RE: Bridging the gap from 4p to 7p24 May 2020 17:42
Whilst it’s fair to be cautious and not let our hopes override reality. It’s bit of poor deal to say the least if JM only gets institutional buy in @ 4p or there abouts.
JM has been on record saying the Orion deal was the equivalent of a raising @ 10p. In fact the SP was in the doldrums prior to the news release and gapped up to around 7p. Valuing us at approx £100M which apparently is the threshold where institutional investors feel they can justify entry on such projects/companies. Now if I was Teck or Glencore, not to mention Orion, I would not be keen on such a dilution without a fair bite at the Shares on offer. These 3 should have a clearer idea of the Nickel market cycle, so hope they know it’s a give away at 7-10p raise let alone 4p ish.
Crickey, if the banks need such a dilution to get in on this project (with us holding two Tier 1 mines), then I don’t know how other miners are going to get funded. If that’s the case, I would hold off on funding, as Nickel will go a lot higher if no new mines are coming online in the near future.
Appreciate that Araguia is essentially for the SS market, but our low cost base give us a firmer chance for founders to see a return on their investment even in a low Nickel price market. Add to that the EV market is going to hit a wall and already manufactures of batteries and car makers are trying to secure supplies do off take deals. I would be seriously disappointed in JM if it’s sub 7p for the equity portion having got a great deal with Orion in the first place. Orion I understand did a serious round of due diligence on HZM, which from which others can take some comfort in when doing their evaluations. In fact it was intimated that Orion would probably take part in future deals with HZM.
Roll on Thursday and let’s see what’s what.
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