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Lawrence-I think that we have to remain sanguine now that existing shareholders are going to undergo significant dilution.
Obviously this was always a given from the word go,but the question is how bad is it going to be and that might well come down to how much any new investors are likely to want to pay.
On re-reading the RNS several times,this certainly does not feel like an administration scenario or a pre-pack as someone else suggested.
Imagine if LM and Orion went down the pre-pack and take it private route.they then own the mines and their whole business model and MO disappears in one fell swoop.
They would not be trusted by any listed company again and it would seriously concern their other investors.
It reads to me-guys we are trying but you are going to get diluted so expect it.
Like the Shakespeare
Unlikely to be placing to PIs imv but could be wrong.
It could all turn pretty quick if a few key things happen.
The senior debt needs to be re-negotiated and I’m hoping that that is why we have a new date only 4 weeks away re the waivers.
Could actually make sense.
Still much more sensible for everyone to work together here rather than scrap everything.
Glencore also lose their “in” on Vermelho and the potential offtake there if they don’t help this all along and I think that it’s pretty clear to most that they are swopping out Koniambo for Horizontes assets
Https://www.argusmedia.com/en/news-and-insights/latest-market-news/2543742-nickel-market-surplus-just-36-000t-this-year-macquarie
Mark Selby also refers to the re-stocking scenario as a strong possibility
What makes you think that ?
They have to announce that stuff for corporate governance if there is any perceived risk.That way no law suits if it all goes belly up.
No hint of underhand-they have just admirably preserved the company’s last cash injection.
Was expecting another raise today so in my mind they just gave us all another 4 weeks grace with waivers and 6 with cash preservation
The macro is established yes and also establish is that foward looking at $15,000 per tonne 75% of the world’s nickel mines are unprofitable so it doesn’t matter how much nickel Indonesia pushes out,it becomes a self fulfilling prophecy that they also become unprofitable and then the world has no nickel production-lol
The consensus is long term Nickel price at around 18k (30% of mines unprofitable) and probably hover somewhere between this and 16k in between.
Grades and ore reserves will be depleted as time goes on and I now fully believe that tarrifs for “dirty nickel” are going to become a reality partly through protectionism and partly because the West sees it as unacceptable that Indonesia claims that it wants to keep the cost of EV batteries low as an excuse for monopolising the market via the Chinese,polluting the atmosphere and destroying the rain forests.
I think that it will all come home to roost as unacceptable.
And it all depends what Karim means by “a positive outcome for current shareholders and note holders”.
Surely it all depends on when you bought your shares.
The convertibles were at a seriously much higher price,right.
I dont think for one minute if a raise was completed at 2p Rob that you would stand a chance to get in at 2p.
It will seriously gap up on open and my guess would be somewhere in the 5p to 6 p area just for starters.
Remember that you would literally be getting the $2.5B NPV Vermelho project in the price FOR NOTHING and that is why in my view that there is very little downside from here.
The only serious serious risk is administration still and there has been no real indication or even hints that that is in fact likely from any of the RNSs since the new management took over.
I just don’t think LM and Orion will let that happen and lose everything.
I think that it has been mentioned before that if they do a raise at price A which seals the deal for continuation of the project then by very nature of the fact that the deal has been secured then it will probably trade at 3 x A thereafter.
Let’s say £50 m at 2p that would mean us having a MC of £60 m with 2.77 B shares in issue.
The long term NPV here is in my mind without doubt in excess of $1 B to be conservative without the extra 12 years with just sustaining capex at 16k Nickel price.
That is 16.5 times the resulting MC even after a 2p raise and over 8 times with a $ 100 m raise at 2 p.
PLUS you have Vermelho which I don’t think we should all forget about thrown in literally for nothing with enough capital in there to complete its BFS
I honestly wouldn’t expect guarantees and I think they have to put these things in there .
Clearly referring to likely dilution but it does still seem to indicate that a deal will be done and that the project will go into production to me.
Dilution yes,we are all used to that idea but at what price ?
Well,they have done really well at preserving the cash.
Also funding still targeted for Q2 but end of Q2.
Don’t know if this is slippage but is significant that they still think it could be achieved despite the amount within 4 months.
Things are obviously tough at the negotiating desks and lenders showing a lot of flexibility which is also good.
So the battle continues
Completion of construction activities at Araguaia will be subject to successful completion of a full financing solution in 2024. There can be no certainty at this stage that the full financing solution will be achieved and further updates will be provided in due course.
We have the whole of the rest of this year as wriggle room here.
5 banks at 25m each,3 cornerstones at 40m each,2 new investors at 25 m each,add back in the 121 and rest is equity.
It’s not rocket science and if presented well should be achievable with Nickel 17-18 k still going into year end.
Https://lamancharesourcecapital.com/wp-content/uploads/Termination-Announcement-PR-20230929-VF-1.pdf
This is the reason that La Mancha withdrew their $100m from the deal with ACG along with Glencore also withdrew their $100m.
$300m as a conditional equity raise for ACG was not achievable.
$200m capital released back to LM and Glencore to re-invest in the right project
And that is exactly why Ivor it’s in all their best interests to work together to a solution otherwise everyone is a loser.
Worst comes to the worst LM,Orion and us ( 😊 ) can outvote Glencore and spin it out for as long as it takes to get the funding.
After all,we can all afford it sitting on a further $2.5B of NPV With Vermelho going fowards,so what’s that continued working capital amongst friends….
point again re the value here.
indonesias current nickel reserves (with grades decreasing all the time) are quoted as currently lasting only 15 years if they continue at the same output as they are now.
now just move forwards 15 years and imagine…
all current reserves gone and anything else that can possibly be drilled out is actually all they have left on a run down to have no nickel at all.
the mine life here for a as we know is potentially 40 years with only sustaining capex for the last 12.
the nickel price is almost certainly going to go ballistic again at some point.
the chinese will have had all the value they can get out of indonesian nickel and then indonesia will wake up and go-oh yeah,oh ****-look what just happened
One thing that we do know is that whatever the working capital raise consists of this time round then they will all be doing to themselves what they are doing to us
Alls fair in love and war and all that.
So far the new management haven’t done anything that hasn’t seemed fair and reasonable at the time.
Don’t know the answer but you could be right.
Anything at this point is welcome really equity or debt.
If it’s debt then this will take off again.
If it’s equity then I wouldn’t expect less than 7p as average weighted over 3 months.
We shall see