Blencowe Resources: Aspiring to become one of the largest graphite producers in the world. Watch the video here.
Most new large scale mining operations cost in excess of $1b and are profitable.
HZM has a massive life span and payback in later years will be huge.
Add line 2 and the Vermelho project and this will be a world beater.
This is just the type of operation that Glencore would be interested in.
It would surprise me if they are not controlling HZM destiny in current discussions.
We wait to find out, probably within a week what the future of this project will be.
Administration is the worst of all options for both lenders and cornerstones.
Glencore have been known to "miss the meaning of non action" Just look at the litigation in Australia and Brazil because they were not on the ball.
Couple that to the withdrawal from that massive loss making mine that they were ploughing $300m a year into.
So who is in a position to benefit here? Must be Glencore. If they mow have $300m that can be invested annually "savings from there pull out of that mining venture", they firstly will not want administration, noe will either the lenders or cornerstones.
They are big enough to offer a cheap share price. Even at 10p, it will only cost them £20m..
Pay back the 2x$5m to Orion and la mancha and the cost is £35m. How will O and LM react to an offer like that? who knows, but if they then own the company, then they can work with the lenders to get the release of the remaining funds by committing $200m for 2 years to get HZM into production. Total, about $1b. LOM 28-40 years producing 27000 tons of NI at $18k per ton gives a turnover of about $500m per annum.
This makes the $1b pale into insignificance. Then add on line 2 and the other HZM site and this is a steal.
I used the figure of 10p as an example. It could be 1p or 50p?
At what price O and LM will be satisfied is anybodys guess but Glencore hold all the aces.
This is just my thought so I am open to ridicule here. Pull me to bits if you want. At this late stage of the day, we are in the lap of the gods. Alternative solutions welcome here.
I think you will find that govts are already looking at ways in which to stem the flood of cheap nickel pig iron getting into the Western markets. Some countries have already introduced import tariffs and others no doubt will follow suit.
The days of cheap NPI from Indonesia are numbered.
Their coal fired furnaces are belching out CO2 to produce "dirty NI", and clean nickel may well be sold at a premium.
HZM is a clean nickel operation and is well placed to supply clean nickel if the market introduces some measures to reward clean NI operations, whilst penalising the dirty Ni producesr.
It is probably an opinion.
We all know that the price collapsed when the massive overspend was finally admitted, so no surprise there.
The sp has remained largely at 3.5to4p since that news.
The price will rise massively once a workable solution is announced that benefits app parties
My only worry is that an outside third party comes along and buys the debt for $1. The UAE did this recently on another stalled project and they paid $1 for over $900m of debt. I cannot remember the project but shareholders lost out completely.
In HZM case however, three major shareholders would probably never allow this to happen.
An RNS is surely around the corner. We either go on and see a massive rise in the sp, or we go under.
I take your point though robdog that the sp would be marked down by now if a solution was`nt around the corner. It may not be to everyones` satisfaction, but a compromise deal should still see the shareholders benefitting.
I also remember listening to a video from a couple of months ago where it was suggested that $250m was needed to finish the build.
I think this was posted after the new board was put into place, suggesting that someone had re-evaluated the costs.
This is a huge difference from the $450m costings of a later date.
Who is to be believed???
I wonder if all the parties can agree on finding funding that can cover only the first year, remembering that this is now a 2 year completion project. This would effectively give them another year in which they can agree on the process of creating the second years funding.
I would suggest that a min of $250m is needed for the first year.
If the lenders release the remaing balance of the loans, then about $100m would be needed.
$25m each from lenders and the 3 main shareholders would ensure that no dilution takes place.
The sp would rise significantly, and any future raise would not dilute the shares so much .
The $200m balance may be over estimated and I am certain that the board would want to see production begin at the earliest opportunity.
Slowing down the build may actually put more cost into the equation.
Open to your thoughts on this one people.
Wow, con, I suppose that if HSBC have acquired 4.5% sh. since October, then they must also be wasting their money. Unless, it is possible that they have picked up a massive holding on the cheap hoping that they can make a killing. I wonder if they will be a party to the negotiations?.
Method in madness maybe.
Laurence, please don`t fall into the trap. I know that it is very difficult to restrain oneself when pub and con post, just be mindful that other investors may share your views and are trying to remain civil.
