Member Info for wasarunner

62,297,182 shares

cost them $96.1m USD

worth £1.25m GBP at2p

reckless gamblers, clearly - like the rest of us.

>>Agreed. But instead of funding. Would it not be cheaper to buy the 130 million outstanding shares. Then go it alone. They have more than enough to carry that out ??

How can you do it 'instead of funding'. If you don't fund the mine it is worth 0 so it won't produce nickel. If you buy the remaining shares (which costs you money) you then have to find $600m instead of 51% of $600m?

And as has been debated ad infinitum La Mancha fund invests in public companies. Taking it private will be last resort. Glencore on the other hand might want it private so if they are going to bid for it that might be in the next month. I'll sell them my shares but only for £1+. GLA

Yes I imagine they are actively involved. However, because it's in their best interests to see maximum return of their money, they gain little by 1 month either side is my point. They have to give the deal the best chance of being landed because it's in their interests. They care a hell of a lot more about the $300m capital than a month interest this way or that.

If the lenders 'wanted' the mine, then first opportunity they had to force payment they would have taken. They don't, so the didn't.

Sorry just to qualify - it is significant that the banks didn't call the debt, of course it is hugely significant because it could have broken the company. What I meant is, I don't think it guarantees or near guarantees a deal. Whereas I think interim funding will. GLA

In and of itself I don't think this is that significant because - the banks want a deal of course they do they see more of their money back if they do. So they'll give it another month.

I do, however, see any interim funding announcement as hugely significant. I just don't think the cornerstones will put in more now they know the full cost unless there is a very very good chance of a deal and as they are at the negotiating table they will know how that conversation is going. I think that will make or break the company (in the current form) and if it happens I now expect it in April - I forget from the last RNS when we run out of money but feels like the right timeframe anyway since the last cash raise. GLA

I take it as a good sign trading wasn't suspended on tsx today - there seems to be a small volume there. If it's kaputt I can't see why you wouldn't suspend on tsx at the bell and suspend on the bell tomorrow 8am on AIM.

Given the last announcement landed at 2pm on tsx open when lse was open, perhaps the 'lights still on' RNS lands at 2pm tomorrow. I don't get this dual listing scenario with such fundamental existential newsflow I can't see how it can be well managed across the exchanges.

Just on the bonds - if the convo with the banks is 'what portion of the debt will you write off so this can be refinanced' then in return the banks will be saying 'what portion of your convertable loan notes are you willing to forego' to La Mancha/Orion. It'll be an interesting conversation for sure.

Given equity holders have already taken a 99%+ haircut I would say we've kind of paid our price already, it's the big boys turn :)

>>Bonds conversion was at 8 or 9p, which after consolidation makes new rate at 180p long time ago I had calculated

And so they were, a long time ago, and before the additional fund raise. Now they are actually at £1.268 to be precise (I got the 108p wrong):

https://www.lse.co.uk/rns/HZM/final-results-for-the-year-ended-31-december-2022-oju3hikmpsbe4ig.html

"At any time until the Maturity Date, the Noteholder may, at its option, convert the notes, partially or wholly, into a number of ordinary shares up to the total amount outstanding under the Convertible Note divided by the Conversion Price. The Conversion Price is 125% of the Subscription Price of 0.07 pence (after share consolidation 1.40 pence converted to US$ at a rate of 1.3493). The Conversion Price is therefore US$1.89. After the equity fundraise that was completed on 8 November 2022 (refer to note 14) the conversion price was revised to £1.268 /US$1.71."

La mancha and Orion bonds are a lot lower after the last dilution I forget the exact number and don't have time to look it up (108p so 5.4p in old money rings a bell) they got diluted too. Furthermore their bonds dilute more if they dilute more and this favours Orion who as a % of their holding have more bonds. So Orion are sweating this a lot less than La Mancha who hold more shares.

To take it private 75% have to vote for it. I wouldn't vote for it - if they can destroy the shareholder value to 1% then grab the spoils I'd rather it went to admin and nobody gets anything. They only have 51% of the vote atmo. I'd hope a few other PIs would also stick their fingers up to the 2p offer. Go down with the ship etc.

