Member Info for pickedpeck

Raise funds no - they have about £17m cash at hand left over from the Orion deal last year. There will likely be some equity dilution to complete the $440m finance package to build Araguaia, $325m debt position already announced. Likely that ECAs will help with equipment purchases reducing the raise required, and also Brazillian banks are likely to contribute on top of the $325m so the final equity could be anywhere from $100m down to nothing. The final piece may be additional offtake agreements like the Orion one.
Take out is possible at any point as there are no massive holders to defend against it. Teck are best positioned to do it and have a board member already, I think that indicates they are already thinking about it. A suspicious mind would suggest they are waiting for the full finance package to be in place as it de risks the project from their point of view. Once third party funding is in place they don't have to commit their own cash to developing the mine(s), depending on what they would have to pay for the balance of the shares at that point. Right now a number in the teens would likely secure it. Next year it would have to begin with a 2, maybe even a 3.

Tintin - it means people are closing their spread bet positions so Spreadex can close out their hedges. Some of that will be profit taking as numbers of people will have bought in and made over 100% already, and in terms of spread bets probably made a lot more.

I appreciate there are longer term holders that held on through the lows earlier in the year and are waiting for the next step, and also people buying in more recently looking for growth post finance. Everyone's investment hypothesis is different.

For me pending what happens next I've taken my profits out as I have what I believe is a better opportunity elsewhere. If there is an RNS confirming funding it may well turn out to be a bad decision but I am content with that and have no FOMO issues.

Simms, Spreadex is buying and selling as its customer spread bet positions move. It doesn't hold as an institution. They buy to minimize risk against their customer bets. If they take a large spread bet on a low volume / kmt cap stock they will buy to hedge their position. When the bet is released / fulfilled they reduce their hedge. The nature of their purchase depends on the nature of the spread bet placed.
I sold out of this yesterday in favour of opportunities elsewhere. Good luck all, I am sure I will be pig sick when the finance RNS lands.

7p is just the share price, the mkt cap is just over 100m.

The first material lines of the Horizonte Investor presentation are:
- Two Tier 1 nickel projects, both 100% owned.
- Araguaia FS: Stage 2 (expansion case) has an estimated IRR of 30.7% & NPV of $1.2B.
- Vermelho PFS: has an estimated IRR of 26.3% & NPV of $1.7B (both projects at $16,400/t Nickel)

NPV of both projects at $16,400 Ni is $2.9Bn against a mkt cap of about $130m. We are trading at 1/22nd of the current NPVs of the companies two projects even if Nickel only moderately increases from today's price. The price could more than double and we would still be 1/10th of the NPVs.

I was thinning conventional hybrid as well as PHEV, I think its about 1:1 PHEV : BEV , still doubles the battery market more or less.

Doh.. forgot the hybrids. That 3m is pure EVs, the number of hybrids is rapidly expanding too. Hybrids also have batteries, just generally smaller ones although pretty much every manufacturer is expanding the battery sizes to increase range. There are currently about twice as many hybrids being sold as pure EVs.

Sorry to confess I didn't know the latest EV numbers forecast for 2021. Predictions seem to be getting constantly revised upwards, at the start if 2020 the forecast was 1.5m, now it is over 3m. Tesla alone will produce 500,000 in 2020 and expand rapidly with new factories in 2021.

3,000,000 x 40kg Ni = 120,000 tons of Class 1 Nickel just for cars, forgetting all other battery and industrial uses. That's new demand for your supply and demand view.

Bottom line is the Ni demand spike is happening now, we are at the curve in the hockey stick.

Oh and Tesla... The batteries in Tesla vehicles are currently 8:1:1 Ni:Mn:Co , ie 80% Nickel. Each Tesla car battery contains approximately 40Kg of Nickel. 25 cars needs 1 tonne. Its a reasonable metric for the other manufacturers too, but trucks and busses multiply that value.

