Member Info for wasarunner

>>Araguaia 2 should be 18 months or so later if my memory serves me right (other posters please correct me if this is wrong)
Bwana the current plan is to finance A2 from FCF so if that is indeed the path they go down it won't be 18 months after A1 as they need some free cash first, and I think it might be an 18 month build. So if building from FCF I would expect it to be 2-3 years later.

However, I don't think it will be built from FCF as when production starts on A1 they would be able to raise finance (particularly in a strong nickel price environment in 2024?) to accelerate construction. So something like end of 2025 might be realistic for A2 to be operational - 2 years after A1? May be a tad optimistic side.

I am hoping Vermelho is also starting production around 2025. 2025+ will be the exciting time for those patient enough to wait that long here.....

To answer TDT 30p / 60p / 90p question - it's a tricky one! If we got 30p now I'd need to find a home for it which is inflation proof. Currently I believe nickel to be inflation proof in a commodity bull market. But there would be other similar opportunities no doubt to diversify into - I quite like copper as well. Otherwise very happy to hold out for the 90p levels (plus divs)!

£40k income/yr off £80k or so invested is very juicy indeed. I think possible here, just about.....

Crematorbcfc67 I am hoping closer to a 5p divi. EBITDA $60m, 5p divi assuming no further dilution would be circa £16m+, easily covered, assuming not too much being spent on further exploration.

On some of my investments I am hoping to see my original investment back YOY, that is very juicy indeed. Maybe not quite on Goldstone but with further upside potential from further exploration/production why not? That's the game with these companies, get in early, and take the income for years ahead.....absolutely no reason they shouldn't be distributing it assuming not laden with debt.

market mispricing opportunity. Do any here really think this is limited to 5 year mine life? But rerates happen over time and that's what creates opportunity. I was very happy with 700k shares at around 11p ave but of course wish I had more sadly no funds at the moment. Nice round 1m shares would be juicy. I don't know what the potential is but I am very interested in divi and I see no reason (except for exploration / development costs) not to distribute a lot of that net profit as divi in years to come. FWIW I also think gold will be a lot higher, my estimates are north of $2k in years to come as the deflationary effect on fiat take hold. GLA

It could be Q3, as long as it is no later than. What we don't want is what we had last year which was 'all on track' except the financing was not to be in 2020 after all, not H1, not Q3, not even Q4. I think give the benefit of a few weeks, maybe a month or two, but they really need to be targetting closing this by say September absolute latest.

My concern with finance isn't that it won't get done but they need to do it while equity (and debt) markets are buoyant. Market sentiment is fickle. Correction could be around the corner any day, the djia has been going up in a nearly straight line for as long as I remember it. A correction doesn't matter when we're fully financed and building up but it matters when we are agreeing terms. Strike while the iron is hot - good equity markets, good nickel price, banks willing to lend etc. In my mind next few months (hopefully) doesn't see anything too wild in the markets and we get this over the line. GLA

My understanding, and this is what the textbook says, is some early investors (in this case PIs) sell up move on and are replaced by IIs. IIs also do the majority funding of the capex. So slowly, IIs start to dominate the register.

IIs will set a share price they believe the company is worth based on stage of de-risking, balance sheet, nickel price etc. I don't think the SP will be governed by PIs any more. The company will have grown up. It will be more stable (albeit leveraged to nickel - a $5k/t rise or fall in nickel over a 6-12 month window could have quite a big impact on shareprice positive or negative).

Just my thoughts. I think all the initial investors who sell post financing will be bought up. The project is de-risked. My best guess is a steady rise from 10/12p post financing to 25/30p at production with perhaps the odd jump when Vermelho announces some news. That might not be enough return for some, if you think you can double your money (from 12p to 25p) elsewhere more quickly then those people will leave.

I think the shares will increasingly end up in sticky hands. Those who invested at 2p and 3p will have a clear choice, sell some or all and run the rest. Some won't hang around for the build, is my feeling. I will. GLA

It lands eventually. My other miner I waited patiently, nothing, then co said soon, nothing, then the big news landed today. As long as the big news lands it's all good. The day the news lands here we'll forget how long we waited for it!

I would really like to buy sub 5p but everything else I own (apart from the share which announced news today which I ain't selling) is down and I got no cash....

Does anybody have a reasoned view of when first divs might land here? I know we are early still and starting up production but being a tad lazy I haven't read up on the debt structure etc. Short /med term SP doesn't concern me I am actually more interested in when the company might be in a position to pay some earnings out as dividend because this suits my purposes and I do want to hold this for a long time as I like the gold hedge. Thoughts? Next year or is that way too soon?

How is this not 20p+ today? Crazy mcap to future EBITDA. On the need to find financing to extract extra gold - you have to spend some to make some. I'd be relaxed about it if the business case for the extra extraction merits the investment.

Just to add some context, I have some investments in a couple of miners which have prospective mines with NPVs in the 'few hundred millions' $. They have less shares already, and probably less dilution to get their mines up and running (as %) because capex is modest w.r.t. NPV.

However. None of them has the potential of $3bn+ NPV which Horizonte has sitting on two world class assets with a development path to get them there. And that's before you factor in stupid nickel prices later this decade, which I keep bleating about.

Therefore I still see Horizonte as the best overall total return potential in my portfolio (yes, I bought plenty at 2p, but still true for 8p), just it might take longer than some of the other companies. But that's why 3bn shares (or even more) doesn't really matter, but only if your investment timescale allows the development which Craig has mentioned below. I don't know if we will get the kind of re-rate event this year which some are anticipating, unless there is total company sale of course.

