Member Info for pickedpeck

Of course I am taking a risk, call it a gamble if it makes you feel better. The game is from here, not where we were a month ago.

My risk/reward view is very very simple. From here there are very few options that collapse the value further, and a number of options for a potential fimmace deal that increase it significantly.

In other words the odds on the gamble now are higher than they will be post any finance deal. I am prepared to take that higher risk higher reward based on what we know of the company, it's position, and it's stakeholders.

Smart money waits for zero risk. Where did you pull that nonsense from?

Point me at an investment anywhere on the stock market that carries zero risk for any kind of actual reward.

Balancing Risk vs Reward is what you do on every stock on the market, every transaction is taken with that in mind whether consciously or not.

Here is see high risk aligned to high potential reward.

The risks are easy to see. They can't raise the money and have to sell the company assets. The money they need is too large, same outcome. To raise the money they use a massively dilutive open offer, all existing shareholders including the big three diluted into oblivion.

Are these risks likely to happen? In my opinion no, there are too many possible routes to avoid them and too many powerful vested interests.

The possible rewards are also easy to see. Any sort of reasonable finance deal sees partial share price recovery.

Al Murray describes his pub landlord persona as a "know-all know-nothing blowhard who knows the answer to every question even though he hasn't been asked any of them". Just saying as thought it might be relevant.

Still no numbers I see. More bogeyman BS.

OK let me start you off. There is a 30% holding limit where an investor in a company under rule 9 of the takeover code has to make an offer for the company. Price of the offer is the maximum price paid by the investor in the last 12 months.

Glencore, La Mancha, and Orion all have large enough holdings that they can only extend their percentage holding minimally before the above rule kicks in. I agree one of them might make an offer for the lot, but the other two would have to accept it. The rest of us would have to like it or lump it at that point. There isn't an obvious mechanism for one to buy the other two out for peanuts.

The debt holders have a vested interest in seeing the mine completed. HZM go under they lose their debt invested to date, all of the ECA debt plus however much draw down has been made, $129m in June. Fire sale pays pennies on the debt dollar, and equity holders including the big three probably lose everything.

So, explain how your paranoia may play out?

Investors lose at the point of sale, not sooner. The investors right now represent 60% of the shareholders. The other 40%, me included, are mostly speculators.

I ma not trying to convince myself of anything. I've put my money where my mouth is, and been open about it. How are you doing in comparison? This is not the first time I announced I sold nor that I bought back. I not skulking about here pretending to be the worst investment oracle ever.

Explain the exact mechanism where the big boys top up. How they go from existing % held and cash invested to whatever it is you think their new position will be and whatbthtabwould be worth to them. Explain the parts the consortium of five banks, 2 ECAs, and three cornerstone investors will all play. Do it using actual numbers and process involved rather than just going 'ooo Glencore are the bogeyman, they are going to get you'.

Of course they knew earlier. Only an idiot would think otherwise. In the same position I would have held off announcing as long as possibly allowed by the Nomad in order to gain as much knowledge on the issue and fix as possible. I'd say they probably got first sight of the issue maybe as much as 2 months earlier

DJ, you are one of the worst pontificators I have ever come across. Your level of actual knowledge is almost nil here, your posts seem little more than gloomy narcissism.

To avoid any doubts, I sold my holding on the way down. I have put about half the money raised back in at an average of now below 20p. i see that as a risk, I won't encourage others to do the same.

I'm basing my risk on what we actually know rather than the tripe posted here by you and others.

Ice-cream,

Agreed, and whilst there is some flexibility their Nomad would have forced them to release no later than a certain time period after the issue became apparent.

IJT,

Firstly whilst the RNS was badly worded, rushed, and naive I suspect the company had no anticipation of the market reaction to it. I don't believe for a second it was malicious. Smaller shareholders, institutional and private, took that news very negatively and sold off the shares, the company didn't do that directly, even though it would be easy to argue they should have expected it to happen.

If the company had announced the issue and a plan to raise the money at the same time we wouldn't be sat at this share price. We would almost certainly be lower than the price before the RNS, but not down here.

Also destruction implies permanence. There is the possibility that the company can raise the necessary finance without massive share value destruction. Royalties, debt, prepayments, warrants etc etc. I don't think we can say this damage is permanent yet.

Lastly it depends who you think the shareholders are that the company has loyalty to. It's not you or I, it's the 60% held by the three cornerstones plus Helikon, whereas the current share price is entirely due to the other 40% of smaller holders. Of the 4 largest holders only Helikon have sold a small quantity. So (maybe half of the) 40% of holders have driven down the price 80%, I'm not sure if I was in the company's shoes I would be focusing on that 40% much, other than they effect the price an equity raise can be done at.

