Member Info for Minecheck

I think it’s extremely clear that Russia does want to change the status quo. The Kremlin has been very clear about this. The status quo, in the sense of creeping expansion of NATO to Russia’s borders, is explicitly unacceptable.

Now what this means in practical terms is unclear. But the West’s de facto rejection of diplomacy eliminates the most peaceful route for effecting change, and that’s exactly why the FXPO price is renewed its dive.

Regarding this question of why there has been no clarification on the issues noted in the Dec 7 RNS, I also note that this same RNS says:

‘Emulsion product quality has been restored and the underground production charging units have been fixed.’

It’s worth noting that it is ‘western intelligence’ and media which is hyping up invasion rhetoric, and liberally issuing threats of extensive sanctions.

None of this helps FXPO and those who have invested in it.

The POLY assets are not going to be in a war zone no matter what happens in Ukraine since Ukraine has virtually no capability to strike anything inside western Russia let alone further east.

Thus POLY offers an opportunity to take advantage of any additional over-reaction by the market.

Bwana made a great point below regarding having got the funding done in 2021 relative to 2022.

I think this is worth amplifying and reiterating. The macro risks in 2022 look extremely high. Economically the western world is over indebted and in danger of suffering from stagflation. Policy makers have precious little room for manoeuvre, and that’s without further Covid or other macro shocks. Markets may suffer badly in 2022 after the long bull run in 2020/21.

Geo-politically the west is struggling as its power wanes relative to the rest of the world. Western leaders still like to piously lecture others about what they call the ‘international community’ (basically states who follow US diktats) and the ‘rules based order’ (basically the post 1945 settlement created in US interests which has been assiduously undermined by both the US / NATO when it suits and other states including Russia to a point of near dysfunction).

The macro risks are therefore increasing and I don’t think markets fully understand this.

HZM did very well to get financing agreed this year. 2022 may be a very difficult year, and it’s difficult to see how HZM would have been able to put anything together, at least on these terms (I know some think they’re bad but it’s all relative) in 2022.

Ironically HZM’s position may strengthen further as barriers to entry and funding conditions likely become tougher in years ahead.

Yes, I think fundamentally it is a great company. But it’s in Ukraine and the geo-political risk is huge. Moreover, until the current Russophobic regime (notably backed and supported by the UK) is replaced by one which is more reflective of Ukraine’s permanent interests, then I see little scope for FXPO valuation to appreciate significantly.

In that sense, FXPO is a hapless victim of geo-political games. The quite deliberate stoking of regional tensions by London (with its military trainers, its patrol boat deal, and its FONOP stunt off the coast of Crimea in the summer) is a lamentable example of irresponsibly encouraging Kiev to take risks whilst simultaneously having absolutely no intention or ability to support it should the missiles fly.

FXPO is a very high risk play IMO. But if / when the Zekensky regime falls or sane diplomacy resumes on both sides, it’s one to seriously look at.

Like others I regard this asset purchase as a prudent and positive move by HZM. Of course there are risks attracted to purchasing second hand assets, but the purchase agreement reflects this.

Some people are fond of saying that Araguaia 1 is de-risked. It may be largely from a financing perspective (which is a huge obstacle overcome) but not developmentally and operationally (nor the external geo-political and macro economic risks which HZM are largely powerless to mitigate) .

So what we now face are the development and operational risks, and this RNS should be the first of many which address and mitigate those risks.

This is therefore a symbol of HZM’s progress towards operational development. In itself it’s not hugely important but symbolically it is. I hope that the market starts to take note.

I have to say that I see absolutely no reason why the issue of the additional shares in January is likely to boost the share price.

Neither do I think PR will have much impact on anything. THS for example are big on PR but with seemingly minimal impact.

In the aftermath of financing we face a long road of construction ahead. This is historically not a great period for share price growth. But successfully doing the hard yards in construction and development is the key to long term success IMO. Note the emphasis on ‘successful’.

There are no guarantees that this will go well. If development is poorly managed we could see further destructive dilution ahead.

What we need is solid project and financial management and a fair wind. HZM is a long term hold for me, but much patience will be required.

All,

This is a great Board on the whole. I’m a newcomer and value the opinions expressed by the vast majority. It’s generally informative, there are some truly insightful and knowledgeable contributors, and it’s (generally) welcoming of different views.

In other words, it’s a good space and a credit to the majority (whatever their views). All I will say is that I find spamming (my interpretation and I’m not implying intent) on a board such as this to be out of place and a little jarring after a time.

GLA - let’s hope we can back to the placing price over the next few weeks to start 2022 in a more positive space.

I’m sure nobody wants to create an echo chamber, and from that perspective I welcome contarían views.

We must acknowledge that some of the claims made for HZM are a little over optimistic. In a market HZM’s value is what the market says it is, and whilst fundamentals are also important, market imperfections and irrationality may exercise an indefinite hold over market price.

But the claims made for HZM that I particularly take issue with are that it is a ‘climate protection’ stock and therefore should, by some mysterious mechanism, do well.

There are literally 1,000s of companies busily greenwashing themselves. In technological transformations some companies will do exceedingly well, but many will fail. Whatever ‘climate protection’ is supposed to mean, it means literally nothing in itself.

