Member Info for wasarunner

Just to put some meat on the bones of that calculation at todays nickel price.

$17500/t = NPV Araguaia + Vermelho = $3.3m USD = £2.5m GBP

20-25% mcap = £500-£640m
assume 2bn shares = 25-32p

That's Emmerson's calc not mine! But I'll take it. Can we wait till after Feb though? GLA

Ivor - it's fantasy land for now because I don't think we'll stay independent. But if we stay independent - short answer - yes! I intend to derisk by 20-25% at around or post production, maybe 2024-25 but if we still independent I would hope to run with 15-20m shares beyond that so a 3-5p div will do very nicely. Perhaps £0.5m/yr? I can eke out a modest living on that for sure ;)

Yes - the implication is that you should be rated 20-25% on exploration complete and feasibility done. You don't need to be a producer. Naturally, you should be valued higher (50%+ maybe up to 100%?) at production.

We won't have both Araguaia and Vermelho both producing for a good while but lets hope the 20%-25% sets a floor post finance, particularly once we are building the mine for Araguaia we should be transitioning from the 20% valuation (for explorer) to the 50%+ valuation (for producer) during the mine build for that project alone. Hopefully over the same timescale Vermelho will be advanced and that too can start to be valued in the 20-50% range.

The astonishing thing is I'm convinced Vermelho is adding $0 to our valuation at the moment. £100m+mcap should be for Araguaia alone right at this stage, and probably higher.

There's no doubt about it if you add Araguaia+Vermelho NAV (at any kind of sensible nickel price) we are hugely undervalued. I guess the market needs more indication that the projects will get developed - and if the BOD can deliver some key milestones this year we should start to be rated more like an eventual producer than a speculative explorer. The exploring is done here, the 3.5m tonnes is 'banked' or rather established in feasibilty, just need the next few steps for a good rerate!

https://www.emmersonplc.com/wp-content/uploads/2021/01/Emmerson-Presentation-November-2020-without-appendix.pdf

We get a mention on the table on page 10 - Junior Resource stocks should be valued around 20-25% of NAV and we're at 5%. There is a 4-5x upside there on that potential alone. Re-rate due?

Nice on NG! Yep it's all learning. My experience is it does get sold off at times there will be a bit of froth maybe at the beginning of the year as people think we're the next big thing then may cool a bit in Feb if nothing happens - ebbs and flows. Particularly if another AIM short term opportunity arises and people chase it. Notwithstanding of course it is fantastic investment just to enter here and keep your money in. I'll buy anything up to 10p in Feb, if it's above 10p I'll reassess as there might be better opportunities (for new money). I genuinely have no idea if we will have any news in the first three months, personally I expect the full package to complete in Q2 but it doesn't preclude news before then of course. Timing it or trying to time it is risky so the smart money is in or adding now and not trying to time it. Then there is a rising nickel price and wider market news which will draw people to Horizonte potentially in the first three months even without company specific newsflow. GLA

Now up $750/t on the day. That's broadly equivalent of a 0.5p dividend on 14.5k/t production. I therefore rest my case on that one. Onwards and upwards and GLA. People buying it today? About time I say!

I think initially pre capex payback a modest divi 1-2p. But the dividend would be able to increase substantially when capex is repaid and the second rkef is operational. There is also a potential windfall divi from Vermelho sale/part sale.

It doesnt sound a lot but if you got in low enough and hold enough shares to make it worthwhile then a 50% yield on purchase price for starters isnt bad. At full production capacity and solid nickel price Araguaia can make $300m+ gross profit (stage 1+2) or allowing for dilution 10p+/sh. Very possible to pay 5p from that after capex has been dealt with but I dont see 5p at first production.

There's no way they will wait to build second rkef from free cashflow so I think dividends sooner , than later, otherwise what the hell are Orion here for.

At a quid a share no arguments I think most of us are out divis or not! But thats a while off yet. Lets get to double digits in short order and get that first finance deal completed as Craig says it is key to unlocking the future deals to get the assets producing. It is going to be a hell of a year. Gla

Just on the shareprice you have to factor in also risk, vs reward. Are there better gains possible on 'flavour of the month' AIM stocks and chasing around - it is very possible. But would you put 90%+ of your portfolio on one of those stocks? I wouldn't. Proper research takes time, I think as PIs we have maybe opportunity to research a few stocks really deep and establish trust in everything, from the commodity to the mgt team to the financial position of the company. Or, you can punt for 5 stocks at 20% each weighting of portfolio and accept the risk one or two won't work out.

