Member Info for Lottohopes

The warrants got extended by 6 months, up-to Dec end 2019. So obviously they hope to get beyond 35p, to cash those warrants comfortably.

Having held patiently for a long time, it’s rather heartening to see this update. The technical issues at the mine have been addressed. The ore being extracted is of a very good grade. A rough calculation shows that ore will produce 1141 tonnes high grade copper conc. Roughly £5.075m value within the first month of reopening.

Note the first concentrate was produced BEFORE underground blasting. So it was produced from existing stockpile of ore. There is ramp up due. Then exploration in new properties. Drilling to infill and update ore into reserves. So much news flow. I d rather they become fully operational and share some numbers with market, work up sentiment before relist. The C1 copper cost matters and this will be the cherry (broker mentioned it was sub $2/lb). Having waited this long in a vacuum is different from waiting now. Because we know copper is being produced. All just my two pence. DYOR

Rooky: the tech here has been endorsed by ORE via a trial in 2018; ORE as you may well know provide world class facilities and skilled staff towards trials in the renewable space (500m+ invested at facilities). They described GyroMetric tech as a “game changer”. Presently at-least 2 wind turbine majors are examining the tech, with one imminently starting a trial (with gyrometric kit in their own turbines). So one trial is due at the ORE facility, and another at the turbine company’s own facility. Confidentiality agreements prevent these from being publicised. Everyone’s got to do their reading and buy/sell as per risk appetite :) Good luck

Welcome Rooky. It’s been tweeted by GyroMetric, so just a copy and paste job. The sectors and applications where GyroMetric tech can be utilised are truly limitless. Drives are ubiquitous. As these trials produce results, these large companies will consider fleet adoption. Gyrometric offers “active monitoring”, so the kit can change gears, cut power to a motor/pump/drive within milliseconds, thereby saving equipment from damage, optimising output etc. This active monitoring is much more efficient than the current “passive” monitoring, where an engineer has to go out into high seas (turbines need weeks to plan a visit) or remote power facilities. Huge savings to cost, much faster, keeps kit productive, reduced risk to human life etc.

Note the recent GyroMetric update spoke about oil and gas pumps, marine diesels (adoption by upto 900 ships) etc. This is all a side dish to the main attraction of course: adoption by wind giants like Siemens and GE. Market wants revenue in black and white: that’s going to take a little longer, but the foundation stones are being laid. All my two pence opinion. Please DYOR.

Few comments, again sheer opinion, probably uninformed :)
We must be carefully considering whether it’s worth building out Araguaia ourselves OR letting a major partner it. The question is: we are in commodities which are inevitably cyclical and our moment in the spotlight is coming. So should we have the full 29ktpa production in which we keep say 30-40%, and let the major run with attendant execution risks? Or keep upside by going to production ourselves but only 14.5ktpa. Logically a smaller piece of a bigger pie is equal to a bigger piece of a smaller pie. (Can you tell I m starving waiting for the chicken to finish?!)

Secondly, imo giving up control of Araguaia is possible at project level, and doesn’t necessarily mean losing equal slice of Vermelho. The latter should be retained as a separate project and different upside.

My own impression from the interview was that they know exactly which route/s they will take, that it was posturing to say all the options are open so to speak (esp in the background of a strengthening Ni market) and JM was not willing to give away their strategy, which is only fair. He didn’t look worried in the least, and gently deflected any incisive questions (at times I felt the interviewer was trying too hard to ruffle his feathers).

On the comment by Wolfie, that Araguaia might get sold to develop Vermelho, I politely disagree. Because JM has always said the steel industry and FeNi demand is what is robust, predictable and a money maker at the moment. It’s the most advanced project, 12 months into financing discussions. (Endeavour was appointed Oct end 2018). So in that sense Araguaia is the bread and butter project. Him and the CFO have referred to a partner taking a major stake to progress the project. Personally I think this is very likely. When pressed about having two projects and not being to progress both, and CRUX asked if Vermelho would come later in the pipeline, JM said “no” quite emphatically. He referred to the window period and that both projects were a “go”. So my two pence is still: full 29ktpa project at Araguaia with a partner taking controlling stake, and Vermelho PFS with/followed shortly by offtake type news for the battery product. In summary, the Ni market turning is great timing and they will be keen to capitalise on it ASAP. All speculation but fun all the same. DYOR

https://gyrometric.systems/gyrometric-systems-distributed-power-generation/

The sectors and applications are wide and varied. At some point, some of these opportunities will crystallise into recurring revenue imo. Please DYOR.

Wasarunner: essentially the most superficial few metres is limonite ore, this being suitable for acid leaching and battery grade solution. The deeper saprolite requires pyrometallurgy ie RKEF.