New PE investment is a very distinct possibility. Do you think Karim Nasr has contacts in the Private Equity world? Do you think he has connections perhaps in the middle east - exactly the theme being discussed here? If not how has he brokered $50bn in deals?

Or it could be curtains tomorrow. We'll see. I genuinely don't know and what I think or say doesn't matter because the market is closed and the negs are behind closed doors.

I think the asset sale option has flown. Why? Lets say the banks need $200m already paid (back). Buyer needs to pay at least that for Orion + La Mancha to see a single penny. But now the buyer has to also fund $600m (assuming they can't build it cheaper, and if they could build it cheaper, why haven't Glencore already made the offer). The buyer is not paying $800m to complete the mine. They're getting $400m capex already sunk. At this point Orion and La Mancha get 0 of their investment back so naturally they don't sell for $200m. Even if they sell for $200m (bank debt) + $250m (money La Mancha and Orion sunk) once $250m is distributed to shareholders they will end up with 40-50% of it so they take a 50% haircut AND it now costs the buyer $1.05bn for the purchase+build to complete.

I think it was a lot easier to sell the asset when they didn't need another $600m to complete it. Their best option is to find partners to fund it this way they can still see their money back, my worry of course is that, PIs who can't put in at the next round won't.

It might simply not be fundable now at $600m. We'll see. It's a monumental amount of money even with future cashflows and nickel projections (on top of the money already sunk). Suspect we'll know as soon as tomorrow - I can't see more money coming in in interim finance if it isn't fundable. If it is fundable and we get interim finance I expect the sp to go up a bit.

If it continues in the current shape/structure I can't see 1p just don't see it. The two other possibilities are a corporate restructure (that Could wipe out existing equity) and admin (that Would wipe out existing equity). I have no idea how likely each scenario is but $600m is not an easy amount to find in prevailing market and there is clearly existential risk so the current price to fail may well be justified. We may have much less than 50% chance continuing in current shape it may be 10% who knows. That's the big gamble and clearly any long term pi's still in have all digits crossed for that outcome.

I did think we would survive in current form while I thought the max amount we needed was around half prev capex as this seemed rel easy debt+equity and comfortable without wiping out existing sh. Now the figure is previous capex I have no idea.

Whichever way you look at it 'Orion Mine Finance' and La Mancha don't come out looking like they got much clue about financing mines. So how are we meant to get it right.

if the current shareprice is in effect ball****s relative to the negotiations then of course there is potentially massive opportunity (not that i would necessarily have the necessary conviction even if i had the funds to 'go large' at this point). say they decide 10p is the price point it's a 7 bagger or whatever, 20p is a 15 bagger etc. one whiff of such an outcome and up the price will shoot.

i'm not saying it is or it isn't but at the current sub £10m mcap anything more than a completely duff wipeout deal for existing shareholders and the price goes north. to a gambling type, and i know we have none of those on this board, it might be tempting.

the other aspect is that i do think a large proportion of the sp is the priced to fail factor. once it is clear a deal will be struck/found, again i would expect the price to rise as the probability of 10p 20p whatever suddenly comes into play.

at the moment i think the reason nobody will generally but the shares are: 1. existential risk that sp goes to 0 and 2. consequential risk of massive dilution.

anyhoo - it's q2. bring it on, whatever the outcome will be.

gla

To those saying 'I have never seen a raise at premium' I say please show me a company where 3 cornerstone investors diluted themselves (and others) 100x and lost $250m in the process. Not saying it hasn't happened but I'm not personally aware of one. Of course, I am afraid it will happen here, but like Mike, to me, it doesn't seem to make sense.

As I kept repeating still scratching my head about the $600m required. It is a colossal miscalculation of epic proportions.

Just for context, A1 'the simple, RKEF, based on well established technology in use over multiple decades) capex is now $1bn. From the Vermelho PFS, for the much more complex, HPAL plant:

"The initial 38 year mine life of the PFS design will generate a free cash flows after taxation of US$7.3 billion, returning an IRR of over 26% on an initial capital cost of $US652 million and C1 cash cost of $8,029/t Ni during life of mine, and $7,286 C1 cash cost in years 1-10 (applying consensus nickel price of $16,400/tonne)"

That $652m capex figure looks like a joke. Probably double it and add some (quite a lot I expect). GLA

Rob agree it is a possibility but very very very unlikely. Which I also consider admin to be very very very unlikely. Got to remember at a push Glencore can make an offer (not in admin) and still make money. Why go through Brazilian courts, counterbids, with banks offering to highest bidder.

