Member Info for pickedpeck

PGE_geo - Welcome to HZM world :)

I think Ford, GM, and Stellantis are well behind in the EV running, but VAG a lot less so. What all of them have in place and of value is a dealer network for sales and repairs. I agree on your point regarding the Japanese manufacturers, they focused on Hybrid and Hydrogen as possible options too long. On the other hand the Koreans seem far more ready to rock with their EVs, the Kia EV6 for example is a pretty nice and quick car with decent range, it seems to me that the Koreans will eat the Japanese manufacturers lunch as they have adopted and adapted quicker.

What is increasingly obvious though is that there are multiple minerals which will need to have new supply provided in order to shift from ICE to EV. I am sure there are curmudgeons that will descry the move, suggesting that petrol and diesel will be around a lot longer because of a lack of charging infrastructure, production costs, not everyone buying a new car, even no engine sound being dangerous... But, reality is we are at a horse vs automobile type of paradigm shift. The economics and environmental criteria stand up, so it will happen wishful thinking or not.

Nickel, Lithium, Cobalt (for now), even Manganese supplies will have to have a step change in production volumes for NCM chemistries, and even LFP will need a step up in Phosphates / Phosphoric acid production to maintain its market share. There simply isn't enough mineral production, or anywhere near, to feed every manufacturer.

As a result the car manufacturers are going upstream to secure production directly from miners. I don't see consortia forming, there will be too much dog eat dog going on for that. VAG and Ford have definitely formed mining investment groups and are actively looking for investments, I would be amazed if the others are not doing the same.

No, it's the expansion of the Nevada plant:

https://www.metaltechnews.com/story/2023/02/01/tech-bytes/giga-expansion-of-gigafactory-nevada/1216.html

Described as needing globally significant mineral supplies to feed it.

I'm a lot smaller with 45kish, did think of adding last week and I am kicking myself now that I didn't.

The figures and the price are misaligned now.

And... today HZM posted this:
https://twitter.com/HorizontePLC/status/1620357374132506624

Just as a crazy thought why wouldn't HZM optimise the Vermelho DFS for a car manufacturer to buy into? VW, Ford, GM, even Tesla are all committed for the near term to Nickel based batteries, LFP may be topping out as Phosphate starts to become a bottle neck.

This could be an example:
https://www.ft.com/content/84840136-d46f-42ff-8b47-3852cb6d8634

Just in case its not an open link here is a relevant excerpt from the article:

'General Motors will invest $650mn in a US lithium mine, a record investment by a carmaker to secure the raw materials used in electric vehicle batteries.
The US group will make an initial investment of $320mn by mid-2023 in return for exclusive rights to the first stage of lithium production at Lithium America’s Thacker Pass in the US state of Nevada and almost 10 per cent of the miner’s shares, with a further $330mn to follow later on.'

A similar offtake and equity deal for nickel from Vermelho would be nice. With that kind of investment HZM could even potentially build the mine themselves, once they have proven they can do it to time and budget with Araguaia.

Just to add to that, berenberg have reiterated a buy and 50p as a target based on today's numbers.

Widetiger(!), what on earth are you on about? It was so expected it jumped nearly 20% today. Wishing you had bought at 15p doesn't mean its not good value now.

The results seem pretty good, cash position is better than I thought it would be and Sports revenue growth from the US is well ahead of expectations. On these numbers I can see mid 30s by the end of Q1. If the quarterly numbers then continue to show the rapid growth in US based sports betting it will kick on again and maybe even get a target on its back.

Nearly back to 450, may see it today. I can see the price continuing to slowly rise to around 550 by the summer.

Those are pretty hefty growth numbers in revenue, as inflation and input costs stabilise they will lead to increased margins. I admit I am surprised the food business is so positive, I expected Primark to continue to knock it out of the park but thought foods would be challenged.

All depends when you buy and sell I guess. If you sit and hold forever then I can see it is boring, but on the other hand the three month chart shows a 20% plus gain. I bought a chunk... three months ago and am now pretty close to where I expected to sell them. Hopefully there will be a rinse and repeat, but if there isn't then I will put the money somewhere else.

They are matched trades, ie negotiated off market with no MM margin applied. That's why almost all of them have two transactions, one a buy, one a sell for the same amount. Only the 13:49 trade doesn't have a matched trade, so given the price movement probably a buy. Its unusual for so many to go through on one day, it implies someone wanted a lot of shares, and was prepared to hunt around for them.

