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I’m thinking that as the $51m owed to creditors is part of the cost to complete that it may be sensible to do a raise to clear it.
Could massively help with confidence that we are not endebted and help things along with support for the rest from the banks.
What do people think ?
Would this be a sensible thing to do ?
Think what you will find Tricky is that Indonesia and China had a shot over their bows last week or two and woke up to the fact that they don’t hold all the cards when various western market participants increased their cries for split pricing.”Dirty and clean”-guess who would win that battle going forwards into net zero.
Ultimately at 16 k 50% of mines worldwide not profitable.
Either way 16k will be a sure floor over time.
I think that they will likely tick it along somewhere around where it is now to avoid a western “OPEC” in the nickel market.
All this is excellent for pricing on both Araguaia and Vermelho
Just for the record,what I put in here I can afford to lose.
It will hurt but I can afford it.
Now one of the most unpleasant experiences of my life apart from the collapse of the split capital debacle and getting locked in to the market crash with IG index in 2007.
What a life !
We have all had our rollercoasters and this has always been and still is another one.
I agree Bhudda-bottom could be in until they announce 1p placing.
There must be something positive they can tell the market.
New corporate investors just have to be interested at these levels-it’s a steal for them literally
These prices now are getting super good for Araguaia and it’s cheap opex and FX.
Remember those cheap electricity costs $0.03/kwh and by Jan 2016 coal may be touching $70 again.
Our Mr Crew will be doing all this stuff and presenting I’m sure.
It really is a very very good investment once these hurdles are navigated
Correct me if I’m wrong but I wouldn’t have thought that the banks would want HZM to go into administration if it can be avoided at this point in time ?
Surely it would mean yet more delays and trouble and strife for them ?
I’m thinking that the waivers have only been deferred till the end of the month as HZM now have the condition of a fundraising placed on them probably to the level of a certain amount in order to continue the waivers until the main funding package is agreed.
Pub-I have learnt a few lessons and am happy to admit that as I have not had a lot of experience of these kinds of scenarios before.
I consider myself a much better stock picker than I used to be but do still sadly have stuff to learn about savagery in the markets.
i agree with you rob re the banks.
i think that they will definitely need to see the cash balance propped up significantly.
generally though what do people think that the banks will be thinking now ?
it’s quite obviously a **** situation for everyone but at the end of the day the banks probably would like the project to go ahead in the smoothest way possible now are my thoughts.
one can play the blame game forever but that is literally just navel gazing and doesn’t get anyone anywhere.
i think if i was them then firstly i would want to see supporting capital in the tank,then i would want to see a measured,fully researched and costed plan of how to take things forward from here.
i assume that we are only going to get so much grace re payments as a deal is a deal but on the flip side you can’t afford really to bankrupt the hand that feeds.
if i was them as they are not stupid people and will be able to see the assets supporting their loans it would be all about the management team that was going to bring my money in.
the good news is that we know (and they will know) that we have a great management team and costed plan here.
i think that once they have got over feeling really annoyed and playing it to the edge from both sides to get the best deal possible all round,then the green light should be given.
clearly they have great projects and prospects there,particularly if power costs are still so low from the hydro in pará state.
it surely is a no brainier to take it to the wire and then as long as all the boxes are ticked,let it progress rather than lose even more money hand over fist with administration and significant further delays for no good reason or haircut on a sale of assets
Check it out
Really really good news :-)
Stuff like this would have reassured investors re opex and weirdly they just don’t give us a scrap of good stuff !
https://centaurusmetals.com.br/pdf/d77b82ad-7fea-47f1-bb88-9afa896b9777/Jaguar-Feasibility-Study-to-Focus-on-Concentrate-Project.pdf
before all this ****e kicked off hzm was trading at 0.4 pnav for a1 only at the nickel price at the time or around £430 m
mc.
now that would equate to approximately £325 m and in production the average of producing peers was to be trading at between 0.8 and 1.2 pnav which would be between £650 m and £975 m.
so let’s say our resulting mc post funding solution was £160 m,that would mean just based on a1 alone we could expect somewhere between 4 and 6 times this mc when in production after ramp up or between 4 and 6 times the resulting share price.
add in the same for a2 and 12 years extra mine life and you are looking at between 8 and 12 times resulting share price.
point is that this is still a potential 10 bagger just based on the araguaia asset alone with no value at all for vermelho which is a much bigger project.
still very very investable if we don’t go bust.
i’m very relieved to discover those current low power costs re opex btw.
making everything even more attractive with inc nickel price and fxadvantages from bfs.