IF (and I believe this is the case) the mine is still viable at this capex with SOME sort of funding I don't think it will go private and I don't think it will go admin. But that doesn't mean existing equity is worth anything/much.

As for negotiations being easy - of course they're not but that doesn't mean they aren't close to a solution. I think in this type of situation you can't get a 'hint of a solution' you get a solution. This will be done very tightly under strict NDA. Sure the market has a way of leaking information but at the moment either they have made no progress or there is no leak or the 'leak' is that equity will be done at 1p, it has to be one of the three options. My money is on - no leak and discuss are far advanced but not concluded.

$600m is a really big sum though so I don't think it is nailed on the company survives - the mine has to be viable. As TDT points out FCF is everything and the structure of the deal will have to generate enough of it to make it palatable for investors while paying down debt. Not so easy with total capex at $1bn as it was at $443m (DFS). But it doesn't mean it isn't definitely viable only the people sitting in the data room know all the numbers.

Not going to happen. La Mancha and Orion want it public.

Much more likely doomsday scenario is massive dilution but existing cornerstones maintain their shares by putting up their existing % of capital. Unfortunately in this scenario they can still make money down the line. Unfortunately for those, like me, without another spare £750k to match our prior investment with we're foobarred. Not saying this will definitely happen but much more likely than it being taken private and why not - why would new investors not come in for 49% of a fully funded mine which has already had $400m spent on it at bargain basement sp? I don't think that's hard to negotiate but I rather hope Mr Nasr can do a bit better. Lets see.

When the original RNS came out 'how much funding will they need' was a hotly debated topic.

Estimates ranged from $50-100m (the optimists)

$200-250m (the glass half full/half empty people - including me)

$400m the doom mongers ie tuan

The final number was $600m. You can't really make it up :)

Yes 100% expect the RNS of doom on next trading day (no bank waiver extension kaputt) OR (much more likely IMHO) bank waiver extension with/without some interim financing agreement.

What's confusing me (which also confused me on Thursday) is this: we're dual listed hence I was surprised not to get an RNS first thing on Thursday then it landed at TSX open I guess so there was no arbitrage LSE clients couldn't sell ahead of TSX clients. But TSX is open on Monday (tomorrow), LSE is not. So I wonder if there will be an announcement on TSX tomorrow as the bank waiver extension is material, or whether they will have extension to announce it on Tuesday when both exchanges are open.

Fun and games. In a kind of not funny way!

Market expects total or near total existing equity wipeout clearly. It might be right.

Still struggling with how you get 70% throigh a mine build with $400m spent and $200m remaining to be spent, then realise you need $600m more. Even allowing for shutdown and restart costs that's an epic miscalculation. Maybe they just hadn't tackled the hard 30% yet or something.

Just to stay positive I've written off my investment (it's worth around £10k at the moment on £750k spent). Suns shining still plenty to get on with in life. Only invest what you can afford to lose etc. Gla

I think they will get the money, the mine is still voable at that capex (probably tight but they can recover more by expanding it later, as in, the investors). I can't see it being on good terms for existing investors though (but happy to be surprised). I am also pretty sure thry won't hang around now because every month that passes is expensive.

To put it intonperspective since the original rns, 6 months have passed to raise $600m but this period included defining the requirement for $600m. The original finance deal took at least 2 years to negotiate the $633m or whatever was raised. So in thr timeframes required to raise $500m+ this is not a lot of time yet and the fact there is no deal yet does not mean there will be no deal.

It will go either way, in q2 I think. We will have the answer. Gla

Craig and I had comfortably well north of 50% of todays mcap, and possibly closer to 100%. Today its La Mancha + Orion + Glencore at the same value holding. Big players indeed - I kind of see the funny side (maybe Craig doesn't)!