The point of black swans is that they are not on the horizon, by definition they are completely unexpected.

I agree China vs Taiwan is a huge foreseeable risk though. Having said that the unified response of the West to Putin's failed invasion of Ukraine must be a deterrent. I think Putin and Xi Jinping underestimated the resolve and state of the Western governments, and likely were thinking new invasive world order here we come.

Some hefty trades today., not just the after hours ones.

10:57:12 17.50 750,000 18.25 19.00 131.25k
10:57:12 17.50 750,000 18.25 19.00 131.25k
15:11:12 18.00 500,000 18.25 19.00 90.00k
15:11:12 18.00 500,000 18.25 19.00 90.00k
13:58:22 18.30 150,000 18.00 18.50 27.45k
13:58:22 18.30 150,000 18.00 18.50 27.45k
13:49:20 18.30 300,000 18.00 18.50 54.90k
10:57:24 17.50 450,000 17.50 18.50 78.75k
10:57:24 17.50 450,000 17.50 18.50 78.75k
10:57:18 17.50 150,000 17.50 18.50 26.25k
10:57:18 17.50 150,000 17.50 18.50 26.25k

All but 13:49 look like matched trades. Definitely a non-standard day. £300k ish bought and sold in a handful of transactions.

Tony,
There is another way of looking at it. I have upwards of a million quid invested in the stock market, if I was only putting £10k into each then I would have to be able to research, pick, and monitor over 100 shares that I thought would be winners. I could go for funds, but in general paying a management fee for marginal stock picking performance doesn't sit well with me.
In my approach it is very unusual for me to hold as many as 10 companies, normally my money is split no more than 5 ways. That way I have time to watch each company like a hawk, know them inside and out and read everything they produce and much of what is said about them. I could probably compete on mastermind with HZM as my specialist subject!
Buffet says buy shares like you are buying the whole company, I think that's extremely good advice but there is only so much thorough due diligence that I have the capacity to manage. So when I find a company that I perceive as low risk, and wrongly valued by the market, and with a clear path to a value growth and realisation then I have little problem leaning into the research I have done and buying hefty chunks.

In the case of HZM I perceive risk as low (investors, shareholders, assets, jurisdiction, ESG, licensing, complexity, financing all secured), the market has it valued wrongly (mkt cap vs NPV, couldn't be much clearer), and there is a clear path to value realisation (Build first mine, FS for A2 and V, buy out).

In fact Jan 21 to Feb 21 the price rose over 100p in a month to above 600p briefly.

Spent Dec 2020 to April 2022 above 500p , if tomorrow's figures look good I can see recovery to at least there over the next week or two. The current price still has BME firmly in value territory.

Shanghai prices interesting too. At the start of December LME and SMM were almost aligned, but by the end of the month a large gap had opened. SMM now close to $35k/t with again a sustained uptrend, and unlike LME no real indication of stock levels is available.

Looks for all the world like Nornickel production might be reduced. Could be lots of reasons, but sanctions impacting machinery maintenance has to be a possibility. We wouldn't see it, but SMM would be first to reflect it. https://www.metal.com/Nickel/201102250239

Stock level is pretty low compared to historic figures too, points to low liquidity on LME plus much more trading elsewhere now. We are not getting to see a large percentage of the market, its like trying to judge a house by looking in the bathroom window.
The only real indicator of the wider market state is the price trades are going through at, but of course that can now relatively easily be manipulated by big enough players.

Perhaps a better indicator is that the longer settlement contracts are still significantly higher than the spot price, clearly expecting prices to rise further. Dec 26 just short of $35000 now for example. When we see the long term contracts level off with the spot price or even regress we will know where top is.

Price graph from Dec 2019 to today is interesting too. Can't say we are currently a mile off the long term trend (spikes aside), I'd estimate a straight line graph to today is getting close to $30k anyway. https://www.lme.com/Metals/Non-ferrous/LME-Nickel#Price+graphs

Blimey. Whatever next.

One trade so far today for the grand total of just over a hundred quid. It could get suspended and it would take a week to notice at this rate.

Got to think with the price move today that it will be. You'd suspect a leaky ship given the rise.