Nope. Best to understand the assets and market you're invested in... so in the interests of sharing knowledge:

Nickel is two separate markets, ferro nickel used in stainless steel and nickel sulphates that are suitable for use in batteries, particularly EVs. The battery grade nickel already commands a $2k premium to ferro nickel, and as the battery grade is rarer than ferro nickel the price of that will separate quickly as demand spikes. That's why EV manufacturers and battery companies the world over are moving to try and secure supplies of nickel sulphates before the supply becomes truly squeezed, although there are signs that is happening right now.
Araguaia is a ferro nickel project, but Vermelho could supply the sulphates demand via converting laterites via the HPAL process.
HZM's idea is that ferro nickel supply will become squeezed too as more nickel gets diverted to EVs, which could be why over the last three months the price of nickel on LME has risen over $2000. We could easily see $17k LME nickel by year end, and Class 1 nickel spiking over $20k/t.
By the way, the price for nickel sulphates is not the same as the price for Nickel metal. Sulphates have around 1/5 Ni content.
Have a look here https://www.metalbulletin.com/Article/3945692/China-nickel-sulfate-rises-for-third-consecutive-week-but-is-it-sustainable.html

Of course, your research could contradict this, no one really knows how much sulphate production can be quickly brought online to meet the EV demand spike, but consensus seems to be that Class 1 Ni is going to be in utterly constrained supply imminently.

With two trading days to go until the LTH september the 15th price bet finale what's the chance of an RNS coming along and ruining my currently excellent chance of being right (6.90). Was it mid price or bid price wasa?

In seriousness, 13 trading days left in September, I think on one of those 13 we will get a pretty serious RNS on completion of finance. If we don't they will almost certainly have to announce that the planned dates for Q1 2021 are under threat. The cancellation of the Crux interview could be a pretty big clue, but it could be nothing. The fact JM has not even mentioned the words Tesla and Vermelho in the same sentence recently enough for anyone to remember may also be a clue. Again could be nothing, but having said that he would have to have been hiding on the dark side of the moon not to have noticed the huge battery nickel asset he is sitting on is of fundamental interest to one of the (currently) most valuable companies on earth. Sometimes its not what's said, but what's not said that gives the game away.

So any chance of running an accumulator bet? Combination of price before finance/offer/Tesla deal/all of above RNS and price after, accumulator only valid until October 1st.

I'm sticking with 6.90 for Tuesday. I'm tempted to go a fair bit higher for October 1st, the problem is how much higher? Don't want to seem like too much of a ramper, so I'm going 13.90 bid at close on the 1st of October. Sure it might not happen, but it definitely could...

Covid19 is so last year.

So why isn't HZM valued higher? Most of the researched posters on here know the NPVs and additional upsides, and the huge discount we are trading at to it.

Multi-choice questions...

1. There is still a deniable plausibility for the need for extra Nickel.
a. EVs will come slower than expected due to infrastructure bottlenecks
b. Battery manufacturers will come up with an alternative chemistry for EV batteries, maybe based on Graphene
c. We are still in the early adopter stage, when we get to early majority then the markets will react to the shortfall like lemmings.
d. None of the above

2. We might not complete finance
a. The equity deal is not done yet because there are no takers
b. The mkt cap is too low to make it happen sensibly
c. Existing share holders are holding the door closed to new entrants and want a better deal for them
d. None of the above

3. Brazil is an unstable economy
a. Bolsonaro is a polarising force, he cause a left wing reaction
b. Covid19 still has legs in Brazil
c. Trump may invade Brazil confusing it with Venezuela
d. None of the above

4. Wasarunner is secretly Jeremy Martin and is having us all on
a. He can't be because I am.
b. No its DJRyan, the pub is just a front.
c. Could be the Moneysponge
d. None of the above

5. Its the end of the world so none of this matters, in two years we will all be...
a. Dead due to Covid20.
b. Underwater due to climate change.
c. Bombed by a confused Donald
d. None of the above.

If you answered (d) to all the questions above, hold your shares. Any other answers, see the teacher.

You should watch the film Idiocracy.

Intelligent financially secure people are reproducing less, others are reproducing more. Eventually this leads to a democratic swing where a moronic TV star is elected president as he appeals to baseball cap wearing buffoons with a vocabulary of 20 words, and serious politics dies out. The food supply then goes down the tubes as the president tries to feed crops with a sports drink to make them grow faster (bleach a virus out of humans using domestic cleaner). Anyone confuse the film synopsis with real life?

