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I don't want to cast a dampener on things but the forecast for Araguaia is rain every day for the next 14 days. Which wouldn't duly concern me but I'm off to Brazil a week on Monday!

Very interesting post Strow. You could understand why La Mancha does not want to see another Brazilian nickel mine. Neither do I! I agree with wasarunner, the banks and Orion/La Mancha are in so deep they have to see this through. I think it would be difficult for the company to persuade shareholders to waive pre-emption rights although the AIm rules are limited and the company could seek to push through an emergency placement to Orion/La Mancha/Glencor, which at 20p is going to be highly dilutive but not absolutely terminal for pi's. Obviously the shares would never recover to pre-crash levels however a year or two could see 30p to 50p depending on the nickel price and depending on there being no more overruns. My forecast is based on the old NPV numbers less the increased debt, maybe increased royalties depending on the structure, the range depending also on the pricing and size of the raise. A rights issue at 20p underwritten by La Mancha/Orion would make life interesting? As wasarunner said, the debt needs to hear the equity and the equity needs to hear the debt, some negotiation that is going to be!

PP, interested in your reply. The rainy season hasn’t started, in fact October has been much drier in Araguaia than historically, 14 day forecast today shows little rain which is surprising as November should be the first of the really wet months. Certainly there has not been anything unexpected in the weather, if anything it has been much drier that the company could have hoped for. On the other hand if they have made some serious miscalculation re the water you are not going to want to be digging holes between November and March. What is so bad here is that everyone is floundering around trying to determine what has gone wrong and what it will take in time and money to fix because the information put out by the company is so totally inadequate. Perhaps management doesn’t know themselves?! An even more worrying thought. Or could this even be a Ponzi scheme? One poster, I cannot remember who, wrote that he had shown some Araguaia photos to a mining expert mate who determined that they were way way behind where they said they were in terms of completion etc. It seemed a pretty credible post. Maybe the guys in London thought everything was going great when it wasn’t, eventually smelled a rat, changed the operations manager and bang, the truth was out! RNS’s reflect the fact they still don’t really know what they have left to do and how long it will take. This would seem to me quite a plausible take on where we are at?

Hi Mumbles, agree with your post, indeed I posted a very similar oservation a couple of weeks ago. What worries me is that I could understand a glitch that caused a couple of months delay or a cost overrun of $20, 30 even $40m however it beggars belief that management could have been so in the dark that they did not see this coming even a month prior. Assuming they were being open and honest with their previous RNS and with their investor presentation. The sp trickled down from 160p to 125p in the three weeks or so prior to the bombshell, undoubtedly in my mind because someone was in the know. But what that means in terms of a time line is that this bombshell knowledge was there at least in part at the time of the previous RNS and if that were to be the case management are in some serious bother. I think confidence in management has been shredded and I would think this is the single biggest obstacle to financing the delay and the overruns. No doubt Orion and La Mancha will have appointed someone to conduct a forensic examination of the data and the costings, soon enough we will no the outcome of that. I expect they are leaning heavily on the expertise of Glencor, trouble is are Glencor friend or foe? They are after all the giant vampire squid of this industry, to borrow the phrase.

I do not understand quite what Contrarian and Publican seek to achieve but in any event their posts are of no interest and contribute nothing to what is often a quite interesting debate. There is no doubt it was an incredible achievement for an independent to attract funding for a project of this scale. And of course to attract cornerstone investments from Orion and La Mancha. I would imagine that nearly everyone here invested on the back of that achievement and for a long time there was a steady and encouraging flow of information from management. Of course the RNS came right out of left field and caught the market pretty much unawares and still we don’t really know exactly what went so wrong apparently so quickly. The banks will be searching desperately for the assurances and confidence that they will not be throwing good money after bad and there will be a lot of horse trading with Orion, La Mancha and Glencor. The banks are bound to look for some equity contribution. My guess it will be in the form of a rights issue or a placing coupled with an open offer and the price on new equity will be 20p. In fact the price is almost irrelevant although it will naturally hurt shareholders who do not participate. Importantly any successful financing will keep the company in the game and raise hopes for some measure of a recovery, although the recovery could take a very long time to manifest itself.

Pickled. Let’s get this straight. You cannot reduce the par value of a share and you cannot issue new shares at a price below par. No exceptions. What Synthomer did was not reduce the par value as you state but offer all shareholders through a rights issue the opportunity to subscribe for a new class of share (which has a low par value). So you will have two classes of ordinary shares. Like having A and B shares. It gets more complicated. The rules on AIM are so loose you don’t have to have a rights issue, you could place the new shares. Problem is the new shares are not listed, only the 10 pence shares are. With all these complexities it may well be that the par value (20p) works to put a temporary floor under the market Sp, exactly as we have seen in recent days. And it’s good for pi’s because it makes it difficult to favour the big boys by way of a raise at a very low price.

