Member Info for pickedpeck

TT - I think by production Vermelho JV will be known and in the share value, DFS is bankable and they will be able to show NPV.

Don't forget $25m of this raise is about Vermelho.

Araguaia NPV at $21k / t Ni plus 20% or more of Vermelho NPV by production should be the mkt cap.

It will be interesting to see if the Araguaia NPV calculator gets updated, right now with Nickel at today's price their NPV calculator says Araguaia stage 1 NPV8 is $1.25Bn, or with stage 2 $2Bn.

Even with 3.7Bn shares the NPV of Araguaia stage 1 is still 25p per share or 39p with stage 2.

As production ramps the mine becomes a cash machine. Do the calcs based on today's price. Orion and others are not investing here to make some interest on convertibles or to try and run the mine themselves, they want multiples of return.

Someone suggested earlier that in the DFS they will only mine 9kt per period for the first four years. That includes the 31 month planned construction period leaving 17 months to mine 36kt. The following 4 periods show 20kt pa Ni equivalent production in the DFS, in other words they are planning forward loading production. Half truths of misunderstandings coming out today with regards to a document released ages ago.

Fetch all the worms out of the woodwork. What a load of tosh being written here today. Half truths and exaggerations, its amazing the levels some stoop to for entertainment.

Lots of things have changed today.

The spliit in the equity raise and the fact the bulk is from two finance houses rather than miners makes a takeover less likely unless it is at a good premium.

Vermelho DFS is funded meaning Vermelho will become a bankable asset. Surely a JV on that has to be Teck's ay here now. If they had been cornerstone they would have had to make a takeover offer, as would Glencore for that matter. The company has also implicitly put a production schedule on Vermelho.

Depending on mine build and whether the contingency is eaten into, HZM have working capital POST a1. No or minimal overruns means they already have the money for A2. Whilst HZM have not built a mine before, they have hired a team of experienced professionals that have. This is not a complex mine, it is a shallow open pit. We don't know the terms of the equipment purchases, but I would suggest the costs include installation.

Glen have not handed over much for the offtake, a nominal sum. We can speculate on terms, but at best it will be market rate, likely market rate less a defined discount, worst possible would be a fixed rate. I don't see them putting either a base or a cap on, I don't see any other Glencore deals like that and it would not favour either party. We may see the terms shortly.

The valuation will be all over the place for three months. Does anyone seriously think the company is worth less today than it was yesterday? The mines, yes plural, are now going to be built.

The convertible notes do have harsh terms, but only if they are paid off and not converted. I'd suggest conversion is more likely.

Lots of positives and some negatives. On balance I am looking to add more.

I'm with you Craigie. This is a company that has just raised multiples of its mkt cap to build its first mine. I can't think of another example of that happening, buyouts, partnerships yes. Minnow to miner with control still in place - not so much.

A few quick points - I would think 7.5p would be a close to average price if you took 12 months as the period. That's not unreasonable given how long this has been going on.

JM and Execs getting up to 8% - I am fine with this. JM is not an employee, he is effectively the company. Imagine if he was only tied in on a month's notice. Its a realistic amount, and will have vesting limits imposed

Glencore signed a 10 year off take. No need to market the product.

Vermelho DFS is funded, and fund raising targets production within 5 years to avoid additional costs.

Araguaia 2 is back in the frame - They will be able to fund it immediately A1 starts producing and covering costs, they will effectively already have the capital. This is an acceleration for A2 in my view, even though they are not painting it that way.

Dilution is higher than hoped, but I will take that in order to get the mines open.

Mention of share consolidation may also imply consideration of a move to the main market. Stopping being a penny stock as soon as possible please.

La Mancha, Orion, and Glencore are sticky holders. La Mancha's portfolio has 3-6 year investments, Glencore are not a seller here. Orion have been on record as looking for 5-10x returns.

I am sat on 10m shares, have no intention to sell any. I may subscribe to the offer if able to.

Sorry about the off topic all...

Sasa - I like them. Strong net cash, exploration upside, profitable, safe jurisdiction, big strong holders reducing liquidity and creating a squeeze for stock, plus a hefty dividend. Not much not to like.

Copper - ATYM.

Wasa, I am up to 10 on the nose now. I am stopping at that, I have some more fire power if things change dramatically but otherwise that's what I will stick at.

I am not sure I agree we would get a price that high yet, I have seen and been involved in too many cheap take outs to quite believe that we will get fair value, there are too many vested interests in taking a lower price.

Its a bit strange, I was buying here in the 2s, then piled in when in the 1s, then more still in the 3s and 4s. Most of the shares I hold were at those kind of prices, my average is still just below 4.

But today when it came to it, despite having around 100 companies on loose watch, and a dozen or so on a more detailed research level, even at 8.5 I see this as offering the best value available right now. I could make a case for short term returns as the next few weeks should see finance complete, medium term as the mine is built and we start to get closer to production, and long term buyout or production in a rising nickel market should all see significant increments in value with progressively lower risk.

Anyone see any other opportunities with a similarly low risk profile and high potential reward? Am I missing something? Have to ask these questions of myself and others regularly. If I can justify keeping the shares in here, then I can justify buying more.

Finance is close, see this as a short, medium, and long term no brainer.
Will be adding more over the next week or so but also spreading risk a little too.

You watch, RNS tomorrow before I've moved the money around enough!

New process for making MHP from whole laterite ore bodies:

https://www.mining.com/indonesian-miner-to-employ-next-generation-nickel-extraction-technology/

Interesting that there is now no mention of a second process line at Araguaia, but there is at Vermelho.
If there has been a strategy shift then the company should be open about it.

Fair play Ivor. The silence is deafening.

