Member Info for pickedpeck

CIBC or Canadian Imperial Bank of Commerce are a shareholder in HZM following the February fund raise to the tune of 3.5% or 59.5m shares. Whilst everyone believes Teck or Glencore may be the cornerstone CIBC have more form. In case you don't know who CIBC are here is their latest investor presentation https://www.cibc.com/content/dam/about_cibc/investor_relations/pdfs/quarterly_results/2021/q321strategyinvestorpresentation-en.pdf
$65Bn mkt cap, $806Bn of assets. Biggest Canadian financial institution.
Mining Capital home page here : https://cibccm.com/en/industries/mining

Some of you may remember the Visual Capitalist article on the Lassonde Curve, and in particular the worked example of Oyu Tolgoi mine in Mongolia, a vast gold copper deposit. https://www.visualcapitalist.com/visualizing-the-life-cycle-of-a-mineral-discovery/

Oyu Tolgoi was turned into a mine by a Rio Tinto JV called Turquoise Hill (Oyu Tolgoi in English). Vancouver-based Turquoise Hill's capital is being provided by a syndicate of banks and export credit agencies in the form of loans that have terms of 12 to 15 years. (Sound familiar?) Canadian Imperial Bank of Commerce (CIBC) are among the key groups in the syndicate. Even Rio Tinto didn't fund their own mine JV at that scale, why would Teck behave differently? They are a miner not a finance house.

The absence of CIBC from the syndicate of banks named by HZM as providing capital is curious for a finance house that underpinned an equity raise just 8 months ago. If they aren't providing debt, why are they here? They are in the 'Go Big or Go Home' bracket of investors, way beyond the scale of Orion Mine Finance, in fact in a completely different league. In 2019 they were the world's largest M&A financial advisor in Metals and Mining with $18Bn+ of deals in Q1 2019 alone : https://www.globaldata.com/cibc-leads-globaldatas-top-10-global-ma-financial-adviser-league-table-in-metals-mining-sector-for-q1-2019/

So are they connected to HZM any other way? Check out the small print in https://minedocs.com/21/Araguaia-CP-012021.pdf on the analyst consensus Nickel price on the DFS page, CIBC provided the data. Or here, different (also wrong) data https://horizonteminerals.com/uk/en/nickel/

So we have the largest Canadian finance house, the world's largest M&A advisor in Metals and Mining, with a visible track record in funding major projects, who bought in to HZM in February, about the same time the company changed language about Strategic Investor vs Cornerstone.

The strategic could be CIBC. They popped up on the shareholders list after the last placing. The fact they got involved then means they could get involved now.

The cell chemistry of all-solid state cells is in general the same as of liquid electrolyte cells. Anode materials comprise carbon, titanates, Li-alloys and metallic lithium; cathode materials are Li-based oxides (LCO, NCA), and phosphates (LFP), or vanadium oxide.

As the objective with solid state is to improve energy density and reduce the need for cooling it is highly likely that NCA would be the preferred cathode material.

Strange inking a large nickel supy deal with Prony in the same week, having previously announced a supply chain deal wity BHP.

https://www.reuters.com/business/energy/prony-resources-says-tesla-has-agreed-multi-year-nickel-purchasing-deal-2021-10-13/

https://www.reuters.com/business/bhp-supply-nickel-tesla-australia-2021-07-21/

I suspect the switch may be driven by supply chain crunch as much as anything. Tesla recognising that there is going to be a mighty bun fight for Nickel and excusing its cheaper cars where possible.

Would be very suspicious if there is an RNS tomorrow morning.

Jakefletch. There are no results due, the drilling and exploration stage was years ago. The company has around $100Bn of nickel and cobalt in the ground all fully proven up.
They have moved past that stage and are now in the process of finalising finance to build the minto extract that lot. Expectation is that sometime in the next few weeks they will confirm the full finance package including equity partners and announce the construction plan and start dates.
The first mine and production line is expected to start producing nickel in 2 years time, with a second phase 18 months or so later. A further much bigger mine will follow but will need a major partner.
So the next RNS could be the finance package, a partnership announcement, or receipt of an offer for the company, any one of which should add at least 50% to the valuation.

