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Maybe it is sell off from LM, Orion and the last 4% that Helikon still hold.
Could be that Glencore might be the last big holder., maybe buying up cheap shares.
They are currently $300 m a year better off now that the New Caledonian deal is ended in June/July.
$300m per year for 2 years to complete HZM, lenders to be placated for 2 years, over 51% ownership, some royalties to be paid to other cornerstones, and a massive share dilution to give G a 90+ % holding, thus encorporating HZM into the G empire. As for remaining shareholders, a offer to buy up the last of the shares.Even at 10p per share, it is only £12m to G.
Added to this of course is a new nickel operating mine with bags of upside potential that has fallen into the lap of G.
It is ok everybody, it is just me having a lateral thought. It is raining outside and I was twiddling my thumbs, wondering what to do, haha.
But you never know????
Current Nickel price would have given an extra $120m per annum of "free" profit.
An extra $600m of build would have meant a 5 year payback at most.
For a 28 yr. LoM that is an additional $2.6b gross profit, $4b if it was 40 years.
Surely someone will be eying up HZM as a lucrative investment now. Cheap as chips
Now where did I put my wallet, Orion/Glencore?
Another $27m of "free" profit per annum to be had.
In such a short space of time, this now equates to over $100m extra profit per annum.
A 6 year payback on $600m loan from the cornerstones on a 28yr. LOM project.
Lets put it another way, after taxes (even if you use a 50% rate), this would equate to an extra $1.1b dollars profit.
It beggars belief that the cornerstones can walk away and lose money here when all the signs said that nickel prices would rise.
Will they now seriously try to put a package together, or continue to bury their heads in the sand.
Another lost cause sadly.
Since the decision was made to suspend any further investment in HZM, the price of nickel has risen by about $2k per tonne.
Extracting 37k tonnes per annum racks up a further $74m of potentially free profit per annum and minus royalties and taxes, this would give a minimum of $40m extra per year.
This would have reduced the loan payback dramaticall, and any future rise, (which now looks likely) must surely now make some of the 150 potential investors have a re-think.
Perhaps the BoD could discuss this with the administrators and see if there is any mileage here. Maybe even the cornerstones to have a second look at the increased profitability.
I still cannot understand how a joint approach by lenders and cornerstones could not get a concensus to move forward.
As you say though, maybe some group is trying for a very cheap buy up, especially since Ni price is on the rise
The parent (from the sources of external equity, retained profits and bank or other debt) can subscribe both equity and/or debt to finance the subsidiary. It could also persuade a bank (or other lender) to lend directly to the subsidiary.
The scenarios have not changed.
Administration, sell out, care and maintainance or cornerstones and lenders produce a package of investment to take the Company through to production.
I do not like the first three options so am hoping that the fourth option somehow takes place, otherwise everybody loses massively.
Just a thought, but Glencore had committed to a 10 year offtake agreement with HZM for its nickel.
Now that the Company is on the rocks, can Glencore afford to lose such a vast amount of nickel, or does it have other reliable resource solutions. With Ni inventories to decline within the next 2-3 years as usage increases, prices will rise and the npv from HZM operation still makes viable economic sense. I suspect someone is going to make a huge killing here, buying up the Company at a huge discounted price.
There are some heavy losses for all parties concerned so why would they not still consider their alternatives. Orion and Glencore are now in a cash rich position for this financial year. Together they could well save the Company, but at what cost to existing shareholders is anybodys guess
I read the situation as one that the options approached are dead in the water.
Does this mean that all options have been exhausted? I think not.
Other options will now be considered but I suspect that shareholders may well be disappointed in the long run.
The cornerstones and the lenders could well be sitting around that table now, trying to thrash out a saviour programme. We wait and see.
Now that both Cu and Ni seem to be on an upward curve in the markets, I wonder if some of the 150 potential investors will re-visit HZM. There must surely now be a rethink from the cornerstones as well. There is still a lot of profitability in the mine and with Glencore committed to 1st ten year offtake, then why don`t they seize the opportunity. Beggars belief to me.
Just looking at friday sells and it is over 2mil. Extrapolate this out for a month and it becomes over 60mil. We know that some big players such as Helikon got rid of about 4% min. of their holding so tells me that someone is stacking up seriously. Is this the three cornerstones or is it just traders looking for a fast buck. If it is the cornerstones, then they would now own about 75% of the company.
The shares are cheap so why not do it.
Orion are now cash rich ( $400m for sale in copper mine)
Glencoe now saving $300m on a lossmaking copper mine.
Both LM and Glencore offering $100m each for another mine, but lenders could not agree terms.
Is it not possible that they could fund continuation at HZM. They are heavily invested so why not see the mine built. In 2026, the nickel price will have risen, and global stocks will have started to decrease as unprofitable mines close and China takes up almost all of Indonesian T2 nickel. The western world will begin to look out for free nickel. HZM fits that bill .
I could be just making pie in the sky here, but surely, with the returns possible, then is it not in their best interests, after they have exhausted all other possible avenues, to seriously consider a further big investment here. If they announced it, then the sp would rocket back up to around £1 per share, making their holdings worth a lot of money.
Just my thoughts, usuually way off the mark though.
Lots of sells again, but who on earth is snapping them all up?
Is it possible that the cornerstones are buying more ownership or are the traders stocking up in case of some form of a rescue?
Too late to sell my shares as a few hundred pounds is neither here nor there.
I might as well hang on to them and either watch them go down like the Titanic, or rise like a phoenix from the ashes.
I think I know which way this is going however.
Got to agree with you , but doesnt it strike you as odd that all 3 cornerstones ended up here in an unholy mess. Where was the due diligence? One just doesn`t and cannot hide the facts about the shortfall here. Were the 3 amigos off playing golf somewhere whilst costs escalated here. There must have been plenty of meetings with the BoD. Yes, the CEO hid a lot, but to suggest that this build would cost $500m, when other professionals suggested that $ 1b would be required tells me that the 3C`s had too many plates in the air and did not really scrutinise the numbers properly.
The CEO should be hounded out of any management control with any other companies. In fact, he should be taken to court by the lenders and the cornerstones.
As for whether this can be made into a profitable mine now only depends on the price of nickel.
Care and maintenance would be my preferred route until such times as nickel begins to become more valuable again. Probably 2-3 years minimum
This is an old hat story. Glencore had pumped over £300m into this working operation each year for ten years, but nickel prices and high production costs coupled to a low nickel yield did its undoing. Orion also sold a large stake in a Canadian copper operation for just under $400m recently.
These guys are cash rich but seem unwilling to go the extra mile here. It may cost $40-50m to go into a care and maintenance mode, but HZM mine is higher graded than a lot of other nickel mines. and surely for a couple of years wait, they can assess future nickel prices.
China will take up the bulk of Indonesian nickel going forward and there is the high probability that Ni required by the Western world will start to become more difficult to get. Ni prices will therefore rise within 2-3 years time making HXM a much better cost effective project.
It is a shame that short sightedness is prevailing here. The three cornerstones have had their fingers burnt elsewhere. Maybe now they are being overly cautious here as it will take another 2 years to get HZM into production, by which time futures Ni demand will be much stronger and inevitably, Ni prices will have rebounded.