I see it as investing in oil tankers (metaphorically) vs smaller ships. This one might move more slowly but in the second half of this decade everyone will have wished they bought it. My price target beyond 2025 is very much 50p+.

You can tell it's a slow day on the markets today! On the plus side Horizonte has fallen a lot less than the rest of my PF. There are small consolations. GLA

haha I was trying not to read anything too literal into the pie slices! I'm sure the final numbers and ratios are still a bit up for grabs though you'd hope they are narrowing it down around now. 7.5 weeks of the half year left!

https://twitter.com/TwoUnity/status/1391622691304747008

chap I follow on twitter and this post makes a lot of sense to me. The combined IRR of A1+A2 would enable a major to pay a purchase price of $700m and get a decent return. $700m at todays issued shares would be 32p by his calcs - this would of course be lower once we have the financing dilution, but with the capex then funded, if a major bought us they wouldn't have to fund the capex (already in place as $ on the balance sheet) so in theory they would pay more.

30p seems a resonable buy price for Araguaia and tallies well with what Orion might look for.

Vermelho would be additional but (sadly) I think at current stage of development majors wouldn't pay as much. However from conversations with SR he suggests Vermelho is immediately worth more when Araguaia is financed. In any case I think they want to get Vermelho feasability + permit for a decent value - whether it then goes to JV or sale.

Exciting times. Multiple upsides whether we develop or get sold IMO.

Just on the raise that's why I think they will raise with a cushion - to both develop V to full feaso and A to production with _guaranteed_ no more raise. Both projects can have overrun and you can have contingency in the plan then add some. The last thing they want to do is break whatever agreement they have with the cornerstone - you can guarantee it will be punitive. The cornerstone will be focussed on not just the deliverable (mine) but also probably a timescale. Note that Orion had a timescale in their original $25m contract by which Horizonte had to start the build. There is a cost to PE to tying up their capital, you can bet bottom $ there will be a timescale it has to start delivering returns.

That's why I think there will be $500m, perhaps a bit more raised. They simply can't afford a cost overrun to go cap in hand back to market. And it is also why I think this will be the last ever raise.

I don't think they will raise again - in fact I think this next round may be the last (ever?) raise in Horizonte's lifetime. The pitch to the cornerstone (and to institutional investors is), if you buy shares at xp today, we will deliver a working mine in return for that. As such the expectation will be no more dilution. This is for Araguaia only but Stage 2 can almost certainly be funded from cash flow+debt - no more equity required.

Vermelho is an entirely different beast but if Horizonte don't go it alone they won't be raising equity to finance it, the partner will bring finance I think.

So I don't see future dilution - and with the cornerstone being a 'mining inverstor' (probably Orion?) looking for around a 5x ROI they will be wanting 30p+ from their 7.5p shares (just guesstimates) so they won't want to dilute down the line.

I think once you get your head around the fact that this is the last, but necessary, dilution in the lifetime of this company it is not such a bitter pill to swallow - it unlocks $bn's in value. GLA

gutted the argo shareprice hasn't kept up with bitcoin today (sorry, couldn't resist)

325 debt + 25 feb raise + 100 cornerstone + 50 public offering is already 500. I don't know then where offtake would fall. Maybe they end up taking less debt or, they end up with less to the cornerston 100 may just be an indicative figure. I still think they will raise 500m(+?) - why have any risk at all going into such a big project when the market appetite for financing is right? If they don't need all the cash - great - got that downpayment to start A2.

I think the earlier equity raise gives them a good feel for what will be easy to raise in the market. I believe they had subscriptions for just under $60m so they probably believe something like $50m will be easy (+ cornerstone). Will they need that much? Depends on the offtake we don't really know how much that might contribute to the upfront capex yet. My feeling is the public offering will be to appease the market/shareholders and insitutions they invited the first time around, it is probably marginal, though of course, the cornerstone may have insisted on it anyway.

Interestingly if Orion is the cornerstone and take $100m depends on the sp they pay of course but they would then hold a decent chunk. Enough to block a lowball hostile bid? With Teck & Glencore also aligned, probably. I think having Orion+Teck+Glencore on the shareholder register and in enough size will almost certainly protect us from being sold cheap, unless of course the three above were to work together to do a deal but I can't see that personally.

"The Norwegian Government Pension Fund is the largest of any sovereign wealth fund in the world, containing $1.1 trillion to date."

Vermelho capex would cost them 0.5% of the fund value. Good business I would say! They would get 30yrs+ returns.

Echo your sentiments Bwana, this is a gem on a 5yr+ timeframe. I think another point people might not consider is nickel price in 2028. It will be huge. Substitution is a thing but as others like TDT have pointed out nickel isn't the primary cost in for e.g. EVs. What price nickel in 2025-2030. Could be $30k/t+ - that isn't crazy talk when there is a huge deficit. Of course the company can't project that right now in the forecasts but you can bet your bottom dollar the whole market, and the majors, know it.

You can write a completely different script for Horizonte at 50kt/yr production with nickel price at $30k/t+ after 2025. So that is the timeframe to consider this investment, I'm sure of it. And our mcap will be in the billions if we get that far. GLA

Hi PP I'll have to listen back to the presentation but I'm fairly sure it will complete in the timescales of Araguaia build, and not in 2021. We could clarify with the co. I also think the timescales (1.5-2yrs) make more sense in the context of a much more complex mine build and a bigger project than Araguaia - as such I would also expect the FS to be a bigger project which potentially costs more (to do properly)? Vale spent $300m on just the drilling/pre feasbility!

the_watcher I think someone (was it BwanaM) clarified with the co that the brazilian bank debt would be part of the syndicate, so not additional capital. Sometimes the language in the RNS' has been a bit loose and so it gets interpreted both ways.