I've noticed SMM is actually going the other way too. I haven't found anywhere I can see a plot of both prices on the same chart, it would be interesting to see if there is a y leading or lagging correlation.

Looks like TDT called it right, LME stocks really are dwindling, prices will spike not just rise shortly.

D220 - I don't understand the disconnect either. Maybe a renaming to Horizonte Battery Metals, or discovering 26oz of gold on the property, maybe even, shock horror, starting to build the mine may help. It's conclusive proof if ever it was needed that the market is irrational.

Wasa - yep that's my point. I am worried we are going to get taken out.

I actually don't care too much about the equity price, I'd just rather the deal was done sooner than later. The equity deal makes HZM even more defensible against short term low ball takeover which is the biggest barrier to maximum value for us PIs.
A raise at 8p, 10p, or 12p will all be low compared to share price in 2 years. The day the mine turns out first product the sp will be at least 30p, and maybe a lot higher depending on Vermelho progress.
This just takes the patience of a zen master... But is now as close to inevitable as you get on the market.

Vermelho has Saprolite ore also, that is possible to process via RKEF. It may be a moot point as the Saprolite is underneath the Limonite.It would also make no sense to reduce the available nickel in the ore bodies by such a large percentage to process only via RKEF

TDT - what do you think explains the offset between LME and SMM pricing for Nickel Briquettes?

SMM has been between $22.5 and $23.5 k for a couple of months with the occasional excursion.

LME is hovering between $18.5 and $20.5k in the same period, with pricing seemingly unlinked to SMM.

Is it just imprt / export / transport costs? Still seems a big difference.

Minecheck - you're just flat wrong and can't admit it. There is no point trying to debate it with you as you just change what you said each time your point is rebuffed.

The point was China is aggressively pursuing renewable energy as a policy. There are lots of reasons for them to do this, and lots of evidence that is what they intend to do. They like everyone else can't click their fingers and make it happen overnight, but their policy change of direction in targeting peak carbon for 2030 rather than 2060 is a major shift.
Coal will unfortunately be part of the mix until sufficient alternatives have been developed. There is now multi governmental consensus making the question when coal goes, not if. The US despite Bidens policy of removing carbon from the grid is burning more coal (Luke's articles). China is in the same boat, India is getting dirtier too.

'While the coal boom is dramatic, the moment may be short-lived.
Global pressure to curb carbon emissions remains strong, and in the long-term, “policy absolutely matters,” said Cara Bottorff, a senior energy sector analyst at the Sierra Club.'

All Xi Jinping has signalled is that major shift in policy towards renewables. I don't think it's lip service for all the reasons previously mentioned, but China like the US can't just change energy sources like changing railway points. Neither nation can close their economies down whilst making the change. I think Biden ha smor eof a problem than Xi Jinping. The US is not just the biggest emitter, but also has the biggest carbon sourcing corporations, and the most union jobs linked to the carbon economy, and some of the biggest business in the world which would be negatively affected by a change to renewables. That's why Bidens big climate speech was almost entity focused on American jobs, because he knows the opposite to be true and will have to work hard to prevent severe damage to the US economy.

So the capex and equity now covers both A1 and A2, we should probably start talking the whole business case.
Lawrence's reply to the tweet is hilarious BTW. Blimey Lawrence, there is no stopping you.

Wasa - ECAs generally give good finance rates. The cynic in me did wonder whether SEK being in tranche 2 were there to dilute the higher rates from the banks.
Looks like I was wrong on Volvo mine trucks, may be Scania instead.

Won't be these (although interesting) https://www.scania.com/uk/en/home/products/trucks/battery-electric-truck.html

More likely these:
https://www.scania.com/au/en/home/products-and-services/trucks/industries/mining/in-pit-work.html

Here is a video of Xi Jinping actually saying it.