If you look at the map and truck/mill diagrams in the HZM presentation: it shows trucking ore from Araguaia north TOWARDS south. It also shows ore going from Araguaia north TOWARDS Vermelho (this is the limonite). But it doesn’t show ore moving from Vermelho towards Araguaia. The RKEF facility ie planned processing facility is at Araguaia South.

Agreed they talk about the distance between Araguaia north and Vermelho being 85km. However there is a significant distance between Araguaia north and South. So the question to ask is: should we truck the saprolite from Vermelho (this is the highest grade of the lot), all the way to Araguaia South? That too AFTER the facility is built in 3-4 years? OR use the Onca Puma RKEF facility which is readily available and less than 20 km away (from what I remember) ? I m sure the numbers are being worked out. My naive thinking says: if Vermelho can actually contribute to REVENUE, whilst we wait for Araguaia to come online, and Vale (who understand Vermelho AND own Onca Puma) are willing to help, it’s a win win. I know nothing about how the synergy would work. All speculation. Please DYOR :)

Wasarunner: I doubt they will sell Vermelho upside, as battery market Ni is just at fledgling stage. There may be other options. For ex: they could move the (FeNi) ore to Onca Puma (where I believe there may be some spare capacity in the RKEF, could be wrong). So they could store the limonite ore, send the high grade saprolite to Onca Puma (which I understand is certainly a shorter distance than Araguaia (Araguaia and vermelho are some 180km apart from what I vaguely remember). Later, they could build out the acid leaching unit, use the stored ore and we would have both sought after Ni products :) imho only. Please DYOR

https://twitter.com/GyrometricS/status/1182312893548765187?s=20Tunstead is considered of “national strategic importance” and produces a million tonnes cement annually. CRH, the parent co is a FTSE100 Co. If this is a pilot type arrangement and proves beneficial, it may open doors to the rest of their industrial applications/locations. My opinion only. Please DYOR.

My understanding is they paid 2m in one go (when they raised) although it was due within second anniversary.

Evening folks :) The main market for our Nickel at-least from Araguaia ,will be the steel industry. This is growing in low single digits but has been steady. I am also interested in the question: will the pursuit of lighter weight materials (carbon fibre reinforced plastic CFRP, aluminium etc) lead to steel being DISPLACED as material of choice in the EV vs current ICE vehicle. Because theoretically this might counter balance the increased Nickel demand on the battery side.

Good news. Conclusion from my reading: steel dominates and the industry is firmly of the opinion that it will continue to dominate, even in electric vehicle builds. Reasons include the strength of steel based materials, ease of recycling, lower carbon footprint (aluminium has about 4 times as much green house gas footprint during production, CFRP has nearly 6 times as steel).

So batteries will not necessarily need to get bigger or the EVs to get lighter. Charging points will increase astronomically and more creative ways of charging will appear. Cost parity is key to adoption, as subsidies reduce and become nil eventually, and steel being cheaper will remain essential. Note the Tesla 3 which is cheaper priced (than other Tesla counterparts) and aimed at mass adoption is steel based, whilst the higher end Tesla’s are of composite materials/Aluminium. Life cycle assessment of costs comparison is essential (between a traditional vehicle and an EV). Steel in both (EVs and ICE vehicle) gives a favourable out come to the final environmental impact. All in all Nickel demand is mainly driven by the steel industry and this demand remains steady and reasonably resilient so far to economic head winds. Battery demand is the chocolate icing on top. Above just my two pence. Please DYOR.

Wasarunner: Spain, Germany and the U.K. are moving gradually towards renewable energy, as an important component of their longer term energy solutions. Wind and solar feature in these plans. (Personally I m biased towards these vs nuclear). Spain has recently decided to (eventually) shut down all 7 nuclear plants. Huge costs (anywhere from 99-232billion) and time frames (75 to 120 years) for nuclear facility decommissioning in the U.K. (Magnox inquiry controversy highlights how messy things got). The NDA (Nuclear decommissioning Authority) stating we will be decommissioning well into the 22nd century, and we aren’t really clear about costs. So I think nuclear energy has a definite role, but public/political sentiment currently says it’s not going to get scaled up in the more mature economies. France is Europe’s nuclear energy showcase, but they too are scaling down, talking about decommissioning and switching to renewables. Of course countries like China and India are adopting nuclear, so there is appetite for cake for sure. I think for us HZM holders, big capacity batteries might eventually help stabilise grids/power supply and store it. Apologies for going off topic folks :)