Electric. You cannot get round the problem. Shares cannot be issued below par. A share split achieves nothing, if you think about if you land up with twice the number of shares they would have half the value. No accounting gymnastics can overcome the problem.

Winit, having a read CMR must be a player, the fact they are a UK company helps and certainly they are getting real traction in Europe. Intuitive utterly dominates the US market. I suppose that if Creo were able to choose they would run with both rather than narrow their focus. It does puzzle me that we haven’t seen more progress. I have absolute faith in the Creo technology, maybe it’s the nature of the market and all the technical issues, it just takes an eternity for these relationships to develop given all the medical risks, lots of trials and testing I guess. Hopefully next time Creo report we will see an update on all of this.

I cannot remember where I heard it but apparently Intuitive do not make acquisitions of this nature. They are so utterly dominant in their field that they can probably achieve their goals through agreements that grant them exclusivity without the need for an acquisition and all the baggage that comes with it. Apart from which Creo is so so tiny in comparison to Intuitive that it simply wouldn’t be worth the energy. But it would be nice to be wrong!!

Interesting that this seems quite a significant move up. I realise this can move on thin volumes (in either direction) but maybe just maybe there’s some news behind this. Would be so good if they could get a formal tie-up with Intuitive Surgical, it would appear such a natural and obvious step for both parties. Getting traction for organic sales is so painfully slow we could do with a step change.

100% agree I was absolutely blindsided on this one. Like everyone else. Contrarian excepted.

Thoughts of a takeout at 25p plus are sheer fantasy. Obviously existing management have made a colossal stuff up. There are very few candidates to take over the mess and that will be reflected in the price. Even the banks may not get out in one piece. A lot of people seem to be underestimating the scale of this disaster.

The future of the company will be determined by La Mancha. The company will have breached numerous covenants on the debt but the lenders have to see this through because to pull the rug will crystallise a massive loss. La Mancha, and I guess Glencor, will not want to right off their investment. So the banks, La Mancha and Glencor get together to cut a deal with the banks aiming to squeeze out some more equity to support the extra debt required to get this project over the line. A massively discounted placement will follow. Sadly this will be a wipeout for the remaining shareholders. IMO this is probably last chance saloon to get out and recover at least something. I am not a downramper, just a former investment banker who took a very unwelcome hit when the news broke.

Outstanding post 17.50 Tony. A well deserved record in terms of recommendations (30!).

I am wondering exactly how this project went from swimmingly well to disaster in 6 weeks.

Horizonte Minerals Plc (AIM/TSX: HZM) ("Horizonte" or the "Company") a nickel company developing two Tier-1 assets in Brazil, is pleased to strengthen its management team with the appointment of Mr. Fernando Marino as its Operations Director for the Araguaia Nickel Project ("Araguaia" or "the Project").

Jeremy Martin, CEO of Horizonte, commented: "We are pleased to welcome Fernando as Operations Director for the Araguaia Nickel Project, which marks an important milestone for Horizonte as we prepare to bring Araguaia into production given that construction is now around 65% complete. Fernando's extensive experience in commissioning, production ramp-up, and operating Brazilian nickel operations, coupled with over 20 years of stakeholder engagement experience in the Para state, will be invaluable at Araguaia and we look forward to working with him."

Did Fernando discover something shocking immediately following his appointment? There was never the tiniest hint of something awry other than the fall in the sp from 160p to 125p. It is incredible that none of us know, indeed the RNS itself offered no explanation at all. Given this massive gap in our knowledge how could anyone value the equity? What is the reaction from La Mancha? Does La Mancha know more than us? Obviously there was a leak of information to drop the sp to 125p. So some investors knew what was coming. It really is a rancid smell being given off here. I could see a class action coming out of this, clearly the directors misled the market.

Is it incompetence or fraud? How can you be 3 months from production on Friday and 9 months and $200m short on Monday? With no interim steps? Surely a month or three back they must have known they were $100m short and maybe 3 or 6 months off schedule so why wasn't the market informed then? Clearly there was some leak of information to drop the sp from 160p to 124p. I detect a very bad smell.

Enjoyed a nice round with the Rabbi today, he was quite happy to play on the Sabbath. Jack unfortunately was unable to join us. Honestly China, where on earth do you get all this stuff from? This is just a BB, it’s not some complex sinister political deviancy.

So 3 April company announced financing at an advanced stage, July even more advanced, September now drifting by, anybody has any intel on how the due diligence is progressing? Paul buys shares, more incredible drilling results and other stocking fillers but where’s the cash?

Oh it means Pensana’s remarkable run of never having poor drilling results continues!

Don’t worry AS1971. I’ll translate, I’m fluent!