Member Info for pickedpeck

Slightly odd being blue on what looks like tiny volume. Unless there is an order in the background there is no reason for the bounce other than maybe because yesterday there was no reason for the fall.

Nice read this one Luke, thanks for posting. Anyone interested here should download this free magazine, well if you have even the slightest interest in engineering, technology, or sustainability you should. ??

John, even for a moment accepting the basis of your post as valid, shouldn't we be excited that one of the lowest carbon emission, highest ESG credential sources of Nickel on the planet is going to be mined and used to help power the transition away from a carbon economy to one driven by renewable energy?

What's your actual point? Don't I vest to make money, or don't invest here to make money?

I've seen some irrational rubbish on these boards over the years but don't invest because it's greedy seems a little futile. Cash in your pension, empty out your savings accounts, give away your property and goods, become a hermit. Is that your message?

Did you look at FPX Nickel, the company the article recommended. They have a corporate presentation : https://fpxnickel.com/wp-content/uploads/2017/08/FPX-Nickel-Corporate-Presentation.pdf

Its actually really interesting. In order to look viable against HZM they have had to skew the figures. They are at PEA stage, but are comparing to HZM Araguaia Phase 1 only despite Araguaia full mine PFS. They ignore Phase 2, shorten the mine life, ignore the fact they need 4 x as much Capex, and also ignore Vermelho. When a competitor basically has to lie to look better than you that's serious flattery.

To be fair, they have a very interesting long term early stage project, its in Canada, its a large resource, and has opportunity for carbon benefits. But its not as good as HZM, nowhere near the development stage, not as big, not as profitable, and has far higher Capex requirements and correspondingly a much lower IRR.

What their presentation tells me is that not only is HZM the absolute stand out nickel play globally, but that everyone in the sector knows it.

Its a proper Mr Burns moment. Meh he heh... Buy your get rich quick tickets here!

Long term small volume holder here. Thought I'd throw my 2p (now 5p) worth in.

The discovery of Pegmatitic rocks is not exciting on its own, Pegmatitic rocks are fairly common. However discovering a layer 20-30m thick of pegmaitic rock suggests economic viability once mineralisation is established. That's potential for a conformed resource value, hence the geologists getting excited and the RNS. Depending what's in the rocks, spodumene, gem stones, whatever, having that volume makes it mineable. Speculation will be rife until the land reports come back, but its the equivalent of striking a gusher.

Its a long way from being a bankable asset, but less far than it was yesterday.

Seems like a rehash of public domain stuff. Just a short wait here now.

I'm hoping to hear about Vermelho DFS in Q4, Araguaia feels like a done deal now.

The other thing that has changed is that for a long time we were told the finance deal would be announced in one go. I agree no mention of the equity raise today was interesting, the interview was short but more was missed out than included.

Blimey.

Welcome back off your holidays ATD.

Interesting, big sale order remaining on the books to slow the reaction? Still think this is being deliberately held back, the 100,000 sells are still there.

Zebbo - No.

The five banks mandated to secure the debt are all international, JM has said an additional Brazilian bank will also participate. I think he quantity of their participation was stated somewhere but I don't recall the numbers.

So say no that it will be done by the end of September would be a catastrophically stupid thing to do if there was any remaining risk that it would not be so.

What I am really excited to know is how much of a contribution off takes and royalties will make and at what presale level. $100m was touted as the maximum equity raise number, but a large set of off takes could shrink that dramatically.

I drove past Parys mountain yesterday, it looked like there was some different drilling equipment there than the last time I went. Has there been anything said about new drills or was I just not paying attention on the previous visit?

Could barely contain himself at the end.

This is based on using the NPV calculator on the HZM website at https://horizonteminerals.com/uk/en/npv_calculator/

Nickel today approx $20,500 but rising sharply.

Araguaia Stage 1 NPV $1.187Bn , IRR 37.3%, FCF over LOM $3.9Bn

Araguaia Stage 2 (funded by FCF from stage 1) raises those numbers to NPV $1.956Bn, IRR 40.7% , FCF $5.99Bn

Araguaia has a measured and indicated 1,525,000 tons of contained nickel.

The company used to have the Vermelho project NPV calculator on the site, but the Canadian regulator made them take it down until the numbers are based on DFS rather than PFS. At $20.5k/t nickel the FCF of Vermelho is now over $10Bn.