One thing the RNS doesn't say is anything at all about Phase 1 or Phase 2 of Araguaia construction. Araguaia has just become Araguaia. It's like as if they now don't expect to be building...

In fact no forward looking statements at all.

Wouldn't be surprised to see a double RNS tomorrow, it will be hard to be so close to concluding finance and not cover it in the results. Six weeks since announcing credit approval, getting close to the December hiatus, and also needing to get the project going with some pace in early 2022.

If not a direct double announcement, we should at least get some indication of when an announcement will be made.

Here are some more:

Artemis Gold acquiring post feasibility / pre-construction Blackwater project https://www.artemisgoldinc.com/news/artemis-to-acquire-blackwater-project-from-new-gold

Shandong bought Cardinal Resources Post FS pre finance after a bidding war. Licenses ratified to mine Jul 20th, bid received Jul 23rd. Check out the news flow, imagine the same here. If you looks closely you can see the shadow of HZM news releases there! :) https://www.cardinalresources.com.au/asx-announcements/2020-2/

Its a bad example and don't look at it too hard, but that ol Oyu Tolgoi chestnut is not an entirely (just mostly) bad example.

In 2010 Rio Tinto owned 22% when Capex was raised. In December that year they doubled their holding. Production began 2013.

The Newcrest purchase of Pretium was also a similar strategy, although Pretium is a producer Newcrest have bought for the optionality on the land bank hence the decent share price premium.

Here is the best example I know of, in Brazil, not producing, cornerstone, equity, blah blah blah...

https://www.globenewswire.com/en/news-release/2021/08/09/2277325/0/en/G-Mining-Ventures-to-Acquire-Tocantinzinho-Gold-Project-From-Eldorado-Gold.html

EVs SchmeeVees. Araguaia is all about stainless steel

https://www.worldstainless.org/news/stainless-steel-production-increases-by-24-9-to-29-0-million-tons-in-the-first-half-year-of-2021/

Sure 2020 was depressed which makes the growth look bigger, but the growth is in every region not just Asia, and the little graph shows that every quarter this year has been higher than any quarter in any previous year.

TDT...

I think the reason to buy would be optionality on the approach, not just to Araguaia but Vermelho and Serra Do Tapa. There is more exploration to do, nowhere near the whole acreage has been drilled yet, only Vermelho really looks like a pin cushion.

The biggest risks in going from exploration to miner happen prior to the construction phase. Permits, infrastructure, fund raising are all much riskier than digging a hole, making some roads, and assembling a production plant flat pack. Once construction is started, why wait? The hard yards are done. The only question is on the Vermelho DFS, but I think everyone knows Vale's original work is very likely still close to valid.

If you were Anglo American, Rio Tinto, BHP or Teck... or even Vale, would you go with the current Araguaia plan? Or would you immediately put the money up for not only line 2 but maybe lines 3 & 4? Would you go for the current HZM plan in the PFS for Vermelho, or would you go for something closer to the original Vale plan for 46kt p.a.? Maybe even more given the resource in the ground and spiking demand. Would you leave SDT fallow waiting for cashflow, or would you look at options to import the raw ore to either Araguaia or Vermelho?

In the hands of a major, HZM could be sat on a greater than 100kt p.a. nickel district with multiple mines and 6-10 producing lines, and still have a near 40 year mine life without any further exploration. If nickel really breaks the $20k barrier and heads for $25k or higher, don't you think one of the really big operations would look at HZM and see dollar signs? 100kt p.a. is $2.5Bn annual revenue, likely more than $1.5Bn would be operating profit.

I agree in a normal, stable market everyone would be patient, form an orderly queue, and make polite enquiries. When LME runs dry and the price starts looking like its being controlled by NASA then all normal bets are off. At some point the blue touch paper will light, in my view that will happen well inside 2 years. HZM is a poorly kept global secret.

3 month and two year charts tell a story. We are due another spike sooner rather than later. The news on full finance will be out soon enough, its just a question of patience. Once that's done, then we should see offers coming in as the finance will be transferrable, it makes raising the cash to buy the company a lot cheaper than funding the company and the mine build.

I'm hoping we get to production, but I am expecting to be bought out in the next six months.

PS - I sold 100k last month to fund a personal project, but may well buy them back and then some when some money lands later this month. Hoping the cash arrives before the finance news.

Can't quite believe we are back at these levels. I know China has been depressing steel volumes due to power shortages, but this drop looks to be over done particularly after the half year results.

I'm back in again, sold at 550 , surely heading back there by March latest.

Bwana - no one outside the company knows who it will be. I think it's interesting that Paradigm Capital underwrote the February placing, but CIBC seems to have ended up with the bulk of the shares sold in Canada, unless they already held a good chunk and it just took them over the notifiable level of course. They appeared on the register post Feb with 3.5%, it could just be a holding in one of their funds and nothing more.

My real point was that there are lots of options, CIBC could be it, could be Paradigm, could be Cormark, could be Orion. I think we have some group think that it will be Teck simply because they are the big Canadian shareholder and have an NED, but all of their other junior investments appear to be direct share purchases with very limited complexity. I can't see an example of where they have behaved as a cornerstone.

Do we really think the Teck board would underpin a capitalisation event, can you imagine the board meeting? 'How much of the company are we buying?' - 'We do not know yet, depends how much we can flog to others as part of the fund raise'. It is more likely that Ms Dorri is there as an NED to watch over the existing investment and ward off incoming bids than to facilitate a funding round.

The Oyu Tolgoi example was there really only to illustrate that the big miners don't often act as finance Houses, even in their own JVs.

Like a few have said, we should know very soon. I'm thinking the answer is more likely to be a surprise than not though.