Member Info for pickedpeck

Interesting article. All those factories , and a mention nickel as the critical supply chain bottleneck.

https://sifted.eu/articles/musk-tesla-rivals-europe-1/

I have an 11p sell order for 1m in, I think I am going to take it off as it's possible next news will bump us well past that. I want to start top slicing a bit higher.

'Our project financing journey for the Araguaia Nickel Project is gaining momentum.'

They are still saying commence construction Q1 21, that means finance agreed and in place, FEED stage complete, construction equipment purchased and on site, workforce recruited etc etc.

The wording of the tweet hints at more going on than we are seeing, and you can't help but think the finance news needs to be complete in the next month. That means that its likely one of the next 20 or so trading days will see an RNS that makes this go to the next stage.

The drop back this week could be driven by a bunch of things. Profit taking following sharp rises is the easiest explanation, but the trade data doesn't seem to support this with relatively low volumes the last few days compared to the way up. It could be about equity financing as some have suggested but I see that as unlikely, the MMs won't have inside knowledge of the equity finance negotiations. On the other hand it could be MMs trying to build stock for the next leap that we all know is coming, just a question of when. If I was a MM for this I'd want to get some cheap stock in hand not be caught with empty pockets when the next round of news comes up.

The fundamentals of the business, meaning the NPV of the current first project and the probability of a takeout, still have not changed and still justify a multiple of the current share price. Post finance sp baselline should be i.r.o. 15p IMO and even then prompt inbound offers for the company as the price will still be at a large discount to value.

3m is the same as the exercised options from yesterday. Likely an employee needed the cash so cashed in.
Added some more, think I've passed DJ now.

This set of results will be very interesting, the last set were (as previously posted) pretty spectacular but didn't lead to the leap in share price they should have.
The decision to do a buy back which is restricting the liquidity even further may be behind that. It would be nice if the company would come out and make its stock market strategy clear. The risk is that they choose to delist at a price not advantageous to the minority shareholders. It would be god if they made clear their intentions, whether to stay on the market for x years or what.
Still, decent rise over the last few months, hard to believe my April posts are still on the first page of the chat boards.

Why would anyone be interested in a mountain made of copper a few miles from a deep water port?

Just added a couple of hundred thousand. Have a large pending trade elsewhere, might move some more in when that clears.

Thinking of buying some more... Might mean I pass you though DJ! I've noticed that the spread is being kept pretty wide though.

Its one person, 3m shares. I have nearly three times that number myself. Not exactly earth shattering news that an employee exercises an option.
I do agree that any move will mean the number of PIs that are sitting on a healthy profit will be tempted to take it. The rise over the last couple of weeks has been steep and there are bound to be people considering de-risking.

The trouble with that approach is that there will be second surge as finance is completed. I can imagine several triggers, already hinted at, that could see a 30% plus rise. Equity conclusion. ECA deal for equipment costs lowering capex. Inbound Vermelho interest.

wasa - Teck and Glencore have had a few partnerships and JVs, interestingly with BHP in the mix too.

https://www.reuters.com/article/chile-copper/collahuasi-and-teck-resources-agree-to-chile-mining-partnership-idUSL2N1870RR
https://www.mining.com/operations-resume-at-antamina-mine/

Would a Teck Glencore JV be the answer here? That would be a result I wouldn't favour much.

If the equity dilution is announced and is as low as we've discussed I think it may precipitate a bid at that point. If for example Orion put up $100m for 500m shares... that would mean anyone buying later would have to offer significantly more than 20c a share in order to dislodge a 25% holder so they would have to bid ahead of that deal closing. Teck on the other hand would crash through the 30% holding limit and likely have to bid at that point... and I can't seen Glencore coming this far and just sitting on the sidelines watching it all happen.
Just the equity finalization and the finance deal completing will also move the share price up a fair way... 15-20p post finance close I suspect.
Getting to a very interesting phase, build still planned to start Q1 2021 so finance will be agreed over the next month to six weeks.

marco - I would be quite happy with it too, but not holding my breath just yet. My daughter has 200,000 shares in her CTF, if it went for £1 I wonder what she would do with £200k on her 18th birthday :)

Seriously, value is not the driver of a transaction fee, its much more what the sellers will take for their shares. There isn't a single very large holder that would defend us easily against a takeover, it is more a question of what Teck or Glencore would take, possibly from the other. I can see a prospective bid emerging sooner rather than later, at a decent premium to the current price and to what Teck / Glencore paid, but that initial bid will be below what a lot of PIs would regard as fair value. That doesn't mean it will be successful, and in an ideal world may cause a bit of an auction situation to emerge.