"Xi Jinping: China to vigorously develop renewable energy - CGTN" https://news.cgtn.com/news/2021-10-12/Xi-Jinping-China-to-vigorously-develop-renewable-energy-14iTTThWzAs/index.html

I assume that's the actual evidence you were looking for, or perhaps you'd like him to write you a personal signed note?

No reason the Chinese government would see any reason to do anything about this:

https://www.bbc.co.uk/news/business-58879481

Or this:

https://www.aljazeera.com/news/2021/8/3/death-toll-in-chinas-henan-floods-triples-to-302-dozens-missing

And they will surely be ignoring this too:

https://www.bloomberg.com/news/articles/2021-10-07/china-s-energy-crisis-envelops-an-already-slowing-global-economy

The biggest threat to the Chinese state is its own people. If there is insufficient energy combined with excessively bad weather in harvest season and the harvest even partly fails, tens of millions will come close to starvation.

China has seen its heaviest rainfall ever this year, with the clear reason climate change. Coal fired power in China is now seen as not only a mistake from a climate point of view, but potentially unreliable. Power rationing, brown outs, even **** downs are disrupting Chinese manufacturing, commodities prices, and jobs. The recent nickel hiccough is due to Chinese power shortages.

Ironic don't you think that climate change driven flooding subsequently disrupting coal supply is causing a drop in the price of nickel (and other commodities) to fall?

One thing about renewable energy is that its renewable. You don't have to ship wind about for turbines, water for hydro, make the tides go in our out, or even make the sun shine. Even the fact it is distributed across many sites makes it more resilient to disaster than large power stations. Similarly large scale storage is better distributed around the grid than held centrally if you are seeking resilience.

I don't think the Chinese are moving towards renewables for some greater greener world crusade, I think they are doing it for the purpose of staying in power. Continuing their current energy strategy is simply not an option at this stage, they can clearly see the writing on the wall. Of all the major world economies they are probably uniquely positioned to tackle this problem. They have the money, the engineers, the resources, its just a question of the will to do it.

Just to make it absolutely clear, this is not about selling a few Teslas. This is about a global shift in the nature of power generation and consumption. Cars are frankly a sideshow, but even there China is taking a different high volume low cost approach:

https://insideevs.com/news/525542/china-wuling-hongguang-sales-july2021/

Wow. I'd decided not to post until the next slice of news as I thought its all been said here about the case, the likely outxome for the company and investors. But I can't read that utter tosh and let it go.

China is having a power crisis because unprecedented levels of rain are flooding their coal.mining districts, shutting mines, causing landslides and cutting communication and transport links.
I'm no fan of Xi, but this is clearly a message from a totalitarian state (with no need for placating voters) that climate change is real and will be just as disruptive for China as anywhere else, and that action has to be taken now. For China to be saying this, after years of massive investment in new coal plants, is a massive turnaround and change in policy direction.
If we are at peak anything, its peak head inserted anally climate change denial. The green revolution hasn't peaked, it hasn't even really got going yet.
Enough technology to make a change already exists. Gas boilers can be replaced by air and ground source heat pumps. Wave, wind, tidal, geothermal, solar and hydro power projects can generate a step change in electricity capacity we haven't seen in generations (!).

I am so tired of seeing unqualified moronic posts denying there is anything occurring, when the evidence to the contrary is all around us. Wake up, smell the coffee, start making a difference FFS.

Anyone handy enough to calculate the effect of the lower cost of capital on the NPV? The discount rate of 8% could / should be adjusted to 4% given the average cost of finance across the two tranches of debt. 8 was rightly conservative, 4 is what we have assuming LIBOR doesn't move dramatically.

Wasa - the vast majority of my direct share holdings are currently in HZM, about 75% or so. I also hold a number of other small companies, plus keep a float pot normally held in HSBA as a proxy for cash. Outside of those stocks I have some additional 'safe' investments, which could read as underperforming safety net which makes taking significant stock risks acceptable. Then there is property, a small fleet of vehicles, a business or two etc.