Member Info for wasarunner

CBax - can't comment (yet) on GRL as I'm going to have to get up to speed. I've had it as a tip and will continue to research and may add further.

On gold: normally I'm reasonably neutral. It has its place. I'm not one of those 'x% of your pf should be in gold' kind of guys. I can live without the security of gold as a backdrop. Also I haven't generally invested in explorers for that 'big find' upside.

But we are in a pretty unique situation. Copper/gold are meant to be inversely correlated. Theory goes (I think) industry is either pumping, or not, and if it isn't, then there's a problem and safe haven (gold) is where it's at. Now the reason I have some research in this area is that my other investment with gold exposure is a copper miner, I won't cross ramp it here. But I've been watching with interest that over the last year or so, copper has become the flying commodity, and gold hasn't retreated much. So which is it, and why isn't it playing out per the script?

My theory and again I need to research more deeply as I try to add more gold exposure is - we know what's coming. All commodities and precious metals will inflate against fiat because you simply can't create the kind of money that has been created to cope with covid out of thin air and not pay a price (inflation). So industrial production (or not) becomes slightly moot here - gold ain't going back to 2019 levels.

Add to that the potential for a wider stock market correction (which might put a dampener on other commodities) which is about due. Notoriously difficult call on timing, if we could get that one right we'd all be rich. But one thing is as old as the market itself is - the stock market just doesn't go up in a straight line forever. What goes up etc. I wouldn't want to call the correction on either timing or size, but much worse places to be than gold (miner).

So simply put that's my main reason for putting in here and will continue to research the co. GLA

bb 10 years is probably fast track for a nickel miner ha. They measure in decades.

The brilliant thing about this investment is specifically that. It will take competitors 10 years to do what Araguaia has done (from scratch) But the deficit will be good and proper 2020-2030 so too late to catch it...

they (we) missed the pre-covid slot. That was DFS (late 2018) to early 2020 a year and a half. Orion landed a bit after halfway through that. Could it have been done? Maybe. It is probably better that it didn't if covid would have held up the construction with finance in place as it could have had a really big impact on overall capex to halt midway through and, say, suspend the build for half a year. may have been a blessing in disguise really

Then I think the Orion money ran low. JM told us business as usual through 2020 but they must have known finance might (probably) close in 2021. And nobody could tell exactly how the second wave would play. I think the second wave added the final nail for completion in 2020. They might have been close in Q3 but the second wave came good and proper.

Now we have vaccines and it will be done. I'm trying not to be negative about how the BOD have managed it all, raising $443/463m isn't chump change from an mcap (when I first invested) around £50m, add to that covid. It isn't done yet but it will be. Maybe we pay some price for the covid situation which is reflected in the final deal not being as good as minus covid. The main thing is there is shedloads of upside so for newbies benefiting from 7.8p it should be a pretty clear investment. I took around 10% off just with the 12-18 month view. I'm super bullish 3-5 years view. And EV will kick ass. We'll be up at the caravan in a couple of months time and I'll eat my hat if a bunch aren't parking their shiny new EVs outside theirs. I still have my old banger focus what with JM not quite delivering yet.....

not for me - I expected it in Q2. The surprise was this bit (which is very very precise in the RNS):

" finance package remains conditional until all components are in place with a simultaneous closing targeted."

Nothing:
a. conditional or
b. simultaneous

about the 200m shares which just landed.
So there has been a change (in at least the publicly disclosed situation) since the december RNS.

Vermelho can probably command bigger overall numbers than Araguaia (hence worth more than 30p/50p overall) but because I don't believe we can develop it all ourselves it is pointless speculating on what we make out of it. I'd be over the moon if we could keep an 'Araguaia sized' portion of Vermelho as current shareholders. Assuming Vermelho could be twice as big (allowing for a bigger mine to be built by a major) that would imply 50% ownership.

>>So are you thinking 30-40p for just stage 1 of Araguaia or the whole project ?
This is sitting on the fence but the 'inbetween' case. When both stages are pumping out $29k/t and stage 1 capex has been paid back clearly the project has a different current value than stage 1 is complete, producing, and company are looking around for funding. It will also be heavily dependent on nickel price of course.

Stage 1 up and running for me I'd be very happy with 25p. Stage 2 up and running 50p. So 30p-40p seems reasonable for the inbetween stage. I'm hoping the inbetween stage lands quickly after Stage 1 is up and running because all the parties to the equation want Stage 2 as quick as possible. If nickel is anywhere near $26k/t when you finish building Stage 1 and start running material through, surely all parties will want Stage 2 yesterday?!

All of the above is also affected by shares in issue. Of course on this last point we should have absolute clarity and if the company guidance is still correct, in at most 4 months + 2 trading days.

bb yeah I use rounding liberally :) called it 1bn.

>>So assuming we end up with ~2.5bn shares and Nickel is as forecasts predict where do we see the market cap in 5 years ?
Still think it'll be sold in 5 years so slightly moot but £700m-£1bn could be commanded by Araguaia alone - 30-40p, assuming a clear pathway can be seen to Stage 2 build - financing in the bag or can be secured. I'd hope to be building Stage 2 if we're still independent having secured funds sooner than from FCF.

It's impossible to price anything for Vermelho at the moment because we don't know the terms. Very unlikely Horizonte will develop it alone - for both the capex and the hpal risk I think they will bring in an engineering partner/heavy hitter. So all upside from Vermelho is ignored in the above.

worst case (but I don't expect it to happen) for my calcs was $100m extra to find at 7.5p ~1bn shares on top of the 1.8bn already (including options). I'd assumed the other banks/eca might fall in the overall debt package.

