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The company has certainly not ruled out an equity raise which would usually be done with reference to the share price at the time.
The Directors are in the process of evaluating potential additional funding options from potential strategic investors but no such funding is committed as at the date of approval of these financial statements. The Group has been, and continues in, active discussions with a number of potential strategic investors and is confident that it will be able to conclude an equity investment from one or more of such parties within the period up to 31 December 2024 assessed for going concern purposes
Running short of cash as I doubt the short-term warrants will be taken up at I believe 50p which expire mid Dec
The Directors have prepared a base case scenario that assumes the 14.5m Short-Term warrants originally granted in 2021 ("Short-Term Warrants"), are exercised. Under this scenario the Group would expect to remain cash positive for the period up to 31 December 2024 assessed for going concern purposes. The forecast does indicate that the Group would move into negative cash shortly after the period assessed for going concern as a result of working capital investment on future sales. The Group would defer any working capital investment if it were to result in exhausting all cash. This forecast is also based on delivering existing signed sales contracts during 2023 as per forecast gross margins and existing and future sales contracts during 2024 at anticipated positive gross margins. The Directors recognise there is a risk that the Short-Term Warrants will not be exercised if they are not 'in the money' before the expiry date and given it is not at the discretion of the Group.
In assessing going concern the Directors have also prepared a severe but plausible downside scenario which forecasts delivery of existing and future sales being made during 2024 being delayed beyond June 2024 and forecasted margins not being achieved, and the Short-Term warrants not being exercised. Under this scenario the Group would exhaust all available cash by April 2024 and it will be necessary to raise further funding within the next 12 months in order to continue trading and deliver on the strategic objectives.
I admire the optimism here but the 14th Nov RNS clearly states that existing cash will only last till mid December.
They obviously expected a bail out before the 14th as work and expenditure continued. So the big three and no one else would put up funds to keep construction going yet the directors though they would do. Even though the directors tell us they are in close contact with shareholders and lenders they failed to see this coming.
We are also told additional funding will not be forthcoming until the end of Q1 24, this is a huge gap given the workforce salaries and any essential on site tasks.
I will wait for a funding RNS before investing.
Looking at yesterdays trades there were definitely more sells yet the price is very stable at the 20p (nominal value) level. Others seem to think there is no meaning in this but it does seem evident.
The example of Synthomer is interesting, there the PI's were diluted to 1/4 however the business margins were small hence the necessity to get the loan repaid , here we will be making over 100% when up and running and payback in 2 years.
When I was in business a deal like this would be very attractive, at a smaller scale.
Caution still prevails but a raise of $200m at 20p would still be viable. Issued shares would be something like 1500m inc CLN's
I also wonder about the 35% and 6 months figures, JM has always relied on outside expertise and what should be industry insiders ie Hatch, Onca Puma staff, have they really got is so wrong. He may well be covering himself until the true facts come out from the Reta Engenharia study in November, until then logically he can't say anything other than report physical progress on site.
It's sad that rude and abusive people like 777 inhabit this board.
The question is why the price seems to move about the 20p area this being the nominal value.
I am interested in any knowledge of company law, or researchable examples of companies hitting this limitation such as Synthomer.
If an EGM can change this at will what is the point of
Last year on the 4th Oct we raised 15% (70m) is an oversubscribed placing with virtually no change in share price, at that point the project was 15% complete and 350m capital committed.
What is the change, the construction was in progress and the big three could have crashed the share price. The difference seems to be the raise was announced on the day of the shortfall warning.
It sounds like JM has no idea of the shortfall until the report in mid November maybe accompanied by positive A2 news.
Perhaps they could skip the middle man!
'Tesla Inc. held early-stage talks with Glencore PLC last year about buying a stake in the commodities giant, according to a person familiar with the matter.
The electric vehicle maker's interest came as manufacturers across the West look to secure supplies of so-called future-facing metals that are used in batteries and the renewable energy industry.'
Spread currently is 5.845 - 5.828. about 0.3%, very good.
I can sell 1,000,000 @ 5.828 in one go so just bought another 100K
It's behaving more like a proper share, I'm sure the current malaise will disappear once construction starts
According to the Information Circular the open offer and Glencore subscription are not material. I'm quite happy with less dilution.
If the Open Offer raises less than US$8 million or the Glencore Subscription does not complete the amount of “Working Capital and Other” will reduce by a corresponding amount. This will not impact the funding for the Araguaia Project.
Interesting to look at the interest rates RMM (LIBOR + 8%), HZM ($146m @ LIBOR + 1.8%, $200m @ LIBOR + 4.5%)
They have a working mine with known risks, we have all that to come.
I hope the lack of news due to finance confidentiality will end soon and we can enjoy watching the build, webcam maybe.
Another 150k in the SIPP for me.
Even if the retail offer is at 5.5p if it's a primary bid thing you can't buy into a SIPP or ISA. With all the interest in Ni I would hope JM can do better though, if not I will express my disappointment at the next AGM vote.
https://www.braziliannickel.com/piaui-nickel-project/
This project down the road is half the size of Vermelho and successfully tested heap leach instead of HPAL, similar grades, C1 costs slightly higher.
Highfield's project in Spain looks similar to ours, the presentation gives some interesting background information. Our IRR is much better but they have arranged some MOI's for offtake. Their C1 is 82euros/ton anyone know what ours is?
https://www.highfieldresources.com.au/wp-content/uploads/sites/2/2020/09/HFR-Corp-presentation-Sep-2020-FINAL9255.pdf
As I see it the total share capital of the company is the number of shares X the issued share capital (1p shares)
so
2,084,000,000 * 1p = £20,840,000
20,840,000 * 1/3 = £6,946,666 ( the figure in the RNS)
So this is permission to double the ordinary shares in the company. Presumably this is all to head off unwanted takeover attempts or big financing for the other targets. I does seem though that only 5% (£36,000,000 @ 35p) can be an open offer.