HZM will stand or fall based on numerous factors, including of course nickel demand. But pretending it’s intrinsically virtuous is not one of those factors.

That said, I remain a LTH.

Hi Pardariff,

I agree with you about inflation and gold price. Studies seem to show that there is no guaranteed relationship.

Not at all Pardariff - it’s a bit niche.

In 1992 a hugely influential book was published by Francis Fukuyama called ‘The end of history and the last man’.

In this work, Fukuyama argued that western liberal democracy had triumphed over everything, and that this social, political and economic system was the end point of humanity’s struggles to find ways of governance. It was the end point - a universal system to which all states in the world would eventually move.

Western elites gleefully embraced this concept and developed foreign and domestic policy based on this assumed universal triumph.

Of course 30 years later it’s all gone horribly wrong. The 2008 economic crash was a devastating blow to the presumed infallibility of western economic capitalism. Meanwhile neither China nor Russia have embraced western political and social systems and values, and increasingly offer alternative systems of ‘managed democracies’. The West appears to be in retreat relative to Asian states, and the risk of major inter state warfare appears to be rising.

Which is why I alluded to this in relation to the statement suggesting that if gold hadn’t risen in 2022 then it will probably fall in 2023.

Because none of us can predict the future, and there’s nothing to suggest to me that gold has somehow had its chance this year and thereafter the door is closed.

@Ade1234

I’d be interested to understand your reasoning. Do you think that high debt, rising inflation, and systemic shocks can not occur / exacerbate after this year?

Sounds a little like the gold equivalent of a sort of ‘end of history’ argument. We all know how the macro version of that argument played out.

Don’t think anyone can really predict with any degree of certainty.

Personally I think that the combination of high sovereign debt, rising inflation, un-affordable net zero obsessions, and continuing Covid disruption will continue to de-base currencies and debt instruments as a store of value over the long term. That must make gold relatively more attractive.

But I’m no expert on this.

Are you disputing what I said about Crimea? Or anything I said?

Or does the truth hurt?

Gavster - it should be noted that factually speaking, hardly anyone died in Russia’s annexation of Crimea, which formally followed a referendum. The Ukrainian army stationed there did not fight. They were given the option to return to Ukraine or join the Russian army. About half of them joined the Russian army as they were local to Crimea, and like most of its residents welcomed the Russian annexation.

The deaths in 2014 were mostly in Kiev and Odessa during and following the western backed armed coup against the democratically elected pro Russian former President Yanukovych.

These rather inconvenient truths get hidden by the Russophobic propaganda spewed out by western governments and media.

Russia’s concern is with US attempts to turn Ukraine into a virtual unsinkable aircraft carrier for US weapons. Gas is not the main issue. Geo-politics is.

In reality none of this will impact POLY’s operations. The West will fight Russia to the last Ukrainian. If mis-calculations happen, the resulting conflict will be one sided, brutal and short.

The clarification of market price on the offtake agreement is a key piece of news for me. Reflecting, it’s clear that HZM Management have credibility. Notwithstanding the inevitable dilution that was necessary for achieving $600+ financing, it has been done with top quality third parties whilst retaining independence and ownership.This really should tell us quite a lot. I don’t always agree when some of you guys wax lyrical about EVs etc, but I do share sentiment that this is a top quality investment case, albeit one which requires patience.I’ve added today on the offtake news.

I’m a LTH and believe this is a big achievement.

But this BB has been dominated by people with wildly unrealistic ideas. From those who believe that HZM is some messianic saver of the planet and therefore a great virtue signalling investment no matter what, to those who felt that PIs would be rewarded for risk taking through to financing which would lead automatically to a rapid re-rate.

I dismiss both of those justifications as for naive dreamers. Instead I invest based on solid but dull financing reasons. So where does this deal leave us on those grounds?

Well, the truth is we don’t know. We don’t know the offtake terms but as others have said we must assume a collar which removes some or all of the alleged nickel upside. We don’t know how the massive build project is going to go. Typically they almost always take longer and at greater cost than expected.

Finally, we’re not ‘de-risked’. That is a ludicrous assertion. Mine construction is complicated, full of risk, extremely uncertain.

My view is that HZM will get there but it will take years. De-risking will happen slowly through time. FCF is a long way ahead. On balance I continue to hold, but I want to see the offtake terms.

Sometimes when I read this board I think HZM’s reason for being must be EV batteries. If I had a £ for every article about EV batteries ……..

Strangely, I saw no mention of Johnson Matthey’s humiliating exit from the battery materials market. Less strangely, this has has no discernible impact on the HZM SP, any more than the countless bullish stories about batteries had any discernible positive impact.

The reason for this, I surmise, is that nickel is not only or even primarily a battery metal. Consequently I discount many of the links posted here to EVs as basically the largely irrelevant musings of fanatics and boosters. But equally of course it means that news such as JM’s can also be ignored for the same reason.

The case for HZM well made by some posters, but seems to be poorly understood by others. I hold. DYOR.

This is another company which faces a very significant geo-political risk, largely thanks to the ahistorical anti Russian approach of the current Kiev regime. Ukraine is in significant danger of making the same mistake Georgia made in 2008 (aided and abetted by its false friends in the West) and inviting significant consequences.

Personally I think FXPO is a decent investment prospect, but not until geo-political risks decline or the SP falls further. DYOR.