Member Info for wasarunner

As long as Pedro was clearly told 'make sure you leave some space for Stage 3 and Stage 4' when putting his wooden stakes in the ground. But maybe Horizonte can build those stages closer to Araguaia North and make the third mine plant up there - makes sense based on the geography. Araguaia (South), Vermelho, Araguaia North/Serra do Tapa. We do have 3x Onca Puma in nickel so we should have 3 mines ideally.

>>SP short term is not where we would like it.
It's higher than I would like it (short term). I need a small slip to be announced just before my buy in Feb then handbrakes off ;)

"1.18.2 Increased plant capacity
The highest value opportunity for the Project is to utilise more of the significant high-grade
Mineral Resource from the existing 8 ANP deposits by increasing the plant capacity. Snowden
completed a scoping level study of a scenario that uses the FS cost database and the FS
resource models to cost and schedule a doubling of plant capacity in Year 3 of production."

https://horizonteminerals.com/news/en_20181212_araguaia_ni_43-101_technical_report.pdf

Just to put a number on it - at base case ($14k/t) Snowden reckon Y3 of production to double capacity. What I can't 100% figure out from the FS (and is probably significant as a timeline) is whether that is 'commence building line 2' or whether that is 'line 2 completed and ready to produce'. From the wording 'cost and schedule' and also using a bit of common sense (you want the cash in bank from Stage 1 production from a couple of years before you commit spend on Stage 2) I assume Yr3 of production might see the commencement of Stage 2 build.

Stage 2 build might not take 2 years, but lets assume it does. For example, if power etc. is all in place already, and that factors into the time for Stage 1, it could be quicker.

Does that mean Stage 2 is complete 5 years after Stage 1 starts producing? Stage 1 will start producing in 2023 with a trailing wind, so that date is 2028.

So this is where my money says they'll do it quicker. Why would you wait till 2028 to start producing perfectly viable nickel output when the deficit will be kicking in properly by 2025 if not before. You can take 3 years off that timeline and start constructing Stage 2 if you have financing, probably from 2023+ to be producing by 2025.

It would be interesting to see the Peel Hunt revise their estimates for 2025 if Horizonte get funding for Stage 2 secured. Plus they might revise their estimates if nickel price moves out of previous forecasts.

GLA - this is only going one way.

I'm hoping discussions around Stage 3 are already ongoing :) Lets run before we can walk (at the right nickel price of course!)

Also at this stage I would imagine it is easier to look at finance for Stage 2 Araguaia than any kind of financing deal around Vermelho - with Vermelho still being at PFS stage.

There's just a lot more certainty around Araguaia at the moment so expediting Stage 2 should be a focus once Stage 1 is underway.

With Vermelho then we need the partner - that's clear from all the conversations I've had and all the communication from the BOD. But that too could be being discussed in parallel as soundbuy says the inbound interest and maybe they've made some outbound approaches too. We certainly won't know till a partner is announced, it can land anytime, and ANY news on Vermelho will put serious rockets under our SP when the EV FOMO is kicking in.

If financing news landed on both stages at once - it would be huge (for the SP). I'm not convinced partly because of the fact tha the DFS says the prices aren't concrete, but what I might think might happen is 'high level discussions' around what next and how all the bits fit together.

No reason not to sign off Stage 1, start building asap, and then thrash out the detail on Stage 2 in short order. We could have provisional finance on Stage 2 also announced in 2021 it is certainly not beyond the realms of possibility.

Yes, there is gearing, but financing could be conditional on milestones being hit with Stage 1. Orion are here for far more than Stage 1 because they won't have got enough of the pie with Stage 1.

Now I've looked up the Stage 2 capex I really think we should be looking at NPV of both lines when we consider valuation, with the nickel price racing upwards there's just no way it doesn't get built in short order after Stage 1. I did read in the DFS though (didn't have time to read the thing cover to cover) that the Stage 2 capex requirements weren't as fully analysed as Stage 1 therefore weren't as concrete - and also I guess they can change over time if more time elapses between DFS publication and Stage 2 build (less years between DFS publication and Stage 1 build of course).

But lets go with $200m, who's playing, Orion probably. Soon we'll be at $200m Gross Profit off a line a year if nickel keeps going. GLA

Nickel is the new bitcoin before it was trendy :-) Sky the limit.

