Member Info for wasarunner

What do people think we can do pre-finance? I think 10p is a very straightforward target because at £140m mcap we are still substantially undervalued on NPV of Stage 1 alone and nobody thinks dilution will be significant to a level you wouldn't see an immediate return from there on finance?

Higher possible? Suspect 10p is a natural barrier / psychological barrier anyway even if not significant from a chartists perspective.

Seems likely we will touch last years high soon at any rate.

17,902.50. $18k here we come....

Page 337 of the Araguaia FS breaks down the capex requirements for Stage 2.

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

This is $199.7m. On Page 29 contingency for Stage 1 is stated as $41m. Assuming Pedro can bring in the mine in time and under budget (as he has done on other projects), that's around $160m - £120m remaining to find.

I would argue that to double capacity of the mine relatively quickly, that sum is beer money to the likes of Orion Mine Finance, who are well on the way to raising $2bn for their latest fund iii with stated aim "Fund III will maintain Orion's investment strategy in the global base and precious metals industry, according to the firm's ADV filings. Orion specializes in customized financing options for junior mining companies with late-stage projects, providing a mix of debt, equity and production-linked hybrid solutions, such as royalties, streams and off-takes."

https://www.buyoutsinsider.com/mining-investor-orion-nears-halfway-point-on-fund-iiis-2bn-target/

Once Stage 1 build is underway there is no way Stage 2 is going to be built 5-7 years later. Not if the nickel economics are driving this to get developed much earlier. $160m+ could be a single year profit from Stage 2 production at the right nickel price.

Thanks soundbuy - they knew what they were buying then! There is definitely mileage in pursuing the battery route with Vermelho (but there are risks of course if an alternative battery emerges) - you are always going to be valued, as a company, with a higher premium for a scarcer commodity. As such the battery grade nickel will always, once there is real demand for it, command a premium (both in terms of commodity price but crucially for us, in terms of equity value of the company) over stainless which needs to compete with NPI.

I hope they find and sign that partner soon, preferably in the next 1-2 years.

Vermelho is a beast. I'm not sure if Horizonte knew, at the time of purchasing it (I wasn't invested then) that it was suitable for batteries / HPAL? I know they did the study to prove it afterwards but does anybody know if they bought it on the basis that it might be? Either way - blinding bit of business for the $8m+smelter royalty whichever way you look at it - steel or battery.

My view on financing is stage 1 araguaia, being majority debt from banks is in and of itself not enough to truly interest the likes of Orion. Orion may be the cornerstone equity but they are unlikely to get to much equity. They could, however, play a much bigger part in financing Stage 2 or Vermelho and that's where I think their real interest is and why they provided $25m to get the first seat at the table. It wouldnt surprise me one bit if we get news on Stage 2 in parallel, or even immediately after, Stage 1 finance is completed. Gla

nonsense. We all want MOOOOOOORE of a good thing :)

Denmark - quite modern, very flat, relatively small. Got to be about the best country for EV, used to work in Copenhagen beautiful place. Plus the people get 'green' and love their bikes. GLA

Good points, both, and I particularly like the fact that I'm not the only person who doesn't think I can necessarily time the bottom or top. 1. Trust the BOD to get a good deal, 2. Fill your boots/add, 3. Wait. That seems roughly the investment plan here...

Vaux that's confident stuff are you thinking it won't drop back then? Only saying that because this is a second peak we are quite near the 2020 highs from bank mandate news. Do you anticipate new highs in short order? FWIW I would like to invest a very similar amount in Feb.

It feels to me like $18k/t is quite a key level for nickel. We flirted with it at the backend of 2019 but prior to that the only time nickel has been above that level you have to go back to 2014 before the chinese flooded the market with cheap NPI etc.

Given that inventories (at least LME) are relatively well stocked at the moment, and the price is 'knocking' on $18k/t and there is QE and stimulus in play, you have to believe breaking this level is a when, not if, in 2021. 2019 there was a rapidly declining inventory leading to the price rise.

