Member Info for wasarunner

12-Mar-21 09:43:39 3.79 200,000
This was mine a bit earlier so agree 3.8 around 10.30 should be a buy.
We shouldn't be below 4p. If they can take 1m shares a day or more off Kabunga it won't take too long to clear.

Some selling (I assume anything under 7p is a sell right now) surprised that's happening it can only be people/entities wanting out completely, unlikely to be looking for a lower price from this level I would think.

I've been thinking about the BDO interview in which JM mentions finalising offtake in March, just personal view, I think they can withhold the terms of any such agreement from the market if it is sensitive to the main negotiation. So both statements can be true - that offtake is secured in march - and announced as part of the main package (say in Apr/May). Just my view and only in case any are thinking we will 100% have an offtake announcement in the next 2-3 weeks I don't think it is a given.

If they do start to release info peacemeal then that definitely flies in the face of the original strategy that this was one big negotiation. But the main thing is it is academic - 2 weeks or 2 months now makes no difference as long as they get best terms on the offtake and the equity.

For now, we drift, no sign yet of the institutional buying but maybe that will come when they sense the moment is near. It happened a bit ahead of the Orion announcement in 2019.

I'd be buying if wasn't fully loaded this level, given what we know, is an absolute bargain there can be no two ways about it. Whatever dilution and sp estimates for year ahead people have we will be a lot higher than 7p fully financed, in due course. GLA

mjb I've used ii forever and very happy. I didn't like the new user interface as much when they did their takeover a couple of years ago IIRC but I'm a bit of a dinosaur when it comes to IT I like old school. And I work in IT! But pretty efficient service and clear charging structure, efficient on the bed&isa etc.

It is the chance you take. I added this morning because I think (obviously) that the licence will be granted in due course. This price is a technical opportunity presented by a distressed/stressed seller. Happy to take advantage - we had a similar situation on Horizonte when City Financial sold down then Richard Griffiths. A buying opportunity. SP there is even now multiples of when they were selling (in the case of City Financial around 4-5x the share price then and I was loading up and loading up big). Value will out and we should get the licence. I hope the co can do a deal with Kabunga to place his shares though or it will be drips ongoing....

OTH combination for me really - single jurisdiction single resource (Horizonte if you ignore the cobalt) and speed of progress. I needed to diversify both - I don't necessarily see ACP as low risk by any means but definitely big upside and the key thing which doesn't bother me which seems to bother others is graphite substitution. They ain't going to find enough materials (of any sort) to build enough batteries in the next 5 years let alone substitution. So a decent position (for me) here and hoping something material happens in 12-18 months at least and then production hopefully to look forward to.

For me jurisdiction risk was a factor I really don't understand Africa but take a lot of comfort here from other investors I've spoken to personally, and the developments on the other miners in the area.

Nobody calls it right all of the time and the one thing probably everyone can agree on is timing in mining is notoriously difficult - people invested here a lot longer than I have probably already expected to be building the mine. Hopefully not long to go. Covid has been both an excuse but also a catalyst I think it will accelerate the move to EV if anything and that's good for these miners.

Think he only sells at or above 4p. I've kept an eye and while we've been under it doesn't appear that there is selling pressure. On the days I bought heavily, I expected the price to rise but was surprised it didn't (by more). In retrospect there must have been shares to sell coming from Kabunga to meet buyers.

So my view is he isn't done yet but we will see! Find out when the price gets back above 4p I guess. I haven't got more funds to buy otherwise of course I'd love to get more at or around 4p. I've got around the right weight by risk/reward for my PF. Ecograph news sounds good - shows similar mines can get financed.

OTH I think that's harsh I don't think anybody here believes themselves 'elite'. We all offer opinion only. Only people who know what's going are the BOD, not jd, not me, not anybody else really. I can't think of one person who posts on this board who considers their judgement better than anybody elses. All IMHO.

I like you think we will see 20p (and more) I just don't know how long it will take. If we had 2bn shares it would take less time than 3bn with all other things being equal. The difference between £400m and £600m mcap both very achievable targets in the fullness of time.

>>tempers expectations in the medium term on where the sp is likely to get to.
Long term of course the massive and obvious nickel deficit takes care of things assuming we can get both mines up and running. That's why I now see this as a long term investment and people like SJ will have to decide if they want to hold for the time period that will realise that value.

I just always thought they could leverage Vermelho (to get a high equity price potentially or to actually get some $ cash)

'Oh look - by buying this equity at 15p, you are also getting a share in a $2bn+NPV project. Isn't 15p a bargain for such a great investment' etc.

But it shows what I know I go back to the fact that I thought getting $0.5bn is easy but that turns out to be not the case for a £50m mcap company. We may yet be surprised but I now expect > 2.5bn shares which of course tempers expectations in the medium term on where the sp is likely to get to.

jd I think some (me included) thought you couldn't possibly finance Araguaia by 'giving away' Vermelho.

