion in 2026”

If an ESG fund was looking to buy exposure to mining and/or Nickel/cobalt clean tech metals etc. then it would look at best in class ESG ratings. Ofcourse out mcap needs to be much higher to get on the radar but bodes well for future institutional investment.