Yes tongue in cheek! It's all good we all know what's coming, and what's 50p - £1 difference between friends when you got in at 3.5p. I only need 15p (sorry to de-ramp) :)

Nickel @£18k makes Araguaia (1+2) worth $1.49m = £1.1bn (today's exchange rate).
Divide by 2bn shares = 55p.
Lovely Jubbly. Who needs Vermelho etc.

we're basically looking to sell our business in 21-22 tax year for that very reason - in case CGT rules changes in Apr 22+ (sorry for the O/T but it does also apply to share sales etc)

600Thieves whatever happens to tax longer term (and I do believe there will be changes in due course) suspect it won't be in this budget. It is very difficult to change anything when you lockup 30m workers for their good and that of others. To do it and then raise tax - can't see it this year.

And if it is in April '22 then if Horizonte has financed people can pick an exit based on current tax rules in the 21-22 tax year. That's what I'll be considering as and when we see what plays. I hope the wrapper remains long term but might the total tax free benefit (not the contribution over all time) get limited? My personal ISA already has 5m shares so £1m at 20p and if they apply some kind of lifetime limit like you get with SIPP could easily hit some new tax limits. But all nice problems and I don't mind paying my share when that time comes etc. ATB

I've got 40 years worth of bed&isa at 10p if I only had 1 ISA. Not only am I not going to probably live 40 years but Araguaia will be mined out :) As you say nice problem to have! Looks like we won't see the (low) sp I hoped in Feb/Apr but no matter, win win for all invested. GLA

Yep, I'm revising the number (down) that are likely to be bed&isa come April. Seems unlikely we would be sub 10p and that was my best guesstimate for around 200k shares / ISA. April 20 we moved over a million/ISA!

You know you are invested in a good share when the de-ramper only expects the SP to double in the year!

I guess I try and keep feet firmly on the ground - I don't know how these things work really but there are big players at the table (Teck, Glencore, Orion), perhaps the future phases are under discussion but I base my forecasts for now on 'Araguaia Stage 1' only. We just don't have information at the moment on what might be happening with the other projects so it is safest to discount them from any valuation this year. Still convinced $0 in our SP from Vermelho at the moment, others may dispute this, though there might be some carry from nickel price sentiment into our SP of course which might reflect our total assets and not just Araguaia Stage 1.

>> I see 15p as a possible floor pre financing
sorry floor post financing

600Thieves I genuinely don't know what it will be, but I do believe finance should be complete, and I have always stated I would be very happy with 15p by end of 2021. It could be higher, with 2bn shares and allowing a valuation on Araguaia 1 only (discounting completely Araguaia 2 and Vermelho) that would be an mcap £300m which might not be too bad at this stage for a $600m+ NPV project at start of mine build. Still risks at this stage but obviously the finance is a huge hurdle cleared when it lands.

But - what if we have other news (over and above Stage 1 finance complete) and what if the nickel bull run really gets going? How can you account for that at the moment - you probably can't. I see 15p as a possible floor pre financing then onwards and upwards. 50p seems very achievable 2023-25 - yes - a £1bn company but with the assets we own, and assuming they are all being developed, very possible indeed.

I don't think it will be known yet. I suspect the cornerstone has underwritten an amount to be funded, but the price hasn't been set. My understanding of these processes is the price is set late in the negotiation - as it is subject to all the other aspects and terms.

So to some extent the events of the next few months (nickel price, negotiated offtake rates, and prevailing sp) could all have a bearing on the eventual equity price.

I'm starting to think though it will be insignificant in the grand scheme of things because for the $ they need to find through equity and the likely strike price, dilution will be fairly minimal. The exciting thing about that is - where are Orion going to get their teeth properly into HZM if they have a modest royalty, a few shares. They're here for more. Roll in the next stages of financing :)

I did start investing before the words 'commodity supercycle' and 'Elon Musk please mine more nickel' and '$3tn stimulus' were commonly bounded around though so at that time 15-20p looked 'good enough'.

I agree with Bwana if so be it I would invest up to 12-14p (which is funny I originally invested for 15-20p exit now I'd be happy to pay 14p) as with half an eye on the long game here the numbers are eye watering and a very solid investment case. Even at 14p minimum double your money in a couple of years is the target, probably more.