Imagine for a moment the three cornerstones all announce that they are going to buy shares to just below 30% each including underwriting Amy equity raise, and that half the finance needed was going to come from a royalty, a quarter from debt and the balance from an open offer post cornerstone buy back. This may or may not happen, but it wouldn't leave the share price down here.

Some sort of deal will be done. There are too mnay wealthy and heavily invested stakeholders for it not to be.

As a wild assed guess (as don't know), but the A2 DFS being delayed coincides with the potential for extra cost emerging.

It may be that the water supply and dam turned out to be only adequate for A1 / not adequate for A2. It is very likely a lot cheaper (!) to fix before A1 go live than having a prolonged A1 shut down later (after entering production) to increase the supply enough for A2.

It is also possible that a contractor just effed up the design and delivery, not excluding the above, that was hinted at in the RNS. They would not have been able to point a finger as if that is so then law suits will start flying around and an allegation may prejudice an outcome.

Probably better to talk Mkt cap for now rather than share price as no one actually knows the number of shares that will be in circulation.

Mkt cap for a 2/3rds built mine, 4Mt in the ground resource, prior to the slide before the RNS was over £400m. Now it is £50m. That valuation given approximately $130m of debt vs cash in hand + assets makes little sense. On a pure value point of view this is way oversold.

There will likely be additional dilution, but the effect of that may be limited by funds raised by alternate means.

Header, Nickel production is dependent on coking coal, currently trading at almost half it's peak from last year. Where do you get coal prices will put the AISC up?

Labour costs are up, but without knowing the % of the total cost labour represents it's hard to estimate the impact. Other operating costs, for example electricity, are generally fixed on long term contracts.

I guess we won't know the new actual AISC until the first half year production is in.

Weird how seemingly positive news here has no discernible effect on the share price. Mine workings drained, several prospects moving forward, shares in GROC becoming progressively more valuable, yet the market is not interested at all.

Seems like some of the explosives for the blast testing might be needed to move the share price!

It also helps that Canadian investors and the TSX in general are more pro mining juniors than anywhere else with the possible exception of Australia. Canadian Nickel on AIM wouldn't have the same mkt cap. In some ways it's sad that HZMs TSX listing is a sideshow rather than the main listing.

Theorist - you're vehemently agreeing with me!

Sale of a chunk of opco would be one way ahead, but I think the large shareholders would regard 40% of the opco as being worth more than $200m despite the current mkt cap here. They would insist on a new NPV calculation, and discount against that given the money needed. I suspect that would be more like 25% for $200m.

I would still rather see a mixed and staged route. They don't need to raise the money now they could continue into next year with agreement from the banks, and raise finance via royalty, streaming, opco shares, or a warrants issue. Equity maybe for the last slice of the pie once the sp has recovered somewhat.

Fair sized drok today on no visible news. Anyone know why?

I think a few things are likely or possible. They may provide more clarity on the nature of the problem and the money and plan to fix it. They may also raise money in parts, for example they may have debt extension , royalty, and equity raise as their plan but do each at different times and stages of progress.

Calm after the storm. Whilst it will be several weeks to finance, I'd expect some sort of interim announcement to try and convey some clarity about half way to then. Early next week?

Synthomer nominal value changed from 10p to 1p as part of the rights issue. The share consolidation and values worked around this. I think there may be some confusion over what you can do with nominal values vs share price.

'Proposed 6 for 1 Rights Issue of 140,200,818 New Ordinary Shares at 197 pence per New Ordinary Share and Proposed Capital Reorganisation of 1 New Ordinary Share of 1 pence nominal value for every 20 Existing Ordinary Shares of 10 pence nominal value'

I think off take is a buyer agreement, ie take all product and pay x, whereas a royalty is based on a % of revenue. Two separate legal constructs.

Sorry, to elaborate a little..

Firstly Orion have a 2. 5% royalty already that they paid $25m for. Glencore have an off take for 100% of production at LME rate less a small discount (they got this for peanuts in my view).

So Glen would buy product at minehead for LME less 5%, pay HZM, HZM then pay the royalty to Orion and whoever else.

Using the current $18.25k from LME, HZM get $17.34k. 2.5% to Orion, $433, leaving $16.9k. 10% royalty/stream would take that down to $15.2k, still way above AISC which despite inflation should still be under $10k.