Member Info for pickedpeck

Wasa - I know it's usual for the market to define the raise price, but I just don't think that's the case here.

You can buy a few shares at 20p ish, but you can't buy 10% of the company at that price. The relative illiquidity here adds some value. It's a hard pitch but not impossible to get away, particularly to existing investors. Panicked public and loose holding institutions whisking 10-20% of the current shares in issue around won't necessarily define a raise which effectively creates a different corporate structure.

Rover, don't beat yourself up, plenty of people were blindsided by this, myself included, not least caused by JMs 'cheery' progress reports.

The question is always 'what to do next' rather than 'what should I have done'. You can learn from the past but there is no point dwelling on it.

For myself I sold on the way down just below my original average, all four years of paper profit wiped out in an hour and a half on Monday. Then I bought the stake back on Wednesday, and now have more shares than I started with.

The latter decision is because I think it is highly

probable that a finance deal will be done and the mine completed, and if it is the share price will be a lot higher than this fairly quickly. However it is also possible that may not be the case for whatever reason, not least an unfavourable deal.

We will not really understand the risk now until we are able to view it in hindsight in a couple of months.

So we are in high risk high reward territory. It is effectively a completely different proposition than it was just a week ago.

Consolidation was 20:1 not 10:1, 7p a share is equivalent to 140p now.

Also... If they do sell part of the asset (operating company) then I don't believe it will be a majority holding. They will use other means to ensure enough is raised.

A minority share also allows them to buy the asset back in future should they choose to do so.

Also with a book build for this not necessarily expect the equity to go for a discount. You couldn't buy say 10 million shares on the open market for the current price as it would blow the doors off the price, so weirdly and maybe counter intuitively the book build may be done at a premium to market with a post finance deal price in mind rather than current.

I'd expect a partial sale of the opco/asset, plus a debt extension from the banks, plus a book build equity raise.

Given there are flexible options, and multiple cornerstone investors with equity aligned interests, I see a deal being done that does not wipe out equity.

Book build at 50p, 25% asset sale, and $50m debt extension would be more than enough to plug the hole.

The things stopping them taking the lot is the large holdings of Orion and La Mancha, both of which holding ordinary equity are in the same boat as PIs in terms of not allowing Glencore to simply buy out the asset. If they did they would be both wiped out too. Glen own 18%ish, not enough to force any issue on shareholders.

Also don't think that a sale of the asset would be non competitive with Glen getting an inside track. I am sure Vale would absolutely be interested for one.

A couple of last thoughts then I am shutting up...

Most of the doomsayers, if not all of them, here have no stake in the future. That doesn't align them with those that do, or the company management, or the company stakeholders who all have an interest in the company not only surviving but reviving. They are not here to help, but to either short or mock. Whatever floats your boat, but unless it is rational and backed up by facts and data then ignore it.

At the current price the net assets are being offered at least a 75% discount. Yes it could cost a buyer more to build, but don't dismiss a Vale, BHP, Anglo etc at least having a sniff. Vale in particular have to be a candidate to take this out. If they find a price that satisfies La Mancha and Orion, plus the rest of us, then Glen would not be able to stop it. A take out price is not down here.

For the information of any of the new BUY BUY BUY / we are all doomed posters, the debts are with not one bank but the senior debt is with a consortium, plus two Export Credit Agencies. None of the banks are in a position to force anything, they could not as a functional group do anything at all with the two thirds built mine.

Neither is the company out of money, the work is still going on as we speak.

They managed to raise the initial capex of $577m against the assets and production. The companies that stumped that money up are not going to lose their shirts over extending it by 35%. We are not talking about an extra billion dollars. Each cornerstone has to come up with $70m. None of the big three cornerstones is in a position to shaft the other two even if they wanted to, and that saves PIs too.

A finance deal is very likely to get done in whatever form, and also very likely to leave the company still publicly listed. The NPV will fall in line with the increase in capital, but in the scale of the full A1, A2 and V NPVs this is a relatively small reduction.

Loads of potential mechanisms could apply:

For example Glencore could change their production discount to 10% from 5% for ten years. On 29kt production that is $225m at today's Ni price. They win if Nickel goes up, which all predictions believe it will.