Getting too personal inevitably undermines most of your eloquent posts and only gives the de-rampers bigger egos.
If it turns out well for you, then these two posters will crawl away with egg on their faces.
Then you can be a very happy chappie, all the way to your massive bank account.
Hmm.
Contrarian,reading your last paragraph suggests to me that you should practice what you preach, so stop your repetative posts. You are starting to write like a de-ramper.
Everyone knows your views now, as well as the Publicans, Time to shut up and let HZM come to a solution of its` own making. Those people who are still invested in this Company do so because they believe that something good will happen. Your words ( that err on the gloating side) just don`t wash with investors. You are becoming a tad tiresome. Respect them and move on.
Agree wasa. All parties now have the cushion of 60 days to come up with a workable solution that benefits and protects everyone. There is huge asset value now sitting above ground and to come together to agree a way forward surely benefits everyone invested here.
Can any one within lenders and major shareholders "steal" the company? Highly unlikely unless no agreements can be reached in the next 2 months.
Will any one party want to lose millions by gifting the company to another party ? Extremely unlikely.
I don`t know how all this will end, but I have a gut feeling that between them, an agreement will be reached.
Let us remember that the annual turnover of the operation once it is in production is absolutely MASSIVE so why should these groups sitting around that table right now want to miss out on potentially 28-40 years of huge profits. It just doesn`t make any sense to me.
Haven`t the Brazilian Govt raised import taxes to 35% on imported cars recently.
This will incentivise manufacturers to set up shop in Brazil, toyota being the first to do so with a $5b investment and large Govt grants to help out. This will affect Chinese imports and other countries could follow suit. China manufactures the parts for their mg range which is assembled in the uk, a rather poor quality car, but cheaper than the average suv. The next move should theoretically be more ev manufacturing plants in Brazil. Why import Ni when groups such as HZM can supply. Remember , Glencore has a 10 year offtake agreement in place.
On another point, Glencore have just announced a $90m investment in Li-Cycle a battery recycling company. This Company was to build a new factory in New York State, but spiralling costs have put the venture on hold. (HZM are not unique). The money to be spent on restarting the project to get it built. Glencore will only take a 5% stake MAXIMUM in the company going forward, ie, existing shareholders are protected.
Who is to say that Glencore and the other lenders/shareholders cannot therefore agree to provide the additional funding needed to get HZM into production, without any dilution to existing shareholders. Only time will tell
Glencore has been ploughing £300m annually into a futile New Caledonian mine for the last ten years. It has now pulled the plug on that loss making venture. They only owned 49% of that company and are actively trying to sell their shareholding.
Do they have that amount of money available now for other mining ventures? Probably.
Is £300m beyond their pockets? No.
Could they therefore invest that amount of money here into a 1st rate, class 1 mining operation that is 65% built, with a suggestion fron the Board that production will begin in 2025? Yes, with consummate ease.
Bear in mind that this is 1.5 years away from production, therefore only $330m dollars required on an annualised basis.
These are all rich players so who is to say that together, they cannot find a fair resolution.
We wait now to see what they will put forward.
It could go either way and I am not betting yet on which way this will turn out. Boom or bust?
Spot on Lawrence.
It only needs the release of the remaining $131m to advance the programme through to 90%+ completion. The remaining shortfall will then be much easier to find.
Production to begin during the Summer months.
Exciting times ahead.
Does anyone have any updated info as to position on water storage reservoir and 230kv electrical station.
This was part of the late Dec. rns when the extra funding was announced.
Surely they must be very close to completion, adding further credence to the fact that the company is getting very close to finishing the total production build.
Completing these 2 major milestone events may well be sufficient progress for the banks to release some of the remaining loans to allow for further work to continue.
I suppose it is all about confidence in the new Board. Time will tell.
Not really fantasy.
If Orion and Glencore share the cost and the banks release their final tranches, then the plant can be built. Production will begin. The share price will rise rapidly and their sharholdings will rocket in value.
It even lends itself to a small share raise once the sp is back over £1. issue enough {50m} to pay off the £50m shortfall. This only reduces the sp by about 11%.
Just a thought on your fantasy dreams.
Well researched Lawrence.
Contrarian and the Publican are interested in deramping this share. beware of them.
We all need to wait until the next rns is released. which should not be long in coming. At this point, we should know which way our shareholdings are going.