Member Info for pickedpeck

CleverT - there is a different way of thinking about it. The slow news approach is about rewarding long term holders rather than creating market fluff to artificially bolster a price for traders.
The company is doing exactly what it set out to do, build shareholder value by building and expanding one mine and developing another one.
If you are an investor rather than a trader then all that really matters is the progress towards production, and the fielding of inbound interest, and the prospect of Vermelho coming online.

Notably :
First contract of 120 awarded to tier 1 supplier
Roads and bridges strengthened for heavy machinery access
Rainy season ends early April, ground will be broken then
Geotechnical drilling complete, foundations planned
Time line of project activity looks aggressive rather than passive - they are in a hurry!
Recruitment ramping up rapidly
First production aimed at Q4 2023 - 7 Months earlier than the DFS plan
Nickel price holding not just above $20k but now steady above $24k
Vermelho progressing towards go decision - must have funding offers on the table
Sibanye looking for Nickel targets in Brazil!

This is all really happening. Two years ago this kind of news seemed still in the pipe dream category.

I've put my money where my mouth is, this is now by far my largest investment. I expect at least a 3x return in two years, and over 5x in 5. The NPV8 for just Araguaia stages 1 and 2 with Ni at today's price ($25k) is $2.8Bn, IRR nearly 50%.
https://horizonteminerals.com/uk/en/npv_calculator/
We should be trading at or above that NPV in 3 years time. That's about 72c a share, or 53p. That allows no value at all for Vermelho, or Serra Do Tapa, or any further squeeze in Nickel, 9x today's price.

Mining.com never let actual facts get in the way of publishing a story. Horrendously inaccurate numbers quoted.

'Whilst we are focused on delivering stage one of the Project, our expanding team is also able to progress our expansion plans to double production at Araguaia alongside bringing Vermelho to a construction decision.'

Promising.

What's the probability of Norilsk nickel becoming sanctioned and unavailable on LME? How long would sanctions last?

It's a tricky one for sure.

Interesting that trades this size are delayed so long. I know they are bigger than the rest of the noise but they are not exactly earth shattering either.

Stuck a toe in the water and put £10k in today with a three year view.

I'm considering buying a decent chunk (for me) of RR. shares as a longer term investment (3-5yr window). There are a few questions stopping me:

1. How far of investable credit status are they given the disposals an cost reductions? £2Bn in to offset debt, an improved H2 performance of being actually cashflow positive, the Bergen sale concluding after the trading statement should all contribute to a more positive credit outlook. But how far are they really from getting a credit rating back?

2. I am assuming that 2022 will see a decent but not full recovery of flying hours, maybe back up to 70% of precovid levels? Will the new reduced cost base and recovering flying hours mean a much stronger 2022 for cashflow?

3. The B52 contract is interesting, but new Defence spending in the face of a resurgent Russia whether they decide to invade anywhere or (more likely) not should increase, a few more EJ200s on the order book perhaps? What will this do to the bottom line over the next three years?

4. SMR is a sideshow until its not. I see this as only really relevant to an investor when the first order is placed. Ditto RR Electrical, nice for the future but now a little irrelevant.

5. What else can they sell without destroying the revenue? Any more asset disposals to reduce debt in 2022?

Having written all those down, the only ones that really move the needle are 1 and 2. I guess we won't know the answers until the 24th, and even then it will be obscured in best RR gobbledygook.

Sorry, according to morningstar there is only one fairly unknown (Black Swan Fze) corporate holder. RP holds 30%, Black Swan 11.5%, nominee broker accounts and individuals after that.

What a strange concern. As wasarunner says, rate hikes would affect every citizen and business, why single out HZM as vulnerable to it? Similarly projecting a collapse in the commodities market. Yes if the world economy goes into high inflation, high interest rate based meltdown HZM like all other businesses with debt, ie nearly all of them, will be affected.

Having said that their projected production costs are lowest quartile in the nickel market, so three quarters of nickel miners will be loss making before HZM will be. The low cost (power, labour) Brazilian locale is also likely to even further reduce costs against all but a few suppliers.

So yes, if interest rates are hiked, HZM will have to repay more cash. But they will remain profitable, and in all but doomsday / end of civilised world scenarios they will be one of the last businesses in the sector standing.

Strummer,
Seems a long way from Beasley Street to here sometimes.

Do you reckon 'I am going to dinner in a nice Southern European restaurant' was a Spicy Pepperoni down the local Pizza Express? Stuffed crust?

