The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Debt drawdown is scheduled for November, the General meeting is on Friday 4th to approve the extra equity needed to satisfy the banks recent cost to complete (through to full production) exercise. This is a significant catalyst in itself and in theory is the final hurdle to when the banks commit their money. The finance deal was binding subject to agreed conditions being met.
The Senior Debt Facility
Tranche A of US$146.2 million
Tranche B of US$200 million
The company has more than 40p/share in cash and 4m tonnes of Nickel its preparing to take out of the ground, production slated for Q1 2024 is 14 months away not 24, I am just talking facts not pure negative speculation.
When tranche 1 of debt drawdown completes in November, given the due diligence the banks will have completed I would be very surprised if we do not see a sharp change in trend of share price following the announcement. Its a key signal of the strength of the project when they hand over many millions of $.
From previous news flow we know the banks insisted on the equity raise given the cost to complete forecast using there own assumptions resulting in the $70m potential gap. Hopefully all other conditions are fulfilled.
This was my favoured element of the update as we anticipated the rest was coming.
"Environmental licencing for Vermelho is well advanced, with key regulatory submissions, forming the basis for the construction licence issuance, expected to be made prior to year-end"
It will carry little to no value in terms of potential transacting on as an asset until it has Environmental permitting, so this is an important little comment. Seems like plenty going on behind the scenes on Vermelho.
Good summary Baggy, that's pretty much the way I see it.
None the less the dilution is a sore one albeit against a far higher NPV, so basically what I invested into is still intact but some upside has gone in order to keep the show on the road. Failure to build Araguaia is not an option I like
I hadn't spotted the date toggle on top left area to flick through the various satellite images by date, that's quite handy.
Its coming on well, earth works look complete and concrete looks like it is being poured. I think a concrete making facility has been constructed on site due to the volumes involved.
Looking forward to the update - its a very good time to refresh investor confidence
Jeez. Time for a fresh thread.
Nothing concrete bit I think the FS process will have started by now but the near term priority was Araguaia, sort of no point splitting resources and slowing up Araguaia. I imagine Vermelho will need a full project team of its own and I recall the timeline was around 24m to complete the work, so nothing due anytime soon with an outcome of the DFS.
That said I do get the feeling news is overdue on Vermelho, its been too quiet for too long.
While on the subject I thought this was worthy of a read.
https://www.abc.net.au/news/science/2022-09-08/toyota-ranked-last-car-manufacturers-climate-change-performance/101391528
Interesting comments from Glencore in amongst the general story.
https://www.abc.net.au/news/2022-08-25/can-lucky-country-australia-become-a-battery-mineral-superpower/101358050
Glencore have been steadily increasing their stake for some time, done in big lumps. Interestingly when they sold their part of the Araguaia asset to HZM several years back they took HZM paper and not cash, this was what made me look at HZM in the first place. Vale for comparison took only cash for Vermelho and no stock.
I expect at a key point going forward Glencore will inevitably show their hand. They are not short of a bob or two right now that's for sure.
Yes, unusual amount of uncrossed trades at mid price also. Smoke and mirrors type effect and you can never clearly tell whats actually happening as on the face of it its a reasonably strong buying day in % terms yet the price didn't move up and it actually went down then back up to breakeven.
Every day now is a day nearer production- that's the most important thing as the SP will correct at some point to better reflect the project NPV.
Being at just north of 5p in old money is ridiculous really but given the current market jitters perhaps the market is waiting for confirmation from HZM that project timing is on plan and spend forecast is within the existing project financing and that it wont be returning to the market for further funds.
I have heard that Hedge funds have been selling down and short selling on live construction projects in the belief that they will be caught in the inflation trap and need to raise more funds, therefore getting back in at a much lower price
Another Tier one supply contract in place which is good to see.
The full update in September will be interesting and at some point we have to begin to lift out of the doldrums...surely...
Yup, although investment case remains the same and we have seen this before. Not selling a bean here. Sat tight. Typical market over reaction and the lemming effect. Glencore bought 5% very recently at 7.3p in old money so £1.40 odd. You can now buy at just above 5p in old money. Outstanding bargain in my view.
indeed, previous day was 3m in old money.
https://www.mining.com/glencore-suspends-production-at-raglan-mine-in-nunavik-after-workers-strike/
Impressive gtd price/market size from MM`s at 2000 shares, lol.
Nickel pricing looking very strong rest of year says Goldman, expect it to decline in 2023. Let’s see how accurate they are. Everyone got it wrong this year…anywhere north of $20k will do us very nicely here.
https://www.mining.com/web/goldman-says-bull-market-in-battery-metals-is-finished-for-now/
https://www.mining.com/horizonte-kicks-off-construction-of-nickel-mine-in-brazil/
Good to see the news of progress is getting out there.
Couldn't agree more. Holding tight and adding.
Interesting to note the switch to USD financial reporting. This will be of interest to many more investors out there as USD/ GBP exchange rate movements are eliminated from results and future returns. My own view is this is a door opener to a more USD focussed investor client base.