If you had £30k in here at 3p, with proper patience, you should see £300-500k in due course. For many that would be a mortgage free house purchase (at least in some parts of the country!) You have to be patient but this is a 10 bag potential at least from those levels, you just might not see it happen in a single year, like GGP, like EUA.

The most important aspect of Horizonte for me is not that it has 10 bag potential - that's great, but what's better is it has 10 bag potential with very low downside risk. Certainly from my average purchase price. I'm talking to my sister about her stake here at the moment as she will want the cash sooner than I need it, and I'm saying hold for 2023 at least for a much fuller valuation. Personally I'm happy to wait out the decade because I think divis will start to roll - always assuming we stay independent. GLA

Happy New Year folks!

I think one of the nice things about Horizonte is just to return to Strummer's point is it probably has some reward in almost any timescale investors might want to sit here. I suspect the shareprice in 2027 (if we are still independent then) will look very different to the shareprice in 2023 let alone 2021. But there is clearly near term reward for those with a 1 year time horizon, a slightly different reward for those with a 3 year time horizon. You can almost pick a shareprice value between the closing price in 2020, 7.35p, and a quid, and say 'when' not 'if'. Always assuming we have the management team who can develop the assets and do the deals - it is unlikely we can get there alone.

Anyway I expect fireworks this year but it really will just be the beginning. One aspect I have been thinking about and JM has mentioned before on calls is that Horizonte is pretty much (if you ignore fertilizer and the cobalt) a 'pure play' nickel company. There are very very few of them about. So for funds etc. with a very specific goal of having direct exposure to this single commodity they will want a slice of Horizonte. That could see Horizonte valued higher than peers when the nickel bull run gets going - peers with multiple commodities/metals that is.

Anyway onwards and upwards and I hope 2021 brings home the bacon. GLA

picked do you mean /12/ i.e. December? I don't mind if we see 14.7p by end of Jan at all don't get me wrong but seems unlikely....

I take the closing price on 31/12 for my accounting purposes annually and last year the price was 3.85p. This year nearly double that. If next year is double the closing price this year, I'll be happy. Anything more is a bonus. Still eyeing that cheeky top up around Feb.

All set for 2021 we are going to lift off next year. Good luck to all wherever your investments but make sure you leave some here - this will be a good place to be next year for sure. GLA

Hi Nagyi, good news on the house, bad news on the covid, and (hopefully) good news on HZM next year. Get well soon mate speedy recovery wishing you all the best.

Simply put, the question becomes - would a partner be willing to join us to build a mine with existing infrastructure, which is located on one of the highest grade deposits, with one of the largest reserves. With the only downside being the laterite/HPAL conversion cost. That's it. If laterites are at all going to supply EV, then Vermelho has to be right at the front of that queue based on economics. GLA

Haven't been through it in huge detail yet but the standouts so far:

Nearly 3/4 of the capex is the pocessing plant. This is huge. It means literally virtually no spend on infrastrucutre. Processing Plant + Contingency = $575m / total capex $652m = 88% of the cost. Only 12% of the cost has to be spent on things that, if you were building the same mine in some remote wilderness, would cost you significantly more $$$.

Why is this significant? Mainly because any HPAL plant with similar throughput will have similar processing plant costs so it makes ours the 'Carlsberg' of HPAL mines on cost.

Second thing is the stunning NPV at the forward long term nickel price of $19.8k/t. NPV USD $2373m equates to 91p shareprice attributable to Vermelho (at 2bn shares issued).

So something has to happen with this mine, it can't sit idle, and it is worth a potential 91p to shareholders. And the infrastructure cost to getting the mine up and running is trivial at <$100m. There is no way it isn't going to be progressed. Just need the right partner to lend the hand. And with that a very merry Christmas to all. Fireworks for 2021 (we hope!)

Vermelho is an interesting one - yes something can happen at any minute and we wouldn't have any forewarning, it isn't like they can discuss sensitive talks in open forum. But I can't see Horizonte spending much money on it at the moment because, whether we like it or not, until finance is done and dusted for Araguaia, company is still burning cash and has to have half an eye on that if they don't yet have a precise completion date on finance. So my feeling is very much Vermelho on back burner (but don't rule out the JV landing anytime!) It's always good not to be out in case the unexpected happens and as others have pointed out, JM often delivers the unexpected when least expected.

