Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Given that this interview was four months ago just at the start of Horizonte’s problems there was absolutely no panic about the project, all the while recognising the varying difficulties that are coming. The then increase in CAPEX didn’t seem to come as a surprise to him, and he would have had more detail than us, and he casually put it down to a few factors. Doing it for the first time, inflation and financial costs. It’s strange as I almost got a sense that he was excited about getting in there and sorting out a solution. Had he already been tapped up? He also mentioned that the project had value and longevity and was worthwhile. The term snowballing came up with respect to other investments as a characteristic in opportunities they look for. Horizonte has that. They invested here in the first place for a reason. What’s happened here doesn’t phase them one iota, they are here to stay and find a solution.
AIMOHO
Lfontes posted this earlier.
I thought this important enough to note and deserves its own thread.
Cheers Lfontes.
I’m following this chat room for a while and would like to ad something about the Brazilian Law.
One of the main arguments for scaring investors is related to the Co going into adm, bankruptcy.
That option is not so easy to the main shareholders, because according to the Brazilian Law, several licenses, like environmental , local, state, federal, have been given to an entity (Horizonte Minerals), and if that entity ceases to exist or becomes financially unable to conclude the different execution steps on the project, there is a real risk of going back to the planning phase from scratch. Which means that an important part of the asset (licensing, permits, environmental studies presented to obtain those) may become invalid. The thing with South America, and Brazilian Laws in particular, are they are so complex that any move to cease HM as a viable entity may incurs finishing off the multiple licensing processes so far obtained.
What’s the Value
So how do you define the value of the company?
MCAP, NPV, assets or another measure?
It all depends on why you’re asking, as the perceived value will depend upon why you’re asking.
An example would be.
A few stones on a hillside. What’s their value?
Set the stones out in a room. What’s their value?
They happen to be marble slabs. What’s their value?
They have been carved with figures on them. What’s their value now?
They happen to be quite old. What’s the value now?
They are in the British museum. What’s the value now?
If you asked a Greek politician you’d have a different answer than if you ask someone who is trying to feed their family.
A few stones in a room. What’s their value?
The point I’m making is that everyone involved will be looking at this from different perspectives. A person who has no alternative but to live next to the road carrying all the construction traffic, which is making their life hell. The town council desperately trying to get investment and employment into the community. The list goes on up the food chain all with different goals.
Nice!
Did anyone else find it strange that the company doing the review changed?
At some point it’s changed from Reta Engenharia on the 2nd October to G Mining Services yesterday. Obviously La Mancha is dictating the show now and wanted their own trusted partners on board. Was this not key information we should have been aware of?
Only a small matter.
The question I was asking really asking is whether the institutions are in in the buying and/or selling today given that some of the trades today if they had been done back in August/September would have been over £1 million.
Any views on who’s buying or selling?
The share price opened down and went a bit further, but has remained relatively flat since. The volume is also outstripping October’s volume.
Not all the buys can be attributed to the short closing, and there’s a few large buys. Some large sells as well.
Like me, those that didn’t sell in October will most likely sitting on their hands.
Obviously there’ll be a lot of trading gamblers cutting their losses and exiting, but that counts for the sells.
Does anyone see any sign of the intuitions exiting?
It’s a vast gamble, but there does seem to be some appetite from some traders.
The question for me is whether the larger buys are institutional or just a big gambler?
Just interested in people thoughts.
I haven’t got a clue and absolutely know nothing about the internal goings on within the company.
What I will say that in my experience I’m not surprised that the new management team have put in the CTC estimate they have. Although a lot lot higher than I expected. I know that when I was called into helping projects in distress, I was always clinically forensic in identifying all costs and this usually meant estimates on the high end. I always brought in those projects to time and budget. I think that’s what the new management team are doing here. The previous management team, in hindsight, were too optimistic with their estimates.
The new management team have only got one chance with the begging bowl and they need to get it right.
With publishing such a high figure they will have an initial idea of the financial package being put together. With the high figure they must believe they can get it. It all depends on the confidence the new investor(s) and banks have in the new team and their estimates. I had hoped that they would announce this in a few weeks, but if new investors are involved they will have to do a deep dive due diligence which could be a 2-3 months. All outcomes still possible.
So a guess at the financial package.
£200 million equity raise at nominal share price of 20p is 1 billion new shares.
Rest through debt or other.
Total shares at nameplate about 1.4 billion.
New NPV a guess at £700 million.
Or 50p a share.
Pure speculation and wild guess but some rational behind my figures.
LawrenceH
I truly believed in Horizonte and still think it’s a worthwhile project. I’m still invested and have not sold a single share, nor will I, as I don’t want to consolidate the substantial loss I have. In hindsight, a wonderful thing, I would have sold after 3rd August RNS, and waited for a lower entry point. However, I had confidence in management that they were telling us the truth and the share price would not decline too much. From a high then of £1.70 to today 8.5p, I’d call that a shafting, as that value will take a very long time to recover if at all. Why I’m bashing this is the fact the previous management got the estimates to complete wrong. At 70 to 75 percentage completion, you could expect a little overrun, 10-15%, but not what the new management are saying now.
Now that the funds required are known they are back to trying to put a financial package together. If they can then for a new investor this will be a good opportunity once the funding has been agreed. For a really wild guess I’d suggest a fully diluted share price at nameplate production in two years would only be in the region of 40-50 pence.
I’ve been extremely bullish about Horizonte up until now, but there’s no sugar coating this, it’s bad. We have well and truly experienced a good shafting. How on the 3rd August 2023 the RNS stated that all was progress on schedule and to budget with an estimate of 65% complete to get to the 2nd October 2023 RNS and this one today. 87% cost increase with a 2 year delay. Now regressed to 48% complete. How this will be funded in the current market will defy the laws of physics. I have now assign a value of zero to this.
Https://www.theguardian.com/culture/2020/aug/03/solved-is-sarcasm-really-the-lowest-form-of-wit
Make up your mind 😂
This article from a couple of weeks ago does really give an answer, but an interesting take on the subject
https://www.afr.com/world/asia/indonesia-s-poll-frontrunner-doubles-down-on-nickel-boom-20240131-p5f1ek
The reason I ask is that the company needs to repay 2400 oz of gold by 29 June.
We last heard of a gold poor of 379 oz back in October, I’m worried that we’ve not heard anything about what production is like and if it is on schedule to cover the loan requirements.