The Araguaia Ltd company could issue shares (as someone pointed out below), meaning an investor could take a private stake in Araguaia diluting the parent company ownership.

Vermelho future production could be offered as a royalty, or it could be sold outright.

The banks may extend their loans a little.

Or we could have a book build equity raise, open to subscribers.

CLNs, more non voting rights shares, or some other non-direct equity mechanism could also apply.

Most likley though is some combination of two or more of the above. Spreading the sources spreads the risk.

I sold on the way down, but I have now bought back my original holding plus a third more on top. At this stage it is a speculative buy, but high risk and potentially high reward, with the downside limited by net asset value and the reluctance of the big stakeholders to lose out.

Price will be all over the place until the finance package is agreed and published. I expect more TR1ing from Fidelity and maybe Helikon, the volume sold wasn't enough for retail and fidelity alone.

When they get the finance package away the sp could go anywhere, depending on equity dilution vs debt.

Nope, HZM at last report had over $300m available to them. There are no bonds, only bank loans from a syndicate of five banks. Last reported draw down against the debt facility was $129m.

Please at least attempt to use facts.

Why? What did I miss?

If this goes to 1p or less I will buy the company myself. At least try and make your nonsense deramps believable.

It's a simple way to do it, but a buyer would more likely do a new NPV calc and then discount against that. Of we get 50% of a revised NPV taking into consideration the new funding requirement then we will be doing well.

Actually there is no point saying anything until the traders get bored and move on. This is being driven on trader whims now, almost all the bigger PI holders will have left.

This will go down until one of the major holders starts buying in the market, or until a finance package is announced to complete the mine, or until the bidding war to buy the company starts.

£45m mkt cap is 25% of the last stated net assets vs liabilities. $129m debt drawn down, property plant and equipment last stated value $449m, plus cash at hand.

The bond holders don't want, and very likely couldn't get, a more than half built mine.

The big and sticky equity holders are La Mancha, Glencore, Orion. Either of the first two could make an offer for the whole company, but to get accepted they would need the other two to agree it.

Most likely outcome is either a large debt extension with guarantees which will limit future profitability, or a trade sale for the whole company at a price acceptable to the holders above.

Willahr - that cash would be needed to complete against the original budget, there was still a long way to go. The 35% was I believe additional, not remaining to be spent.

Willahr - I don't think it matters much as their options to raise it are very limited. I can't see them being allowed more debt, certainly not at the levels needed. Equity will be hard because of existing stakes. Off take is already done and dusted taking any royalties with it. That leaves only whole or partial sale, or a very slim and unlikely chance of minority JV.

They have said at least 35% more capex and reviewing go live, ie opex, costs. Call it $200m capex and maybe another $50m opex.

The exit here is a sale of the whole company. NAV now far exceeds market cap. Glencore and La Mancha will want their money back from the last round, and Glen will want to retain the off take agreement. I suspect that's what is driving Canaccord's 90p speculative valuation, no coincidence that.

Given the stakes of the large holders, I can't see any other way out. They won't be able to raise more debt, and the size of equity raise needed would by default mean an offer if any of the existing holders were to participate, whilst they have enough combined clout to reject a low ball bid.

So hoist the for sale sign now and let's have done with it.

It's all speculation until we hear more. It's not $50m, and it's not likely to be $500m either. the big question is not how much although that will ultimately affect the final company value, but where it will come from.

Dj - you have been ignoring La Mancha'S stake. Any reason beyond just forgetting about it?

When they bought Vermelho for peanuts Ni was less than $8k a ton leaving Vale just $1k a ton in potential profit, and as they were already developing Goro it was essentially not only worthless but a liability. It will now have an up to date DFS on it, why not go look what Onca Puma sold for in a similar state when Ni was priced below what it is today?

If you think the company is worthless why not try and explain the balance sheet? $128m senior debt drawn.

I sold out yesterday morning, getting out at a price below my average which hurt after all this time in. I have no faith now In JM and believe whoever comes in with money will want a new management team.

But this is not even vaguely similar to RMM where tiny production always trailed costs with only the slimmest chance of ever making a profit.