Maybe, my feeling is actually the deal is pretty much agreed in principle (subject to Covid) but they are waiting till it is clear build can commence. Of course you need a window between finance signed to start the build so they've allowed a decent amount of elapsed time for wriggle room within that. If you were Teck for example you surely would have had a decent amount of time now since 2018 DFS to ponder whether you would opt for more equity? So Horizonte are banging on open doors in the financing discussions I would imagine. Not to say each side in a negotiation won't try to squeeze every last penny and of course that takes a long time! To some extent as well in a negotiation people take the amount of time they think they have to conclude the negotation - so for example if they don't think build can start right now, both sides can draw out the negotiation pressure off. I imagine for example there is a lot more material stuff getting discussed on the Withdrawal Agreement in these weeks than say 6 months ago!

There's the scenario that it gets financed then taken out. Very possible as financing is the key derisk step. That might not be a friendly T/O that could easily be a more hostile bid but there could be a bit of protection in there by then if, say, equity is split between Teck and Orion (and say neither is the bidder) as both would need to agree to it being taken over.

For me the 'standard' course now is finance completes Q2 build starts Q3 and IMO the reason it will play like that is they need a very clear path for travel (international) and the banks need to be confident that there is a Covid solution. Personally I'm very much hoping 'normality' is after next summer, say for next academic year. We will of course see hopefully a slightly different world around Easter at least in the UK if the vaccination programme went to plan but 'normality' as such for me is likely to happen a bit later because there will be fairly predictable chaos around, for example, air travel with or without vaccine and international rules around that. It's not the vulnerable vaccinated people who will be flying over to Brazil to build the mine!

We just found a place to rent and looks like it is going ahead so all digits crossed for rapid house sale complete by Feb and I'm 'back in' with a cheeky top up here! Still have plan b. and c. if Horizonte substantially rerates before then though. GLA

Yes appreciate the diagram is a simplified process (and in practice there is a lot more work to go in pre production which the latest update tells us has been done/going on as we speak). But the overall timescales are what they are. I think initially build schedule slipped from start of 2020 to 2020 H2 now (most likely IMO and I know I'm not popular saying it!) will start H2 2021.

I still hope to add Feb but that's not why I'm being a realist. Of course the market anticipating finance complete as others have stated should re-rate us anyway, so the shareprice at a given point should already anticipate what's to come. Maybe 10p pre finance around Easter time might be doable even without news as expectation builds (assuming of course news doesn't land earlier)?

>>Construction commencing H2 2020 is roughly 18 months behind that schedule
Sorry should have read H2 2021. I always start to get years mixed up as we approach the new year!

If we didn't have optimism we wouldn't invest, if we didn't have pessimism we would invest unwisely. Not attributable to anyone I just made it up :-) I like realism at the moment because it lets me plan other finances around the Horizonte timeline.

The reason I believe we need to keep an eye on Covid developments (and generally I'm very bullish on those, but in the short term a bit pessimistic) is if we look at the 2019 investor presentation page 23:

https://horizonteminerals.com/news/en_20190124_investor_presentation.pdf

'Final Investment Decision' was due end Q4 2019, commence construction, and right now we would be halfway through construction. This was the BOD's best guess at Jan 19.

Construction commencing H2 2020 is roughly 18 months behind that schedule. How much of it is attributable to finance coming together more slowly than anticipated (we have to remember, Covid wasn't generally a thing internationally at end 2019) so you can't put all the delay to financing at Covid's door, and how much now is down to delays to Covid is a moot point. It is later than we or the BOD anticipated.

Fundamentals are fundamentals and quality will out as they say, and I'm comfortable it will happen in 2021 but a does of realism is useful at times. As much to stay patient as anything else.

On the plus side and this is a huge positive for me, my estimate was7p post finance rising to 20p at production. That we are 7p pre finance, with probably a lot of upside (won't guess a number but 15-20p range looks achievable) is a positive end to 2020. I guess I am saying the shareprice is where I expected it but not at the stage of the lifecycle I expected it! So further upside to come.

Really will shut up now, fundamentals are all there to see (nickel, the mine, the company) just need to see it play out in 2021. Not selling a single share, and not ramping or deramping just saying it the way I see it. GLA