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That RNS was as clear as mud but inflammatory for sure.
To me, it seems like there are a few possible outcomes:
1. Administration, but my question would be why haven't they done that yet or is a deal really coming down to the wire and its a 50/50 outcome?
2. Deal is agreed but Major, major dilution. There's only 250M shares in issue so not a great surprise.
3. Market is manipulated to position for a very cheap buy out.
I'm holding because we'll I'm in it now and averaging 10.9p so you never know.
But something is definitely going on and it's not being openly discussed in the RNS.
Who else is holding and wants to join on this thread? holders or punters only please. Fully appreciate the opposite viewpoint is valid, but would be helpful to have a discussion with this group .
This is exactly what they said they would do in the 1st Mar RNS. They've got 60 days grace now to focus on the negotiations. It's just confirming the action has been completed.
This is a complex process and there will be round the clock discussions going on behind the scenes. Each current and potential investor will have their legal teams working on due diligence and probably inundating the HZM team with questions, paperwork and meetings. They'll be working their socks off behind the scenes so it's not a surprise they haven't announced progress yet, this is a complex situation with multiple moving parts. They need time to get it done.
The $2M debt to the consultants will have been known about for a while and will be accounted for in liabilities. It may be under dispute or is part of the negotiations package. But it's part of the skeletons in the cupboard that the new CEO is having to deal with.
This is going to be a major dilution, that's what I believe they are signalling. I don't believe administration is what any cornerstone wants, so I cannot see that as an outcome. There's just too much value here.
They are still recruiting, they have brought in GMining to get it done. The signals are there for longevity.
The corporate investors are on the sidelines waiting for this to be de-risked. As soon as a funding package is announced this will be very attractive.
40 years of potential revenue which will capitalise on the projected exponential growth of the EV and eVTOL sectors is an extremely attractive prospect, along with the green credentials it brings for portfolio balancing.
It puzzles me that people seem to think banks and investors make decisions on a 2 or 3 year performance analysis/cycle. Most are looking at decades in their strategic planning and investment positioning.
A clichéd quote from the oracle of omaha but still with a kernal of truth:
Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard.
Thinking laterally, it could be argued that the RNS was crafted to:
A. Inform the market of the extension and need for further interim funding (core reason as deadlines were looming).
B. set expectations for a dilution for shareholders and note holders, which some will not be happy with.
C. Help focus the minds of the investors during the negotiation process to try to close the deal.
D. re-establish transparency in the company to regain market trust.
It may well be that they have a deal sketched out but an existing or new investor is not fully onboard yet. Doesn't hurt to remind them of a potential outcome if they don't get onboard.
I rewatched the YouTube video interview with Karim Nasir from Oct 2023 and he definitely knew it would be about a 500M shortfall, the signs are all there in what he says. However, what is worth reiterating is the value that LM places on the project and its potential 40 year life. He is genuinely excited at the prospect. Also, now we know they've brought in GMining we know how serious they are in getting this done. He talks about them in absolute glowing terms.
https://youtu.be/twt9TBsR9tM?si=OlKDS-nuXL2tI_LW
They clearly want this project done and he's very clear on what they want to do and how this fits into their portfolio, even before he stepped up as iCEO.
Worth another listen.
These are my rambing thoughts for what it's worth.
I've just been through a similar situation in the tech industry in a private company context. SMB develops product using PE, debt and government funding. Turns out data they put forward was unreliable, figures inflated, projections unreliable and so on. Felt like it was on the verge of a ponzi scheme due to the constant churning of investors, but had an underlying tangible product so something did actually exist. Owners increasingly backed themselves into a corner until there was no where left to go. Product was sold at firesale to much larger company with deeper pockets who are now making a success of it and projections look really good for them.
What's the point in me telling you this, well two things can be true at the same time. 1. The original management team can completely screw up the numbers, to the point where it appears to be fraudulent. This means they have to go as they can no longer be trusted. 2. the bones of the company can still be good and have huge potential. In the right hands, it's a metaphorically half finished house waiting for completion with a significant profit at the end.
Now, in terms of market investors, its a changing of the guard at the moment. Old investors have understandably lost confidence in the company and are withdrawing their money. They're done, they're out. No longer interested. However, new investors are spotting potential for a bargin and have the confidence to think the new management team are strong enough and experienced enough to pull it off.