Wasarunner: on the topic of jurisdiction, absolutely important to read up and more importantly keep a hand on the pulse. Political developments, policy change, local news etc. It’s near impossible for PIs to monitor all of this. But Orion as you say, have done a lot of diligence before committing here. I see the finance package as a jigsaw puzzle, and individual pieces are being found. However, as the Orion guy commented (in that mine financing round table discussion I posted), there has to be a chunk of equity/cash from another party, for Orion to put together the remaining 75-80%. And it’s here that the Majors and institutions will look to preserve their stakes (by participating in the raise imo). Potentially a new major such as Vale might enter the register too. I think it’s this ability to raise cash/equity, that creates the risk, and why we are still at 4-5p. I m certain some are spooked by Sirius failing to raise. A Sirius type struggle with funding is highly unlikely due to the share structure (Sirius didn’t have such heavy hitter majors on its register). Nor does it have a hot commodity such as Ni. Huge engineering risks at Sirius project whilst our project is much simpler, and based on tech that is well tried/established. Capex at Sirius was in billions, whilst our equity raise will be a maximum of £155m (35% of 443m), very likely smaller due to cash coming in from pre production streams, savings on cost sheets etc.

Jurisdiction wise, Brazil is a good destination for mining, especially the district in which our projects are situated. Great synergies with Vale who have several projects there. Main concerns have been tailing dams collapsing, water contamination and related fears. This is not relevant for Araguaia. Also why I believe HZM is carefully considering its own actions, and yesterdays appointment is key too. Politically, the new govt is focussed on mining and keen to develop the sector further. The economy needs it. Infrastructure development which had faltered is being rejuvenated. New areas are being marked for auction (20,000+ areas planned for this year).

Orion is not the kind of investor group that would enter any high risk jurisdictions. (You may have heard Phillip dismiss the DRC). Incidentally, they financed the FDN mine in Ecuador, a jurisdiction with higher risk than Brazil (at the point of Orion entering). The project was bigger than this one. All in all, the risk reward is tilting towards full financing package in place by end of Q1 20, possibly sooner. As the puzzle gets assembled piece by piece, investors will bring their money in. Imho only. Please DYOR.

Wasarunner: all valid points, esp ref “entry price” which is impossible to time perfectly, except in hind sight. The economics here are extremely robust, even in dire Ni market conditions. The “break even” analysis in the Araguaia Feasibility Study (page 320 of 347), states $9,750/t for net cash flow brought to $0, and $10,766/t for NPV8. These numbers are well below the average Ni price over last decade plus. Secondly Indonesia produced over 20% of global Ni last year: this vacuum will affect on supply side. PNG and Philippines issues will not help supply either.

I like the fact that JM is balanced and tends not to get rampy, despite there being several reasons to get excited. The demand for Araguaia FeNi30 is from the steel industry, which is growing steadily, unexciting but essential as the world industrialises. A portion of Class 1 will face a tug of war between battery market and steel demand. Especially as NPI and FeNi supplies choke, from countries like Indonesia and Philippines. Just my two pence. At the end of the day, only one’s own diligence gives one conviction to hold, especially commodity shares, where gains and losses are cyclical and often huge. Given share holders here have had pain for 5+ years, I see a reversal of fortunes ahead. Please DYOR.

I think today’s appointment sends a clear signal that HZM has started assembling the construction team in earnest. So I imagine there must be some who had felt a buyout would occur (in this window), selling out. JM has stated that buyouts occur at various points including during construction, and sometimes when construction is complete (a Major might prefer paying a premium to buy “off the shelf”).

Rodrigues has a long history of employment in MWH Tech: nearly 25 years. MWH has world
leading experience in water resource management-infrastructure, tailings management/dam building and Stantec who build mines acquired this firm 2016, due to these synergies.

https://www.stantec.com/en/news/2016/stantec-to-acquire

So what’s the relevance of all this? The main environmental issues around laterite deposits and mining these, revolve around water resource management, waste management/contamination of water bodies etc. We have seen Ramu mine in the spot light, and this document below highlights the concerns historically: it appears the studies at FS stage were inaccurate and regulators turned a blind eye. The Chinese were majority holders.

https://www.banktrack.org/download/ramu_nickel_mine_2005/mpi_ramu_nickel_mine_2005.pdf

https://miningdataonline.com/property/3323/Kurumbukari-(Ramu)-Mine.aspx#Geology

I think today’s appointment underlines the fact that water resource management is extremely important to both our laterite projects, and we have gotten an expert in his field (for Araguaia, but I wonder if we might use his insights for Vermelho too?). Note that Ramu project (PNG) is an HPAL project producing hydroxide and people had concerns regarding the “submarine tailings” from the beginning (essentially a pipeline dumping tailings into the sea, what could possibly go wrong?!). Of course recent news must have made regulators and mining companies (HZM included) more alert to the perils and safeguards needed. Araguaia is not HPAL, it’s RKEF and it does not produce tailings or waste that needs to be disposed with water. It will produce waste **** that can be re-used in cement industry and in road paving. All just my two pence thoughts. Please DYOR. Good luck all