But that's worst case and ignored offtake. I'd really like to find out if we can get prepay on the offtake and the attractive thing about it (from a de-risk and sp perspective is) that is probably the one bit of news we might get earlier than debt/equity. That might then give us confidence the equity can be done for less $. We probably won't get a hint about what actual equity price will be - can't see it myself.

If we had serious sp appreciation - lets say 15p in April. What would cause that? ofttake announcement? It would be hard to issue equity at 7.5p if the prevailing price was 15p.

But we don't know and my only concern (short term) was after this raise it might set a tight range - call it 7.5p-10p where the SP can't break out of because people aren't confident on the final number to drive it higher. Offtake might fix that though. Or, another thing that would fix it, is if these supposed 'a list' insti's we've now added by carefully selecting them onto the register start buying up all our free float. And they haven't flipped the lot already. JP Morgan was an 'a lister' and they sold out last year. GLA

thanks yorkie1 and thanks dj. For me a modest diversification (Horizonte remains my big ticket item and will remain that way) but nevertheless now have a basket of miners (which hopefully are not baskets themselves ha) which should weather any inflationary storm etc. Macro wise, I think inflation is coming whether and how govts try and hide it, investing in things which appreciate against $/£ is the place to be. Gold/nickel other industrial and precious metals as good as any. Gold is also a good hedge to a more general market correction - for e.g. DJIA has been on a bull run now for god knows how long - 2009 if we ignore last year? That's a hell of a run....

Webba, I kept doing the calcs when we were 2p and 3p and argued the same. Whichever way you turn it. You have to assume people are scared by the equity not to rate us higher. They can't be scared it won't get financed - a vanishing probability now I would suggest (particularly with where the nickel price is right now). So it has to be the equity element - being the unknown - that scares people.

It will be between 1.8bn - 3bn shares. I know that's a huge range but the point is - at 3bn shares and even very modest £450m mcap, 15p. So where's the downside at 7.8p? I don't know.

...contd

It might be easier to consider economics of Araguaia, in case V isn't included this year in anything. Ignoring V, I would like a 'deal' that gives clarity on where A1+A2 can get financed. My ideal is obviously minimal shares in issue, but a structure which suggests (or even confirms) how funding for A2 could be arrived at. We want to unlock that potential sooner than later and we want the market to rate us on it.

Each stage has to be done step at a time but by 2025 I expect Araguaia to be a monster - with a bit of luck we will be building Stage 2 having financed it. It won't escape the notice of the current round of financiers that if they play their cards right, they can get a slice of not just $14.5k/t of production but $29kt/yr. And they might just have readup on Woodmac.

So all to play for here. Vermelho is the icing but I'm completely discounting it from my (personal) financial modelling as my belief now is it won't enter the equation this year. Will be pleasantly surprised if it does.

GLA

I'm trying to keep periscope very much on the bull case here.

Woodmac long term incentive price $26k+/t gives us around $20k/t gross profit above C1 cost (keeping maths simple)
Stage1+Stage2 production ignore V for now gives us gross profit rounded down $500m+/yr

That's a lot of gross profit. Really, a lot. You can pay back a lot of capex/tax with that and have significant left over to divvi out (see what I did there).

Really for me its all about trying to stay 1% shareholder - a goal I had in latter year. I don't know if I can do it - out of my hands. Going to be close they will have to come in at 2.3-2.4bn shares all told so around another 500m-600m lets see where it lands.

I'm hanging around for my share of $500m/yr though. If it's less, can live with it. Hopefully we also get something from V, lets hope so. GLA

power line probably takes a while to build but possibly not essential to start other groundworks at the site? Its not like it is going to power the groundworks, it is going to power the plant. So maybe they got time but clearly a relatively long lead item if you've got to build 120km of it.... you don't do that overnight!

>>Time to load up was maximum fear of course - the 3-3.5p area....
course that was true of most commodity stocks! They were all pretty tanked at the same time...

I was offered just above 6p to sell 250k shares yesterday. Being offered 7p today. I'll take a penny a day rise. Liquidity is a problem but won't be selling a share till we see 20p (minimum). Time to load up was maximum fear of course - the 3-3.5p area....

haha very good - one of the things I found fascinating is the sheer amount of stuff they have to put through the kiln. Maybe it gets screened first but to produce ~14.5k/t just to keep the maths simple, 1% nickel cut off. You would have to feed 1,450,000 tonnes of material through it a year? That's a lot of material. Your $400 alibaba version might struggle with that..... I might be oversimplifying and a lot less material goes into the kiln stage but probably worth spending some money on.

Excellent news. Lets get building the power line! That $25m burning a hole in our pockets...

Hi Smoggy agree with your estimates for 2023 and 2024 IF there is clear route to A2 and/or Vermelho. That could be - Horizonte have financing lined up for A2 off the bat or they already have the partner onboard for Vermelho. I struggle to see how nothing happens with Vermelho in the next 2 years with what's coming for EV/nickel so my money is more on 50p than 30p but 30p is the 'if nothing happens on Vermelho' estimate.

If a bid came in probably depends what stage we are at in the build of the mine or indeed are we producing. Then it depends on the shareholders register as to what protects us from a lowball bid. We should know after the financing package who the insti's are and therefore have a better idea of if:
1. there is a clear potential buyer on the register - for example, have Glencore or Teck seriously upped their stake or
2. are there enough institutional holders to protect us from a lowball bid. Because they will want $$$.

They'll give me 6.1p for 250k. But not really interested - I wouldn't take any off the table till 20p earliest.

There are many ways this can play - increased resource through drilling, mine life, TO, or simply ongoing rises in copper (and gold) price.

It is a bargain - but there's no liquidity - that will come when start putting out results from the more recent shipments.