Member Info for pickedpeck

Never seen a more muted response to a set of results, HZM is sailing along at the moment like some swan gliding across a financial lake. At some point it will take off, no one is quite sure when and the swan is not giving any clues apart from the occasional bubble or two.

This is getting bizarre now. Just a quick recap on the last six months...

- Finance deal concluded raising capital, contingency, and working capital for building their first mine. Full diligence executed by not one but at least 8 leading mine finance organisations, two of which have taken major equity positions.

- Finance for FS and Permitting of Vermelho project for a future royalty fee completed. FS starting in 2022.

- Nickel setting new record highs, demand continuing to far outstrip supply. No possibility of that not remaining the case for the foreseeable future as demand growth far larger than new projects coming on line.

- Purchase of new but second hand discounted equipment reducing the cost and accelerating the time line of Araguaia line 2.

- Early construction works and major contracts awarded. Roads and bridges strengthened, all permits and licenses in place. The mine is now in the being built stage. Experienced Tier 1 contractors assigned major build elements.

- Recruitment of a strong owners team to oversee the mine build. Strong board, management team, and project team all now in place.

Share price reaction... Think swan. Nothing to see here... you would think. Is there a lower risk higher potential reward stock on the market right now? Hard to see a downside from here, but someone is doing as the price is now very obviously no longer reflecting the potential.

Anyone got an opinion on whether or not HSBC will be excessively exposed to the China property bubble? Seems like it could bear the brunt of a property crash there not unlike 2008. It's not quite sub prime but lenders have been making loans based on ever escalating property prices which have now started to reverse.

Most are sulfide deposits, Jacaré is the most equivalent where the grades are more or less in line with Araguaia.

To be fair as individual projects Araguaia and Vermelho wouldn't make the list, whereas Horizonte as a whole obviously would. Araguaia Contained nickel 1,525kt, Vermelho 1,526kt (weirdly close).

There was $25m raised for the DFS at the same time as the finance deal was announced. Orion are funding it from memory. It may be the cost if the PFS some time ago, haven't checked, but on the other hand it could be just a random wrong number.

Better to do actual research, have a look at this page on the climate for Alto Araguaia river valley.

https://weatherspark.com/y/29595/Average-Weather-in-Alto-Araguaia-Brazil-Year-Round

Quoting from it...

'In Alto Araguaia, the average percentage of the sky covered by clouds experiences extreme seasonal variation over the course of the year.

The clearer part of the year in Alto Araguaia begins around 17 April and lasts for 5.9 months, ending around 12 October.

The clearest month of the year in Alto Araguaia is August, during which on average the sky is clear, mostly clear, or partly cloudy 77% of the time.

The cloudier part of the year begins around 12 October and lasts for 6.1 months, ending around 17 April.

The cloudiest month of the year in Alto Araguaia is January, during which on average the sky is overcast or mostly cloudy 83% of the time.'

Cloudy translates to wet season, seems the average end of that is 17th of April. Obviously every year will be slightly different, some years the rainy season will last longer and in others less. But an average of 17th of April definitely places it early Q2.

The suddenly regained 2 months.

I've been holding a portion of my HZM bag for three years too. I just looked, on the 23rd of March 2019 the share price was 2.24, almost exactly one third of today's price.

I'm happy holding for the next three years if, as seems highly likely, it more than triples again.

For a criticism of a strategy, its a bit of a lame one.

Seems to be settling at or around $28k a ton, it's almost as if the engineer of the HZM NPV calculator knew...

Drifting slowly back up, anyone got a view on what we can expect? Personally I think they may outperform expectations for 2021 but make some ominous sounding noises about 2022 and in particular power costs.

Will we see a repeat of the dividend policy or will they be more circumspect?

Not until there is at least a new Feasibility Study which will be started this year. HZM raised funds for that in the recent round, $25m to be precise. That will validate the viability of Vermelho as a source of battery nickel and make it investible.