Project managed Las Bambas: a USD7 billion project, completing it 3 months early and with a 500m saving! Jacobs is a huge co. Great appointment. Moving in earnest towards construction means any potential partner will have to pay full whack or watch HZM become a meaningful producer. I m very pleased with either outcome.

https://www.streetwisereports.com/article/2019/09/09/exploring-for-copper-in-major-belt-in-the-yukon.html

The blue areas are newly staked, and labelled “HUN” in the map link below. (115l06/07 has the new stakes) For reference, 115l11 is Minto Mine. Surrounding areas are the old minto exp claims (DEL etc).

Today’s RNS mentions oxide mineralisation at surface on the newly acquired land. Remember the mill could be used for ore from adjacent areas (oxide and sulphide), and the gold/silver would not be subject to streaming agreements. I m pleased to see directors putting in their own cash, and of course the raising price matters, let’s see where it’s pegged. The warrants at 3.2p old money expire Dec 19. Gati put in his own cash in the last raise too (he holds 5.6%). He’s moved from Lukoil where he managed a 400,000 barrel a day op.

https://t.co/m3o2ZKEe3i?amp=1

I m still very positive about the upside here. Yukon is massively under explored and we own the only working copper gold silver mine there. DYOR. Good luck all

Wasarunner: I think the two projects are not in tandem as far as development stage is concerned right now. Vermelho is 9-12 months behind Araguaia is my guess. Most of the data as regards metallurgy etc can be just pinched from Vale studies, but environmental studies, consultation with communities, other stakeholders etc will need to be done afresh perhaps. (Over 12 years old). Perhaps engineering plans too may have moved on a bit from old design...BUT JM has stated in a Proactive investors interview that battery grade Ni projects tend to get battery manufacturer buy in/off takes at PFS stage itself.

I get the feeling HZM won’t take a partner for BOTH projects at once (ie partner at parent co level) , given they lose value by doing that. At Araguaia, both the CFO and JM have stated that the scalability (14.5ptpa vs 29ktpa) are options, depending on various factors ie Ni market, interest from a partner etc. So it’s entirely feasible that a major partnering (and taking a majority controlling stake at project level) might lead to full capacity 29ktpa from 1st construction. After all the full capacity is $643m capex, before various potential savings including 17.2% contingency, engineering works negotiation of cost sheets (surely 2 RKEF units should fetch some saving if bought at the same time lol), savings on infrastructure because of Govt contributing etc.

We have wondered how this dilution at project level might work. I m as clueless as the next person, but my guess: let the major take a controlling stake in the subsidiary that owns Araguaia (the subsidiary can comprise of shares that can be split my guess-bit like ENSA in Solg’s Cascabel). So overall HZM equity doesn’t undergo dilution, only one project gets partnered and taken over. In other words, HZM gets free carry in Araguaia, BUT still retains big value because it owns 100% of another Tier 1 project which it can develop in parallel.

So my guess on news flow: Vermelho PFS followed quickly (if not simultaneously) by an off take from a ? battery manufacturer, and one or two other pieces of the overall Araguaia financing puzzle this quarter. Exciting times for sure, for those with a little patience :) please DYOR. Just my musings. Good luck all

This article is erroneous in stating the capex for HPAL projects is 5b for a 50ktpa project. I posted on this a few days ago, exploding the myth that laterite produces only Class 2 Ni. Note that Vale estimated Vermelho would require a capex of $1.4b for a 46ktpa project. I expect costs to be smaller given we plan a more modest 18-20ktpa project. Also there are synergies from having two mines and two processes in one district. The more superficial limonite ore produces battery grade Sulphate via HPAL, whilst the deeper Saprolite goes into RKEF to produce FeNi 30.

Lastly, NPI was coming out of Indonesia, and this being banned will lead to greater demand for FeNi. Imho only. Please DYOR.

https://t.co/ACCMZlxYhF?amp=1

The capex costs at Araguaia power supply line, went up after Abengoa’s Brazilian subsidiary collapsed. (See previous post in thread) It looks like the lines went to auction in 2018, and were awarded to new participants. Page 11 and page 19 have relevant info. Lot 19 of the auction is relevant to Paras state, and specifically connects the region to the national grid, I think it also allows power from further north (Belo project) to be delivered.

https://power.nridigital.com/power_technology_nov18_special/the_world_s_major_transmission_line_projects
This website mentions the project as in the top ten power projects, worldwide. Time line for delivery is unclear, but if it does happen in next 2-3 years, it should help Araguaia.