Parthias,

I have to say this looks like a pretty clear cut case of some inside trading. Since early Jan (when company insiders would have known the full year performance) volume has increased significantly whilst the share price has fallen sharply. My original post was questioning this already visible sharp drop on no public news.

I think maybe this one needs a note to the FSA.

What cash burn? Underlying EBITDA 7m , net debt of only 1m with 9m of cash at hand. I don't see a placement yet, not least as it would reduce the ownership percentage by the CEO.

I think it is interesting that commercial contracts seem to not be delayed so much as not happening. The statement is a little confused, like there are contracts that have not materialised leaving inventory on hand unused. Switching back to government work is suggesting the move into the private sector was a bad one, but surely thats all about timing. If the pandemic does wind down this year then surely those private sector contracts would be up for grabs again?

Its an odd statement for sure.

Nonsense. Again.

I have to admit you are very persistent. Is this a hobby? Why are you doing this exactly? Is it out of the goodness of your heart saving the nation from that one poor investment decision, or do you have some other altruistic notion for what you are doing? Perhaps you just like the attention? Maybe you'd like to share with us what is motivating you. Did JM bully you at school perhaps, maybe a Nickel allergy? Are you Saudi Arabian and the future of your state is dependent on the failure of the EV market? Have you had a poor experience with stainless steel perhaps?

Share prices rise and fall based on buyers and sellers on a daily and weekly basis. Longer term companies attract or lose investors based on their business performance. I've been quietly buying more shares as an investment over the last week or so, I'm happy to hold them for 3 years or more if needed. I see the current price as very investable with a very strong three year return, but also with the option of an early exit through a sale highly likely. But what do I know? I'm a Private Investor (these days). I'm just another armchair mining expert, not a professional. So as an amateur I like the fact that the opinions of world class mining finance professionals are that this is investable at scale, and that they formed those opinions after months of due diligence with access to data I don't have. As a consequence I feel some comfort that my amateur opinion of the company may be correct as it is aligned with them.

On the other hand when I read totally unqualified and obviously biased opinion pieces written on bulletin boards like this one it doesn't sway my opinion an inch. I just question the motivation of the poster. I'd answer your nonsense points on finance or experience, but it hardly seems worth it as you know already you are not making a rational argument.

For example, the BoD have built many mines before, just not in HZM. All of them are career long mining industry veterans. The management team assembled by the BoD to build the mine have combined track records covering many mines, mostly in S America.Saying they don't know how to build a mine is like saying if Mo Salah signed for Real Madrid he would suddenly have forgotten how to play football, perhaps even what football is. Even if he did have sudden onset amnesia he wouldn't be the only one of the team who knew how to play, same as HZM with a broad experienced team of mining professionals who have played the game many times before.

The finance isn't punitive, the interest terms are much more favourable than I had originally anticipated. The Export Agency terms in particular are very low and make the overall finance very cheap.

I do notice you never mention or downplay nickel demand, or the valuation of the in the ground material. The RKEF process is also hard to attack, HZM are not taking any real risks there.

Well there's the reason. That's frustrating that no previous hint has been made but someone obviously knew.

They absolutely would, business is as usual until its not. There is no guarantee any deal would go through, and only after an agreement is made and signed would business plans change.
They also wouldn't stop the process without announcing a deal as it would send a clear signal out

Been in exactly that position more than once.

Obviously Vale could be a candidate too, especially as they already did the work on Vermelho! They could just go back to plan A.

I would speculate that with where nickel is now, and where it is heading, that there is a cacophony of incoming offers for both the company and Vermelho.
My bets would be on BHP, Anglo American, Sibanye after failing to close Santa Rita, and our very quiet shareholder Teck Resources. I don't think Glencore would be in the frame, but you never know.

Drop us a clue Jeremy!!

FTC - construction contract awards, recruitment progress, equipment orders, breaking ground, ESG approach for the build project, relocations, covid in Para, Vermelho DFS tenders, there is loads that will be going on. We are two months after finance now.

How come you often see GROC moving in the opposite direction to ALBA, like today for example. You'd think ALBA would shadow them.

The silence from the company is now prolonged. There are a few possible reasons:

1. Everyone is super busy getting the project going and the only things happening have previously been published anyway.

2. Inbound interest, lots of money looking for Nickel assets and the current ridiculous valuation of around $300m mkt cap with half that in cash makes us a sitting duck.

3. The comms officer has taken January and February as leave

4. Some other reason, like perhaps partnership on Vermelho, an acquisition, start of FS on Serra Do Tapa, whatever.

Basically something is going on that we are not seeing, and the company is not telling us either because it doesn't want to or because it can't, the latter being far more likely.