Volkswagen haven't invested in a mine, they have done a deal with Tsingshan, the biggest nickel producer, who in turn have much of their mining in Indonesia. Tsingshan also have a deal with Nickel Mines in Australia which hasn't been going swimmingly lately https://www.bloomberg.com/news/articles/2022-03-09/nickel-miner-with-tsingshan-ties-sinks-23-before-trading-paused

In doing a deal with Tsingshan VW have shown ethical sourcing of nickel is not that important to them, Indonesian practices are appalling in environmental terms with coal power and poor pollution control. Nickel Mines is much better, but Tsingshan's process for getting battery grade metal from nickel matte is also a very energy intensive and less environmentally friendly process.

Interesting deal. May set the tone. Expect BHP (Tesla) and Glencore https://www.glencore.com/dam/jcr:ca562b57-b667-4321-93ad-dbb0953a165f/ev-a-disruptive-force-underpinning-our-commodities.pdf to play major roles also. Ford, GM, Toyota etc will do deals with the big players with multiple sources rather than a development minnow like HZM. That's why our offtake deal with Glencore for all production at market rate is so important. HZM do not have the negotiating power that a Glencore possesses, but does mean we have a guaranteed route to market and corresponding market rate revenue source.

I see someone got suckered into buying at 400 on the Bell. 382 mid rather than 383, but not a bad shout considering.

Araguaia is a ferronickel project with delivery for the stainless steel industry and of marginal interest to vehicle builders.

Vermelho, which could be of interest in battery supply chain, is a long way off. A full (new) FS will start this year, but production not likely until 2025 or beyond.

When an offer comes, and at some point sooner or later it will, it will very likely be from a much larger miner. Glencore and Teck are obviously near the front of that queue, but BHP, Anglo American and others will be looking out for additional production. The of course there is Vale, their back yard, but a massive thing for them to buy back one of their own assets at a huge increased price.

Weird UT trade falsely bumped the price. Real price probably 383 mid. Should open up on that on Monday though.

Last Friday was pretty dramatic for Nickel, a week later its surprising (tk me at least) how the nickel price has held up. If it stays at this price we will have artisanal miners digging the stuff up!

The NPV calculator on the HZM site needs re-engineering, it.might not hold on to $40k a ton for long but I can see $30k being maintained through most if this year, particularly as I believe even if hostilities end soon in Ukraine it will be a long while before Putin is gone, and correspondingly long before Russian Nickel is allowed back intk the LME.

Craig,

I agree on the source of the trades. The price has drifted up a little over the last couple of weeks but did bounce pretty hard off 7 suggesting as soon as we clear that there may be another round of sellers wanting to dump their placing stock. I’m hoping that JM’s rounds at the BMO conference drum up some new institutional open market money, or the brokers start earning their fees.

On that latter point I have to say I am more than a bit disappointed with both Peel Hunt and Canaccord coverage, full of pessimism and inaccuracies.

Looks like the nav gap has closed, trajectory a bit more positive at last.

FTC / soundbuy / oily - I expect a bid if it comes to be very aggressive. Any potential buyer will know they won't get it for a 30% share price premium. I do think the value may be lower than we wish though, I'd think an initial bid would be in the low teens.

Just back to the share for a moment...

Quite a lot of trades at 6.75 today, and then a much larger than usual UT despite an overall moderate volume day. Seems like some agreed cross deals. The implication is ii movement, as that kind of negotiated trade is not normally the realm of the pi.

I've done the opposite to Strummer by the way, I've steadily accumulated whilst the price has been irrationally (in my view) depressed. I'm sat on over 11m shares now. My reason is I can't help but think this must attract a bid at some point, and 8am on the day it does will be too late. Its just too valuable an asset to flounder at these levels for long. Several brokers have tipped the price to double or more on a 12 month view, but any bid would surely have to start above that.

Anyway, each to their own.

Back up above 500 now, looks like a free divi after all.

Oh I don't know. Would you opt for own brand condoms over durex? Calgo for washing machines, Vanish, Brasso, KY jelly, the list goes on and on. Some of those brands are synonymous with their function, even in down times most of RBs key brands would be sustained.