An auction may be the quickest way to get past 30p...

The historic drilling campaign at SdT and Pau Preto was huge, over a thousand holes drilled. I can't help but feel this is the third potential development leg once things get really moving in the Nickel market but definitely adds value as a 'hidden' asset.

'SdT comprises the Serra da Tapa and Pau Preto licences –two of the three that make up GAP. It is located some 65kilometres northeast of Xinguara, in Parà State, Brazil. Between 2004 and 2007 a drilling programme was carried out at SdT, with a total of 952holes were completed for 48,845 metres at Serra do Tapa and 185 holes for 5,068 metres at Pau Preto. No drilling has been undertaken since at SdT. The SdT licences cover a total of 14,014ha, topography is mildly undulating. The geological setting is similar to that at Araguaia, comprising lateritic mineralisation with supergene concentration of nickel.'

Someone asked was there potential for HZM to increase the resource and reserves through more drilling. I'd say they already have but we haven't talked about it. The PFS and FS for Araguaia and Vermelho cover those two resources, but also cover the other Ni areas that HZM own...

Araguaia : 27.29 Mt
PQNW, Lontra, Oito, Raimundo : 19.72 Mt
Pau Preto : 13.63 Mt
Serra do Tapo : 56.9 Mt
Vermelho : 170.6 Mt

Maybe not ships, but could be more relevant to a few on here soon... https://electricyacht.com/

$325 debt of $443 needed for araguaia phase 1 is 73%, at the last statement HZM also had £17m cash at hand, say $23m.
That $23m could be two years of operating xpenses ex mine cost but so far they haven't spent at that rate. I guess at least $15m would be available towards the mine build leaving something like $100m left to raise.
Local bank debt, ECA funding and off takes could potentially cover a lot of that, but even if they only do half then $50m equity at 10p a share would not add 500m shares, 10c would! At 10p I make it about 375m more shares, just over 1.8Bn.

Worst case I see from here with no more debt and no off takes is 750m more shares 2.2Bn total.

Wasa - inbound interest from Tesla as an announcement might be quite nice. I do wonder whether the increased focus and news stream on sustainability and green projects (plant tweet) might be part of courting a large American suitor. The export credit agency involvement may be related to this, the fact there are two involved makes the US EXIM likely one of them.
I think Vermelho may be a gfame changer sooner than we currently believe!

The next trading day is in September, this month will be the make or break for KEFI I feel. The funding for TK needs to be outlined and RNS released this coming month or all credibility will be shot. I am less excited now about hawiah , I think it is further away and a real PFS will be costly and take time assuming the PEA is positive. Saudi will all depend on appetites for investment in non-oil in Saudi, but someone will need to thrown money at it at a level way above TK to get it going. Even establishing export routes for the Copper will be non-trivial.

All to play for...

100,000 vehicles from Rivian, 1,800 from Mercedes for Amazon. Let's say 40Kg of Ni per vehicle, that's 4,072 tons of Nickel ordered by Amazon.

Soundbuy... Did you read either the Araguaia PFS or vermelho FS? Both have a sensitivity analysis in them to allow for exactly that.
Doing a revision of the full report might not be that worthwhile - the project economics are compelling even without the earlier than expected Ni price move and shift of the Real. $3-5Bn NPV range is close enough for something that costs £100m. That NPV is a multiple of the current NPV attributed to EUA for example.

So HZM mkt cap is currently 2.5% of the mid range NPV of its two projects. If it ten bagged from here that would still only be 25% of NPV , comparable percentage to say KEFI, and still way lower price/EV ratio than something like EUA or GGP.

I'm not being negative in any way about those companies, what I am saying is that HZM has a lot of room upwards before fair value is reached.