Personally I have a baseball cap and four kids...

Southwesterner - The proximity to a port does have an impact these days, its naive in the extreme to say it doesn't.

Almost every new project for mineral extraction comes with a sustainability report, particularly in relation to materials that are related to investment in renewable energy. Long road inks may be economically viable, but putting trucks on the road hauling bulk material is not as easy as it once was particularly in Western Europe. If the mine was in the middle of Snowdonia it would never reopen (imagine trying to reopen Sygun for example).

As an example only I've got an investment in Horizonte Minerals who are looking to get funding for a nickel mine in Brazil. As they court investors they have seen it as a priority to emphasize the sustainability of their project even though it is in an existing mining district. Have a look at what they produced here: https://horizonteminerals.com/news/en_20200817-sustainability-report.pdf . If you can't get investment in a Brazilian mining distract without proving your sustainability credentials then what chance have you got in 'tourist central' Ynys Mon?

The World Bank and IFC are pushing banks considering lending to minerals extraction companies to require compliance with sustainability standards, that applies globally not just in exotic locations. Have a read of this https://www.worldbank.org/en/news/press-release/2020/05/11/mineral-production-to-soar-as-demand-for-clean-energy-increases
The key line for AYM in that article is : 'It also notes that even if we scale up recycling rates for minerals like copper and aluminum by 100%, recycling and reuse would still not be enough to meet the demand for renewable energy technologies and energy storage.'

Parys mountain being a few miles from Holyhead where there is a recent history of bulk materials handling is important, as is the link to the spur on the Holyhead to London line. The jetty is open and able to handle materials: http://www.orthios.com/orthios-jetty-holyhead/2020-commercial-other-vessels-equipment-charges

A sustainability assessment for copper ore extraction and beneficiation and transport to Holyhead by road would be unlikely to have any massive red flags. No new infrastructure needs, bulk handling nearby, plenty of renewabale energy generation on/near Anglesey etc etc.

That makes the Copper ore in Parys more valuable than it would otherwise be.

I appreciate there is a lot of water to flow under the Menai Bridge before any of this really matters, but at £3m mkt cap someone a bit bigger may look at the report the Irish chaps produce and think they may be able to make something of this. Its pocket change to a Rio Tinto or BHP, but there are a lot of smaller players looking for easy to develop assets.

Bungle - Even the first Tesla's should be covered by a warranty until 2023.

The Battery and Drive Unit are covered for a period of:
Model S and Model X – 8 years (with the exception of the original 60 kWh battery manufactured before 2015, which is covered for a period of 8 years or 125,000 miles, whichever comes first).
https://www.tesla.com/support/vehicle-warranty

Still - bodes well as Tesla will be the ones needing more Nickel for those replacement batteries. Plenty of Model S on eBay...

I am a bit surprised at the muted reaction to this. IFC involvement is potentially massive.

Have a look at this older project and see if you can spot any similarities to the current state of HZM...

https://ifcextapps.ifc.org/ifcext/pressroom/ifcpressroom.nsf/0/C9E8A005F7F33293852569770059D326

The diagram at the bottom of that last link says ‘De-risking investments for low carbon minerals’ and ‘Leverage Carbon Finance instruments’

World bank as a loan guarantor ? Think that may be behind the increased debt position, it would effectively be zero risk.

https://www.worldbank.org/en/topic/extractiveindustries/brief/climate-smart-mining-minerals-for-climate-action

By the way, IFC have a history of investing in Brazil, and in sustainable projects, and in Nickel mines. They also highlight Nickel as a key ingredient of a sustainable future energy system.

Their logo suddenly appearing in a HZM tweet is new news, I don’t think I have seen them in connection with HZM before.

This twitter campaign the company is pursuing is quite entertaining. Have a look at the latest slide, and the logos at the bottom. Anyone else heard mention of the world bank / IFC previously? What about the other agencies listed, surely they couldn’t put the logos up without permission and / or engagement?
https://twitter.com/horizonteplc/status/1302862804978933764?s=21