Member Info for pickedpeck

Nope, the SP is at this level because of shareholders selling after the RNS. It is completely separate to the mine construction progress, draw downs, Nickel price, or whatever other real world factor you might link it to. It is simply a product of shareholders selling based on fear, anger, frustration, caution, or I suspect in mnay cases stop losses.

The sell off generated it's own momentum, carrying the price on the back of short traders way down here. Now everyone is worried, looking around for it to be worse than it is.

That's become a bit self fulfilling because now it is a lot harder to raise equity money with a share price down in the gutter.

You have no clue what the draw down rules are, what the banks are offering or asking, or what security could be applied against. You're making stuff up that no one outside a few people in the company know.

You have no clue what the draw down rules are, what the banks are offering or asking, or what security could be applied against. You're making stuff up that no one outside a few people in the company know.

Yes it is already priced at the biggest dilution practically possible, and even diluting that much would badly damage the cornerstone values.

Look at it this way. La Mancha already own 23% or so. If they dilute 4:1 as I said in worst case that 23% (that cost then $116m) becomes less than 5% of new. They could buy 25% of the new shares to hold just under 30% total. That new 25% would cost them a quarter of the fund raise, or $60m ish.

So they have to put up $60m to own just 7% more of the company than they do now.

The maths of massive dilution does not work for any of the cornerstone investors.

So when Vincent Benoit was at Endeavour Mining he was in charge of developing several mines with La Mancha as the largest investor. Their approach was to sell minority stakes in each of the mines. That could also be an approach here. Endeavour link below

https://www.endeavourmining.com/our-business/reserves-and-resources

Sale of a stake in the Araguaia opco could also be a major source of funding.

By the way, if you are interested in who Vincent Benoit is, and what sort of background he had then his linkedin profile is here:

https://www.linkedin.com/in/vincent-benoit-04003011

Bebeto

CLNs may be part of the mechanism for sure. Orion have quite a lot already, I wonder if La Mancha and Glen would go for them? Ideally a new investor would take up CLNs, but who? Existing banks may want some as security rather than straight debt.

Lawrence

Worst funding case 4:1 dilution gives £250m mkt cap, half what it was not long ago.

No funding case forces company sale, I can't see less than £250m that way. Bear in mind the current price is the price for the free float, not the chunks belonging to the large investors.

What I expect COULD happen...

$250m needed

$50m from debt extension now... Banks show backing.

$100m from royalty sale, percentage and duration a key negotiable. 10 years at 7.5%, 5years at 10%?

Leaving $100m shortfall. I think if I was strategising for the company theybmay delay doing an equity raise using the two sources above to complete construction, only coming back to the market at the start of commissioning, maybe into Q2 next year. Why raise at these prices if you can avoid it? Take the risk off the table and come back later when everything is a bit calmer and less risky.

Just realised there was a lot of shooting in that post about JM. My mood is also far from rosy it seems!

Bebeto, worst case would be an asset sale. That's why the debt vs assets is an important consideration. As Gavster pointed out NAV (conservatively) is a multiple of market cap. Even in a fire sale scenario the assets go for multiples of where we are.

If you were on the market looking for nickel resources, would a 4m ton resource with a 70% built mine be appealing for $60m?

The pub landlord rightly points out that Vermelho was bought for peanuts... At the bottom of the nickel cycle, $8k a ton, it simply wasn't economically viable to develop or maintain at that level. Nickel is now $18k a ton, Indonesian easy to exploit resources are already starting to constrict, and EVs are coming. Vermelho is now worth more than the $8m HZM paid for it. Araguaia is valued with plant and equipment at ~$450m in the books, bearing in mind this value is lowered to avoid paying unnecessary tax!

Worst case finance deal this is worth more.

No finance deal, the assets are worth more.

Hard to see any scenario where this goes to zero for shareholders.

FWIW - whilst JM is the front man, I don't believe he has been actually running the company since the first find raise. He has little real power or influence. For a while I considered him a key man and a vulnerability, but having worked as an exec for PE backed companies the penny dropped that PE will have been calling the shots, using connections to do the hiring etc. La Mancha, Glen and Orion will have board members who really call the shots.

If that wasn't the case already JM wouldn't be in situ now. I strongly suspect La Mancha are calling the shots on how and when this was communicated, and also on how the fund raise is being done.

Specifically I suspect Vincent Benoit is the one board member defining the business and communication strategy here to the interests of La Mancha.

The point I am making is that we are already priced at the worst dilution case scenario.

Any debt, royalty, cost reduction, or other options reduce the dilution. Any increase in offering share price reduce dilution.

This is over sold against the worst case.

Ct - you are normally a smarter type. How do you see the dilution working given the starting positions of the existing holders, the funded company value (mkt cap), and production value.

From my point of view we are already at the share value of being diluted to oblivion.

Seeing as DJ can't do sums, let alone hard sums...

Take a worst case, all the money needs to be raised

from equity at current share price.

Money needed to be raised $240m

Currebt mkt cap $60m

Issue 4 shares for every one current share, resulting in 5x shares compared to today.

End mkt cap $300m, share price flat.

Fully funded mine build 9 months from production at fund raise. Assume all other funding remains in place.

NPV A1 and A2 still i.r.o. $2Bn, Vermelho still to come.

Mkt cap discount to NPV 85%.

A1 & A2 production mkt cap 80% + of NPV, $1.6Bn, call it 5x current mkt cap, or 5 x current share price.

Sorry should have said pay back schedule and interest accrual could well be separate. Like having a holiday on your mortgage payments until a future date...

Bebeto,

They did not publish the terms of the debt drawdown, the milestone conditions, or the payback triggering events or calendar.

Guessing - debt drawdown is likely based on a variety of economic and construction milestones.

Debt repayment could be calendar based or have event milestones like commissioning included. Paying debt back with interest makes no sense before construction is complete and all sides would have agreed on that.

You also don't understand net asset value vs debt. What is the current value of the mine? Nearest $50m will do, but best to use a parallel example or two. Try starting with Turquoise Hill as a starter for your go ogling.

Yep, you're just guessing. Pitching your doom laden crao like some know all blowhard.

None of us know the exact terms of the debt draw down, none of us know what the banks have recently said.

Dj, you have no idea at all what liquidity they have. Why do you keep pretending you do?

Mv01,

Quoting John Stuart Mill:

'Bad men need nothing more to compass their ends, than that good men should look on and do nothing.'

Sometimes being quiet is not such a good option.

Let me ask you a different question. Accepting that the lowest risk option is not being invested at all, but with zero possible reward, which is more risky now?

A) Buying shares expecting a deal to be done that will increase share value

Or

B) Shorting the stock expecting no deal and the share price to plummet

Assume that holding is effectively option A.