So: JV Vermelho for the 40% cash you need + debt to build Araguaia. or
Raise equity at project level for Araguaia and retain 100% of Vermelho

So expectations reset by the fact that if we issue equity at company level we dilute both mines (including the more lucrative one) and the new institutions buying in are getting a 'good deal'. Of course we also got a good deal buying even before them, but we thought we were getting a better deal than they would end up. In effect they are ending up with a similar deal to us (except smug people like Craig with an average of 2.4p or whatever who is laughing all the way to the bank....) and I mean that kindly :)

mjb606 I think we are agreed it was part of the $25m (I didn't read anything to contradict that) there was some discussion on exactly when it can be exercised. Either way these weren't the shares that got flipped and apparently plenty did! Hopefully the Canadian shares go to stickier hands, especially if they have to trade them on that exchange for now.

>>Got to hold at least two more years to see that kind of dough
OTH - tend to agree but no problems with holding over that timeframe (and beyond). I always thought around Araguaia built and running in is where the return is, perhaps also the maximum chance of T/O. I got a bit suckered into the wishful thinking on possible shareprices after financing!
What will be interesting this year is if anything happens with Vermelho. Get some positive developments there and I would think it would be a straightforward hold for SJ from that point. Pure upside, Vermelho. I'm intrigued about the DFS situation and whether Horizonte will progress it independently or whether we are likely to see a partner this year. GLA

It's not that much when I think about it - I picked up around 5m shares in not a long space of time and don't consider myself a 'big' investor by any means. I'm sure it will find a home if Kabunga wants to sell down to 0 and I guess the question is, does he. You don't want the selling drips when news arrives would be better if he was out beforehand.

It is interesting because it makes you wonder where we'd be on fundamentals if he hadn't been selling. I v much doubt the selling was consistent over the ~18 months or so. Presumably ramped it up as the price and liquidity allowed. My best guess is the company should be valued higher than it is now for what we know but for the selling and licence. Assume both are resolved, it will be interesting where we rerate to.

One problem I foresee in the short term is there will be a lot of stale bulls here because of the relative delay in getting the permit. You need to clear them anyway to move on. Hopefully we get progress in the weeks, if not months ahead. Fundamentals haven't really changed we've just got to get on with the permit-build to catch the still early phases of the EV cycle. Hopefully there has been plenty of time in the background to sound out possible sources of funding and this might follow in reasonable order after the licence. GLA

sb I'm cheerful (for me haha).

I don't see nickel direction being an issue at all. I invested for the deficit and the deficit will happen whichever processing route any given producers take. I like the fact we still have optionality on Vermelho - i.e. we aren't all in on HPAL already. RKEF / nickel matte route still very much available to us. Araguaia - RKEF - no brainer at the cost.

Very very happy with nickel fundamentals just the short term hurdle of financing to clear. I'm sure the BOD have it well in hand....

bb I've moderated expectations on post finance upside but only in the short term. Longer term I expect things like Vermelho developments and improved nickel macro and institutional interest as we are partway through mine build should take care of the shareprice. I'm perhaps less pessimistic than you but would be happy with 15p by yearend post financing. Whether or not that's optimistic/pessimistic - probably depends a bit on the terms of the deal. Less pessimistic than your estimate though :) so for once I'm not the most pessimistic on the board...

My feelings in the runup to financing is the recent equity raise, whilst providing a shot in the arm for the balance sheet and begin the build will be a constraint on shareprice appreciation so I hope they have already got reasonable terms with the cornerstone in case we are 'marooned' at 7.5p for the foreseeable. GLA

For our new institutions to invest. They oversubscribed at a placing of 7.5p so they thought it was good value at that number. They can probably buy below today. Why would they think it a bargain at 7.5p when the sp was 9p+ and not today? Fundamentals haven't changed. Surely they weren't buying it for a quick flip? Time for BMO Global Metals to earn their bread also and get marketing.

I only see the shareprice shifting off this level on one of two events:
- something which reduces the amount of equity required for the financing - for example, cash secured through offtake or additional debt
- institutional buying because of the fantastic long term opportunity this is.

Personally not convinced PIs are going to take this up (much) higher again.
All of this only matters for the financing sp and terms of course, long term it will take care of itself. But we still want the best price we can get for the equity portion. General market cooling and any reversal in commodities downwards isn't that good fur us at the moment. Yes the financiers will be looking at the 5yr+ picture but they'll still happily screw us down for everything they can get out of the deal.

wolfie latest we were told is 31 month build. Assume this includes the long lead items and assuming construction commenced start of March that would put us around Oct 2023 first production. But Pedro has brought mines in under time and under budget so here is hoping for a favourable wind.

I don't know much about engineering on this scale but the mine will definitely not go from 0k/t to 14.5k/t straight away. I'm sure the detail of how the production ramps up is buried in the DFS somewhere and will have to read it up. But I pretty much figured when they start the build H2 2021 (officially) you might be looking at end of 2023 for production with perhaps a first full year of production at nameplate in 2024.

A take off is what the shareprice does when financing is announced (subject to good terms of course ;)

Yes the final one which raises the remaining capex? Probably in a few months time. Now they have a broker in London and one in N America. SHould be able to raise the funds for the $0.5bn mine. $25m was the starters...

If nickel is $20k/t (or even more) when Araguaia enters production back end of 2023 my reasoning would be you don't want to dither and delay on getting the next $300m/annum stream online which is what stage 2 adds. Particularly if capex is modest $250m?! Chicken and egg of course but I'm sure it can get financed quicker. Maybe it gets financed Q2 this year lets see.....