Yesterday was like going to the doctor and getting really bad news about your health. Going forward, we start discussing the treatment plan and prognosis.
I'm in and I'm staying in because I believe the RNS gave us the green shoots of a road map to turning this around. Its now in good capable hands, who let's face it are highly motivated to succeed and probably have huge bonus payments riding on it.
Without sounding blasé, $450M is not a huge amount to these cornerstones/banks. And I suspect just as I mentioned above, new investors will be happy to join given the short 18 months timeframe to completion and huge potential. There's a world class team at the healm now ready and able to sort it out.
Yesterday's huge over reaction was a combination of anger towards the previous CEO, short selling triggers and old investors finally throwing in the towel. There's plenty more who will spot an opportunity and pick up a bargin.
Umair020608
Those looking at the bigger picture.
$400m + 18 months lead in time Vs 28 years of nickel production + Vermelho project, strategically positioned to meet the global EV growth wave.
Over the course of 28 years, $400m is not significant to these cornerstones.
Completely agree Hawaii. As I said before, there's no shock here for the new appointees, I suspect they knew the ball park figure.
Better to have realistic figures, a solid road map and investors who can see the big picture.
Long term prospects are excellent, right timing on the Nickel boom/bust cycle and as Lawrence pointed out, production timeline aligns with EV market strategic direction. Global race for high grade nickel is on.
I don't read this as a disaster. I read it as a realistic amount to bring online a world class nickel mine.
The hard part is done, they now know how much they need to raise. I suspect they knew the approximate amount when the new CEO took over. This is exactly why he was chosen. They knew they needed someone who was very experienced and comfortable at managing this size of a funding raise, which is actually very achievable given his track record.
Funding talks will be a lot further along than we think I suspect.
Shorters will batter the price down. Panicked buyers will sell. But come Q2 when the funding package is announced we'll have a clear road map to production and we'll slowly start to climb.
Hold your nerve, it will come good.
I think end of Q1 is probably realistic for a news drop. Week beginning 25th March.
That way, funding solution is ready for deployment in Q2.
But happy for it to land sooner obviously!
Glencore pulling out of Koniambo is good news for HZM. Some might say the stars are aligning, or at least the times lines are.
Glencore issued an ultimatum to Koniambo around Autumn 2023 to make it work by Feb 2024 or they would walk. Interesting how that timeline fits neatly into when the cornerstones effectively started taking the reigns of HZM.
Suspect Glencore got fed up with pouring upto $4Bn into Koniambo and thought we've got much better prospects on the horizon (or should that be Horizonte LOL).
Koniambo has been struggling since 2014, even with the proposed French bailout it wasn't going to work for Glencore.
Suspect this frees up focus for much more lucrative projects in the form of HZM. Good news for HZM I'd say.
Interesting future proofing shift from the Canadians.
https://finance.yahoo.com/news/canadian-miner-plans-1-billion-110000799.html
There was an interesting article about the Darwinian struggle in the nickel industry currently playing out and how it could provide competitive advantage for the survivors. Strongly suspect this is where HZM is being positioned by the cornerstones. I see this current nickel struggle as a huge opportunity but not for the faint hearted.
I'm seriously thinking of topping up again. This price is a bargin and actually the influx of derampers has made me even more confident.
Currently holding 1.26M @10.9p average. If I can get that average lower I'd be very happy.
I'm only trading two companies this year and HZM is a definite portfolio accelerator for me over a 2/3 year hold.
Thank you Strow for the kind acknowledgement 😉
Topped up again, bringing total holding to 1.26M, averaging approximately 10.97p
A real bargain at these levels. RNS will drop and you won't see this price again for dust. The recent spike has shown the appetite for this share on updates.
GLA
Billy,
I also grew up with freedom of speech and have put my life on the line to defend it repeatedly in some very hot and sandy places. Freedom of speech allows people to respectfully ask others not to use language that denigrates or belittles others to get a point across.
I don't agree with what the Publican has assessed the situation to be but I also don't think name slinging or constant mockery of another persons posts appropriate either.
Make your point and let others make theirs.
Before you argue I am the Publican, I can assure you I'm not. I am a woman, very long time investor, veteran and run my own business.
Ranting about transgender, misogyny or political correctness just undermines your points.