That's $16Bn of FCF between the two projects. After tax, capital payback, forecast production cost they will make $16Bn. That's at today's Nickel price, not the emerging consensus for a 25% higher price.

Fair enough DJ, but a mature HZM is more like a mature EUA than GGP. I agree people don't yet fully understand what this is going to turn into. That's what makes the price today almost laughably low.

This isn't the next GGP. This is a far more valuable company than GGP.

The in the ground value of already defined resources for HZM is approaching $100Bn in a rising nickel market, with a land bank and other assets offering further exploration potential even beyond that. The NPVs of Araguaia and Vermelho are already at around $5Bn, with enormous FCF thrown off. Nickel could also rise a fair bit further, near 50% rise over the last year and could happen again next year.

HZM is a multiple of GGP.

The ECA announcement has a few direct and a few less direct meanings:

1. The debt finance is a done deal

2. The terms of the finance will be better than anyone legitimately expected, with ECAs offering long lifecycle low interest credit for key asset purchases.

3. The remaining bank debt will be announced in the next two weeks

4. The equity piece of the finance package doesn't need to be done at a bargain basement price, or be larger than already announced. In fact it may well be smaller.

5. HZM just stuck a massive takeover target on their back. ECA finance is transferrable. This makes purchasing HZM $150m cheaper for any prospective buyer. Bids will come, and they won't be near today's share price.

6. The Araguaia mine is going to get built. This effectively announces the start of the build process. Araguaia will be producing in just over 2 years. Who owns it by then is a different question.

7. The valuation of HZM should now move to 70-80% of Araguaia NPV rising to 100% at production in an efficient market.

8. The DFS for Vermelho will significantly increase the value of the company. That powder is still dry, but don't think for a moment the company is not also now working hard to execute that mine too.

9. Today's price point is just the beginning of the real rise, not the end of it. This is where the risk averse can really start to buy in, institutional or others. Expect a sustained rise through the build phase.

Time to be excited.

The ECAs have been known about for quite a while. There was a JM presentation a few months ago that named them, if you look back in my posting history you'll find some stuff on them.

EKF are the export credit agency associated with Volvo mine trucks and diggers.

Its an interesting plan. Its aimed at the middle and working class buyers of new cars to incentivise them to choose an EV rather than ICE. The tax credit for used EVs may also help the lower paid, and the Democrat spin on unionised labour only is also a slap to Tesla and other non Detroit manufacturers. Take the union bit out and it could have come from MAGA man himself, its both protectionist and a populist policy.

John, you've just made your own point. If people like yourself believe another delay is likely then they or you won't buy.

Nothing is ever certain in business or the markets, we are all essentially gambling on probabilities. If you think they can't get finance for whatever reason then don't buy.

I on the other hand believe the asset value, the presence of various stakeholders like Glencore, Teck, Orion, Canaccord and others, the lack of technical complexity, the stable jurisdiction, the ESG credentials, the rising demand for Nickel, and the quality of the management team amongst other reasons it is very likely that enough investors will see a highly probable return on their investment (finance rather than equity but both really) that the company will get backing to go ahead.

This is a big hard difficult ask for a very small company, but if you had the money would you lend it to them and believe you would get a return? I would.

Of the four possible remaining q3 weeks left to announce something I think this week is most likely followed by next week as second most probable. I can't see them letting it go to the wire without making a holding announcement, particularly after the RNS a few weeks ago restating Q3 as the timescale.
They have traditionally released most big news items on a Thursday, so maybe this coming Thursday is the most likely day for an announcement.
Or not :)

As to the Tesla thing, I can't see it, HZM will be perceived as too small to deal with direct by Tesla, particularly as A1 is aimed initially at producing ferro nickel for the stainless steel market and there has been no hint of a change in that direction through all the precursor work and announcements. Most likely off taker will be Glencore, who may back to back the deal with a stainless manufacturer in the US or Europe.

Now when we get to Vermelho, that's when things will get funky with the battery markets. The company have stated they wanted to progress Vermelho DFS in 2021, it would be nice to hear about that soon too as post DFS it becomes bankable.

Apologies, I got the tailing story wrong. HZM intend to store the topsoil for rehabilitation, the tailings are able to be sold as a commodity for construction in Brazil, basically an aggregate. So the tailings won't be retained on site.