Member Info for hedgeman

G.S. assuming they can get the plant running 5 to 6 days a week.. and achieve reasonsble grades what's your view on economics... revenue & ebitda (ie cash) per month? Presume 60% of that to cra?

Given long life to repay debt and other deposits presume equity worth a decent multiple of the ebitda/Cash?

'What'll it take'...Cash flow speaks loud in current market... once significant cash flow is a future certainty will move higher... until then I doubt it..... Greenland assets will take years to get anywhere near production...if indeed even possible... needs the oil assets to come on stream.... not far away.

I liked pg pres at o&g show. Can see he's a good operator. Disappointed it was cut short and v.limited q&a.
Obviously pilot is key to set parameters of what's possible.
Main issue for me is how economics stack up with sensitivity to oil price.... although pg looks and sounds to me like someone who's pretty conservative so I suspect more headroom on oil price than disclosed.
Cash available through to results of pilot ...big tick in the box.

V good to see, and confirms no need for placing....but can't rely on pqe, after all can buy direct if want... focus must be on myn producing

https://af.reuters.com/article/metalsNews/idAFL3N1VY5LN

I know rumours (no proof) of Ni stockpiling but another few months of inventory drawdown and I think we'll see strong move up in Ni price.... let's see.... price back to $14k+ will improve sentiment dramatically....

Icepick....can you sell pls...might be my only chance lol.

I think most of us in around 4p.

Assuming hzm take this forward (as opposed to a buyout) JM must not raise the equity part of the finance below the 4p level.... any equity raise for the project MUST be at pre FS price.....if needs be .can sweeten it with warrants etc.... but MUST be at 4p+ or the dilution will be difficult for all those shareholders that have stuck with it. Personally with current small m.cap and some cash no debt..I dont see why this cant be insisted on as new equity dwarfs current m.cap. Anyone speaking to company needs to reinforce this.

Qualia, thanks for that. I couldn't make the call - anyone ask what is the the key question for me.... what's minimum price for the equity portion of any financing?!

One thing I would say is the reputational stakes for CW couldn't be much higher given his role here over an extended period and the very public criticism he's faced .... he could go a long way to silencing his critics if he can sort this out, get the assets all accessible and working and bopd to that 300 target in short order.....can you prove them wrong Charlie?

Good article.... no mention yet...but any reduction in corporate tax rates a la trump would increase IRR/returns.

https://www.lundingold.com/en/investors/corporate-presentations-and-videos/
Shows the financing structure EF set up for Lundin.... a much more complex project, higher capex, lower IRR even with lower discount rate....v interesting.

Strider, most of those 'rabbiting on' ... Prob no FS, just explorers with a few holes in the ground.
This is how the top guy in the industry at Vale is thinking...5 days ago.....
https://www.metalbulletin.com/Article/3840557/Vale-expects-completely-different-base-metals-division-by-2020.html

If you think about 60,000 tonnes per year [of nickel produced by VNC] and a price of $18,000-20,000 per tonne in 2020, you will understand the opportunities

Sitting tight. ...asset is good quality, FS is good quality and derisks the project...economics will be significantly enhanced by 2nd rkef...boils down to nickel market sentiment and actual spot Ni price....any further depletion in stocks and improvement in China US trade dispute will c ni price sharply higher imo.

Of course financing is an issue - always is .... but it's unlikely Hzm will take this to production....they have to talk about financing and doing it themselves but it's not likely. This is perfectly normal.

What it boils down to is the quality of the asset, the 'believability' of the FS, how compelling the proposition is and importantly if there is competition/high demand for the assets.

$400m capex + another $120m(?) or so for a second RKEF line is not huge for the bigger miners ...I imagine a few will be interested in a 29,000t+ state of the art / low production cost asset in Brazil that's going to knock out $400m+ of revenue pa in 3 years time. After all .... mining it's what they do ... they need future production. AND they also get the opportunity of further development through Vermehlo.

Hard to with the experience on the Hzm BoD and with the their major shareholders that they have got to here without knowing they have significant interest.....and nothing has effectively changed in the project ... if anything upside is greater.

All comes down to belief in the ni price.. but I hope hzm don't delay in making it clear what the financials look like at $14 - $16k ni with 2 rkef lines.... I reckon that's well over $200m pa profit at top end....
...they really should have relaxed the PEA with the FS imo. The FS was adjusted specifically for this 2nd PEA..... need to get it out pronto.

It's an interesting article but not sure it is the/a problem....these plants are still expensive .....so even if it works and uses more readily available class 2 nickel....it needs price over $14,000 (at least)... and it doesn't increase overall nickel supply for stainless steel market....if anything it reduces it... might have impact on economics of Vermehlo and the long term incentive price for battery grade nickel.

Imo nickel price, metals prices being influenced by strong us$ and China us trade dispute.

Share price will recover significantly on
1) increase in spot nickel price... not really relevant given when 1st production is.... but nevertheless important for sentiment
2) PEA for 2nd production line which will be huge up lift in NPV if in from start....key for major looking for scale.

DYOR.

They've got a point but they miss the big upside and key point in the strategy imo.
The plan is to make hzm attractive to a strategic partner/ major miner... by putting in a 2nd production line from the start....PEA in q4 for this.... this will result in large NPV and IRR increases.... 2x revenue but less than half additional capex and I imagine even lower c1 costs. I imagine will put irr over 30% and make it a scale that's attractive to a major nickel miner.

Not feasible for Hzm to finance from start.... but for a major mining company no problem.

The reasons this has current market cap are:-
1) Previous disappointments (was meant to be b/even cash flow in July).
2) Output not been demonstrated to be at level required to generate positive cash flow - due to breakdowns
3) Combined with 2 - ore quality
4) Significant debt - leaves doubt about going concern basis.
1 - 4 meant large holders sold down / exited.

Positive news on operating sustainably above b/even cash flow deals with all 4 issues and will see the share price re-rate....3p+?
Actually perform for a sustained period and get towards nameplate capacity then 5 - 10p?
Finance and build a DMS to double nameplate capacity and will be much higher still.

Let's see.....Kevin has a lot at stake!

Proactive investors interview with JM is v good.

Disappointing SP move today - probably due to
1) Spot nickel price
2) Economics pitched at $14,000 Ni price (was $12,000 in the PEA)
3) Lack of patience of a lot of traders who bought in for the FS result
4) Size of investment required $400m to build
5) No specific financing news

However, imo huge opportunity from here. What I like about the opportunity right now is the likelihood of a strategic partner (or buyer).

JM has emphasized in every interview the scale-ability and the possibility to extend mine life - this is what the majors require. He talks of a company producing over 50,000t pa. He's definitely selling this to the bigger players .....that's the strategy and it's why the FS was delayed.....emphasis on scale-ability. Next news dovetail with that strategy...... following on pretty quickly is PEA of 2nd production line (revenue x 2 for Araguaia, big NPV uplift) and Vermehlo PEA .... scale!

If the big players think nickel is heading significantly higher then one will snap this up before financing is finalised imo. They'll put in 2 production lines doubling revenue and then bring Vermehlo online - my guess is that's a huge potential total NPV fom HZM ... well over $1bn - not too many projects where they can get that.

They are almost in a place to make that decision....

- FS for Araguaia now published
- PEA for the second production line (q4 2018)
- Final construction permit for Araguaia q1 2019
- Vermehlo PEA early 2019.

My guess is this is bought out once construction license is granted somewhere in the 8p - 15p range.....may not have to wait too long.

DYOR.