Once we're in new nickel pricing territory above $18k/t I think we start to see some interesting features in the market. It becomes self fulfilling - participants expecting higher future prices start forward buying etc etc as long as the industrial demand is there. Then the EV story kicks in and they start to worry about supply. Perfect storm and the catalyst could be that $18k/t as I think it is is psychologically significant, if nothing else, once we start to see 7yr+ price highs on the commodity.

HOw will that affect Horizonte? Can't hurt the negotiations for sure! Particularly around offtakes I would have thought.

I'm going to suggest they get their web devs to 'default' the NPV calculator to the current nickel price that can't be too hard to get a streaming value from somewhere then round to nearest $500. $14k/t as the default will be toast in years to come and you want investors to see 'current' numbers! Especially when they are good. Maybe if nickel goes below $14k/t (unlikely hopefully) the calculator could floor at $14k/t.

Must say I'm enjoying SJ's persistence and AIM's diplomatic stance here! We all have our goals, if I could use my Jedi mind skills to get the sp to 6p by mid feb when my house sale completes then quickly up to 15p I would. I can't so I will just buy on the day whatever price I get. I too have an 8.2p-ish purchase which has just come to b/e so trading isn't my thing clearly!

Whatever happens its win win - temporary retrace is another buying opp, sustained steady rise makes all holders paper richer. Fwiw I think todays developments I really dont expect finance complete any earlier than March (I still think there is a covid angle to it that's just opinion though) so time enough to buy (or for those who wish to sell). Notwithstanding fundamentals of course which all point upwards and onwards. Gla

haha what's half a million tonnes here or there....
plus all the tonnes not yet quantified over the vast areas of land we have rights over! Very exciting!

incidentally that's a good reason 'explorer' valuation of Horizonte based on Araguaia should include Stage 2 assets -> the mine life is for both stages.

>>2.5m
3.5m TDT! plus fertilizer and cobalt of course...

I suspect just PI's deciding this is a good punt for 2021, either new ones or existing ones. The trade sizes don't suggest anything more significant?

What is interesting - but we've known this for ages - once there is interest it moves fast on modest volume. There just aren't enough sellers to feed the beast. Probably even DJ or Moneysponge aren't selling much at these levels and so to find shares - MMs have to raise the price?

Bodes very well for when news finally lands! Personally still hoping for that pullback for topup but if it doesn't happen so be it, we are all happy enough (those invested of course!)

my cheeky top up is getting more expensive when it comes... I'm sure we're over 8p now?

TDT agreed - I always find the situation with 'phase 2' of Araguaia very interesting. Because the project is that we would build it from FCF and as such it is a given, it should really be factored into the NAV calculations (for explorer stage at least!) from the off -> because no further capex requirement which needs to be raised externally is required. Personally of course I think this is unlikely and it will most likely get build quicker, but for my valuation calcs from now I intend to use phase 1+2 as this is what Horizonte have pitched as being the Araguaia project.

When we are producing from Stage 1 of course, to be valued as a producer, you should value at a higher NPV % on Stage 1 alone (Stage 2 not being built yet) but surely on an explorer valuation we should value the two stages together.

The interesting question is - if we start building Stage 1 and an offer comes in, will it base a valuation on both stages? I think it will have to. Even ignoring Vermelho.

The only reason we can be valued at £100m right now is the market doesn't know the precise buildup of the finance package, and possibly factoring a risk it won't get done. There just can't be any other reason. We should definitely rerate as soon as those two factors (simultaneously most likely) get resolved.

Ivor - agreed, I think the only people who will disagree are those who (for personal circumstances) want their cake sooner than later. Probably, you would get a better sale valuation in the early years then the value of the co at that price (vis a vis EUA) but a better long term value by going on to produce. So it probably depends on whether you need the money in next 0-3 years and are hedging here for a sale. I'm happy either way but don't want us to get sold for cheap as chips - got to get a decent value for it. If financing sets a floor of 20-25%, around the £500-£600m mcap range then that should also set a floor for sale and our insurance position then should be, that's the least we will every realise.

>> $3.3m USD = £2.5m GBP
$3.3bn USD = £2.5bn GBP sorry