RE: Horizonte Minerals30 Oct 2018 19:01
Of course it’s going to pose a serious hurdle, as others have already said though this is a perfectly normal situation for a junior miner - certainly not the case that the only way anything will happen from here is via a takeover (although they may well look at selling the asset now that they have significantly de-risked the project). Other options they’ll be looking at would include a debt/equity arrangement and strategic investment/offtake arrangement, or maybe a mix of the above?
More concerning for me than the (relatively) tiny Mcap was the fact that the capex cost is higher than the NPV of the mine... to be fair to HZM they are doing all they can to sell the project on the basis of where the nickel market is going (other projects going offline short-medium term, little ‘new’ competition, certainly in the timeframe HZM are working to, significantly higher demand over the medium term).
For all their efforts though the fact remains that the nickel price is not where they want it to be, and that is one of the fundamental drivers here.