Member Info for PopeUrbanII

If a transaction is done at the asset level for one or both of the projects, whether a sale or a JV the current share price would be irrelevant to the pricing of that transaction and would have a knock-on impact on the share price which could then be a reference point to an equity transaction to fund the other.
For example a JV on Vermelho could provide the cash to fund HZM's share of capex but would also demonstrate what the value of that asset is, the stock market currently has no reference. One would expect the shareprice to increase to recognise the value shown by that transaction (plus the existing value it attributes for A). Funding for A could be raised at that new price.
There are loads of ways this could be cut but just funding based on the current pricing would be ridiculous - it would be better for everyone to just announce that the board is seeking offers for the company

Well yes, he wants a high price same as anyone else!

A failed capital raise as a result of a shareholder revolt pretty much never has a good impact on a company's share price. If the market didn't like the raise the price wouldn't have risen since the announcement. The funds are needed to support continued growth (even if it's a matter of providing an option for flexibility in negotiations with much bigger companies and not actually spent)

I only bought in after the presentation last week (had tuned in to listen to HZM but found this very attractive) so don't have a vote on this one but would definitely support if I did

But how is it wrong?
It does look like a good point on the deferred interest? Overall the total interest cost this year should be less than last year due to the disposals over the course of last year which aren't factored into the analysis but notwithstanding that it seems to raise some valid questions.

I'm really struggling to see what is wrong with gewillia's analysis. LTV covenants likely to become an issue soon as well

The date of the publication was 10 March and there were RNSs on the matter in March

I liked that presentation as well. Will be spending a bit of time looking at it over the weekend

Do people really think he announced a delay? I always thought the debt was hoped for H1 and the remainder would come later this year so I wasn’t expecting the full package to be until later this year anyway and in reality until you have it all you have nothing so I think this is slightly academic

Where I was a bit more concerned was he seemed to be managing expectations on the pricing the equity would be done at - maybe me reading too much between the lines

The idea that any of those institutions are going to participate in something off market that is such a flagrant breach of the takeover code is laughable

I agree with this. On some boards there seem to be some people operating under the misapprehension that investors can set a target they want to get to and only have to report when they get to where they want to be - that is simply not true. As you say the reports have to be made when thresholds are reached - JPM aren’t going to get this wrong

Whilst news may be on the way, the idea that some people seem to have that significant chunks of stock are changing hands because people ‘know’ what is going on regarding financing seems slightly odd. Those institutions are bound by the same insider trading rules as everyone else. There’s also a very good chance that they are subject to standstill arrangements within the NDAs they have signed as part of the process (although the HZM could waive those). Maybe different parts of Some organisations are able to operate in Chinese boxes and separate themselves out from the divisions looking at funding - but the whole point of the Chinese box would be to ensure they have no inside info. Whilst there might be a bit of extra profit to be made by Breaking the rules or sailing close to the wind (and everyone is always suspicious of AIM) the nature and scale of the institutions here means they aren’t going to risk breaking rules for what, relative to their scale would be a fairly small extra profit.

On the plus side JPM had whatever reason they had for selling which may or may not be bad, the reality would appear that someone else was willing to pick those up in a block trade which is 1) a great sign of confidence from that party and 2) excellent news that JPM didn’t spend months flooding the market

Yes any debt sitting in the project is paid for by both sides so isn’t something a partner actually brings to the table (although they may be useful in helping to deliver it).

My view is it’s a very attractive asset, with lots of different options for funding, lots of potential partners (if that route is taken) and lots of types of partners. Therefore at this stage it’s not really worth guessing from the outside what it’s going to look like. It will be a question of what management and the board think is right at the time and I can’t see any reason not to trust that they will do something sensible

There are lots of ways this can be structured. A lot will depend on what the value is relative to the capex and what the target ownerships are.

For A very simple example if the parties agree the asset is worth 100 and the capex requirement is 100 it would be very simple to structure a 50/50 jv in which HZM contributes the project of the mine and the other party contributes the capex, both would have put in 100 of value and would therefore take 50% each.

In reality the two numbers won’t be the same, if the capex is less than the agreed value and 50/50 ownership were targeted then the partner would need to pay HZM the difference. Debt and other things will complicate it - these examples are really very simple but hopefully give a framework to think around

The key to think about is what are the relative contributions of each party and what structure are they aiming for

Are you on the right board?!

Oldtownhat- were you expecting this PFS to say it’s so good there’s no capital cost?!

EBITDA isn't exactly a relevant metric for a miner at Horizonte's stage of life

Or it might not actually be delayed - the only guidance in the last few weeks has been by the end of the quarter. Previously they suggested it might be earlier in H2 but there is a bit of a history of over optimism on some timetable matters - I'm not sure there's much to worry about or merit in overthinking things

Why don’t you think we’ll get it?

https://www.theafricareport.com/15263/us-china-trade-war-opens-a-market-for-african-rare-earth-suppliers/

He served in the Clinton White House in his late 20s so I wouldn’t get over-excited