The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Might want to look at mallee resources on asx;
https://malleeresources.com.au/investors/announcements/
Gives an idea of where broker target likely comes from. They had a 'funding gap' and couldn't get shareholders to agree to an equity raise. Now it's in administration pending a sale.....
So, we know cannacord & peel hunt think placing, which seems pretty industry standard.
Glencore are the offtake partner, tungsten west, have, got offtake partner loans along with other companies in the past so wouldn't necessarily rule this out as at least a portion.
Bridging loan is off the table given the high interest and fast payback demand.
Any other thoughts?
Where does billy get £10 from? According to glencore, last q saw a 10% decrease to lme prices for ferronickel and the company will need to repay over $60m per year just for phase 1, for 7 years. Given expenses above cash cost, like sustaining capex, and the debt it's hard to see from my perspective how the company will do more than pay it's debt given nickel price trajectory. If people still expect the company to fund A2 from fcf they are probably just narrative following from company aspirations. And we know how trustworthy the words are coming from the executives mouths are don't we!
If you were going to buy here, you would sit on the bid price or lower to stop market makers moving up the price & making you buy higher. Especially in an environment lacking buying momentum. Think about it.
?! Doesn't FID come soon after FEED?
Or are Navitas just paying people to do a FEED they don't intend to do anything with for some reason?
Could the FEED study add more value to their shares on their next option payment dates for example?
I agree with the statement that it's taking a long time, how long have the 'dream-team' been working (sleeping) on it now?
NPI mine which Anglo American owns in Brazil. Seems to be mining 1.4% ore & is a rkef operation, 40kt, costing 1.9Bn$.
Production cost of 12320/t Nickel on a pre royalty basis.
https://miningdataonline.com/property/550/Barro-Alto-Mine.aspx#Reserves
30% wind powered effectively;
https://www.windpowermonthly.com/article/1687861/mining-giant-signs-record-deal-brazilian-wind-power
Crude calculation; HZM having 20% higher grade, being 20% lower costs = 9856$/t
https://www.londonstockexchange.com/news-article/AAL/anglo-american-q3-production-report/16178779
to be honest i saw the shares go from expensive to what i thought were stupidly cheap and just thought i had to buy some. now, after a week of research, i can see the indonesian government is funding nickel projects @ 2 & 3% and banning raw ore exports to gain jobs, with possibly a glut in the market coming. now, looking back to 2015, the bear market, prices went as low as the average cost of production, losing loads of companies like vale, bhp and glencore loads of money and making tenshing no money.
i was hoping to see other investors actually do cashflow analyses about the actual viability of operations and the like but most can't get past ******** about funding. what can i say? the asset looks good although for a long term investment i need to believe the company can address it's long term debt which starts at 22.5m$ a qtr in q2 2025. again, most people can't get passed the near term funding stage. is that part of the 'code' or something?
Picked peck, you seem to think the big boys aren't interested in pumping in equity?
Based on my research, large companies stake 'stakes' in small companies projects as a means to take stakes in large projects with less risk;
Imagine being a contractor getting contracts with glencore? You would make sure costs go up even higher to profit even more, right? Happens to the govt. all the time. So as a small company on limited capital, things get done cheaper.
Then, as the 'dreaded' cost overruns inevitably come; you take more equity at a lower valuation.
Rinse & repeat! Obviously this is the stage where a takeover would usually happen but la mancha are here, Orion too so as far as I can see, equity is the only option. Glencore will probably come into the picture more down the line though as I speculatively expect them to capitalise line 2.
I'm not 'up' on takeover law but I do think the board could still legally agree with the top 3 shareholders for 20M each;
A takeover bid of 20p if Orion, La Muncher & Glencore all get equity prefference would need to be made although wouldn't get accepted? Takeover bid law is as follows;
Should a bidder breach the 30% threshold, it will generally be required to make a mandatory takeover offer for all the shares it
does not own. Such offers must be for all cash or have an all cash alternative at a price at least equal to the highest price paid
for shares in the previous 12 months. Such offers may only be subject to a limited a number of conditions which are set out in
the Takeover Code and which usually make a mandatory offer unattractive to a bidder
Https://www.dailymail.co.uk/news/article-12660447/Argentina-presidential-election-runoff-Javier-Milei.html
So, it looks like the polls were wrong & we won't get our guy after all? Fancy voting for a man who's main policy is facilitating hyperinflation. Perhaps enough people just use the cash dollar, or have usd transacting card readers in their shops to not care hey?
Correct, however under the circumstances, I don't see why the company is going ahead with the vermehlo study on borrowed finances, funding should end up @ c/ 60M$+.
Also, there is a baloon payment to Orion of 5M on first production, then roughly 22.5M to pay the lenders in q2 2025 and basically every subsequent Qtr thereafter, or about 1500$ on every ton produced(although matte & npi have different pricing), for 7 years if the company keep to minimum payments...... Also, stockpiled ore being 1.9%, there should be a 10% increase in 10 year average production to kickstart the mine.
430 spent, 93 in bank plus 130 undrawn = 653!
Who thinks they need 250m?
Judging by the share price, the pointless at this point vermelho capex spend should be curtailed to save costs & 'the cornerstone shareholders' will likely foot the rest, with a token amount available for retail like last time.
So, 1 for 1 share issue in other words, with the big boys at the front of the que. Project payback 7 years with line 2 needing a further equity investment, if the 'cornerstone shareholders' with the voting power ask for it before the company can address enough of it's existing debt to afford the interest payments.
Where does this 200-250m funding need come from?! It clearly stated in the RNS available illiquidity the company is able to draw once the 'gap' is filled I think. There was an initial 100m$ extra funding than forecast secured from the banks and 25M$ cost overrun from Orion. The gap, assuming full debt drawdown at 35% is 60m$. 200m$ implies they won't be able to draw more debt.....
Coal is up over 20% on long term forecast, wages have inflated over 10% according to trading economics, debt is averaging 10% now at floating rates and diesel is up (I used oil) 40% from long term forecasts used in fesability. Average industry costs must be 4.7$ l/b at least, may look expensive to you but it's an industry wide cost inflation. That's why I used long term nickel price of 16k. Nobody would build a mine on anything less today.