Lfontes-interesting project.
Also good to have the low power costs from the 230kv grid in Pará state re-stated at this point in their latest RNS re their ongoing feasibility study as $0.03 per kwh.
Very reassuring re HZMs current power costs (in fact the same as in Araguaia BFs for LOM) and throws out all those concerns about massively increased power costs vs our original BFS-they are not :-)
These two reasons are why I think that anything around 3p is still a bargain as it kind of represents an equivalent open trading price post funding.
Personally also think that that 3p would still represent just Araguaia and not Vermelho.
There is no value in that 3p for Vermelho at all and by rights post positive bfs we should still add in a value for it.
The floor in price for the Nickel market seems to now be becoming clearer to all market participants so the pfs price assumption there seems pretty solid at 16.8K for LOM.
A couple of things.
Do we all agree that LM and Orion will do their utmost to avoid an administration scenario ?
From all the evidence I can see I think that they will,otherwise they literally do lose everything monetarily and also their valuable and trusted reputation.
(If they take it private,all it shows is 100% that they can afford to keep it listed and fund it also which is not the funds MO and also will hugely and likely irretrievably damage their trusted reputation amongst current and future investors).
Also,I think that whatever price they place the new shares at,even at worst case scenario of 1p which imv would be frankly ridiculous,on trading in the market,as I see it unlikely that current shareholders would be able to participate,they are likely to trade at 2-3 times this value.
So at 1p placing they are likely to open in the market at 3p before one is able to buy any for less.
As yet I don’t think there is an example of the La Mancha fund screwing over any of the companies that it is invested in and after listening to Karim discussing HZM and also telling the interviewer when asked about current plans for deployment of capital that L.A. Mancha currently see one of the best opportunities in continuing to deploy capital into supporting and developing their current companies,I am reassured.
I fully believe that they are not trying to screw anyone over and are doing their best under very difficult circumstances.
Karim said “it is difficult” and I believe him.
They have preserved capital extremely well from the last raise and are pressing on trying to resolve this situation to the best of their ability.
I think they will lose big time in admin and they thus far do not own mines.
We have all set our stall so best let the professionals get on with it
Rover,in all reality what you say is true but it can easily be done if they so want with an EGM and shareholder vote.
They are a majority and can carry it.
My biggest question is why all the smoke and mirrors.
What exactly does “a positive outcome” mean ?
Does it mean not going into administration or something else ?
What is Karims definition of a positive outcome at this point,that is the thing.
The facts are we 100% know that they can save it from administration if they all have to with pure cash as we know for a fact that between these 3 cornerstones that they have that cash-it is public knowledge and on their books.
Question is,will they ?
If they don’t and totally screwed over the other 49% of shareholders and took the lot private for themselves then serious questions would have to be asked.
I don’t think that that is La Manchas style and it could in fact destroy all confidence in their business and business model.As I said before,who would trust them in the future.
If they bowed out and along with Orion sold the whole lot to Glencore at a fair price taking into account the known massive value of the assets and including all other current shareholders in the deal then fair enough.
But you just don’t steal assets from other investors and expect your much valued reputation to stay the same.
The RNS was a corporate update and under new rules in fact this year corporate releases have to contain a lot more information explaining risks and also what is going on to investors for visibility and clarity.
That I think is why it sounds harsh but they are bare facts about what is going on I suppose.
Why would any listed company then trust La Mancha again if this happened.
It is in full view of the whole market and apparently their reputation is really important to them.
If we have a 7 p raise ultimately that then trades at 20+ which would be quite possible in that scenario as chopper suggested on advfn (as he declared that he previously had had some involvement with financing discussions some time back) then I would accept this and think honourable and honest intentions.
Anything less and I think questions should be asked
The RNS talks about existing shareholders and the outcome for them not necessarily being positive and the implication I think almost certainly is there that the new investors coming in are going to get a much better deal-don’t we know it !
By the time that they do the next raise which we know is coming,the 3 month weighted average is going to be around 6-7 p.
It will be interesting to see what happens.
I think that the value is very evident for everyone to see and it is going to feel like something underhand is going on if they take the Michael as we know the value is huge and we know that we have a very talented financial team at the helm here.Despite challenging market conditions this should not in my view reasonably result in a total wipeout for existing shareholders with equity at 1p.
I just think that that would be completely unreasonable and probably smell a rat like shislls suggests.
They should fight for our interests and our sub-committee should be making sure that we are offered some protection