Member Info for wasarunner

Stay Strong everyone not the developments we wanted but hang in there. Just on Horizonte, it does feel like the deal is hinging on a path out of the virus, I do expect this to look a lot better from around Easter time but suspect progress needs to be made internationally (i.e. it isn't just down to what is happening on the ground in Brazil), for banks to sign. FWIW and not what we want but I do think Q1 will still be a buying opportunity, but I am hopeful deal completes Q2 or absolute worst failing that Q3. We are in a way at a bad point now but as Prof Whitty said the fightback has started and we should be in a lot stronger position in months to come. The world will seem a happier place by the spring.

All the fundamentals of this mine speak for themselves, really the stumbling block is Covid and once we have progress on that, we have enough interested parties now to seal the deal. 2021 will be Horizonte's year. I have no doubt about it. I am crossing my fingers for a resolution to Covid but also just the one more buying opportunity.

Wishing everyone a glass half full for the festive season! Then just keep topping it up. GLA...

Indeed $8k/t approaches and we were sub $5k/t at one point in March - who would have predicted this close price to 2020? You would think when this starts feeding through into the numbers a rerate may be in order sooner, than later...

Just wanted to wish everyone here a good festive season and of course, a prosperous New Year. Signing off now I know I post too much and I don't see many developments on Horizonte before Christmas but will read any posted links on external things that might affect us please keep them coming. I do hope to read at least the DFS on Araguaia over the break, perhaps the PFS for Vermelho to see if there are any nuggets in there or clues about where we are going. It does look like we will at least build the mine, in which case how it sets up will be interesting to me as I'm an engineer by trade (but know nothing about mines). Working hard to get house sale complete early Feb to add further to holdings here. Fantastic investment just needs patience. GLA and peace to you and yours whether you are trader/investor/or just passing commentator. Let the fireworks commence in 2021.

Interesting point that, I didn't read too much into them updating (backdating as it were) the significant holders list but you might be right.

That makes next update due before 31/03/21 if they are sticking to the letter of the stock market rules.

Wonder if we will have the new equity by then? It is exactly halfway through the H1 extension period for financing... but either way if there is an II seller presently we might find out then who it was.

Canaccord Genuity Wealth Management 145,000,000 10%

Last significant shareholder update they were down 5m shares vs the previous one so you could be right. I guess if you have that many shares and want to 'manipulate' the price a bit you can probably do it by buying and selling when it suits you. So it turns out moneysponge and djryan aren't the only ones trading this in passing ha!

Interestingly - if Cannacord are buying or selling they can't really be privy to the ongoing discussions internals. Would that mean potentially they aren't being consulted for equity? If the equity partners have NDAs and can see the other pieces of the jigsaw on the table they shouldn't be able to trade during that period.

One 'advantage' if we can call it that the delay has brought which I think can be considered such is time. This could actually work in shareholders interests. By finance complete pushing back 6-12 months not only is the longer term macro picture and how it affects nickel a bit clear for the financiers but also, it buys actual negotiating time. Now I'm not experienced in such matters but if you assume this is a very complex deal, for Endevour and Horizonte to gain the time required to get the best deal can be a huge benefit to us existing shareholders. You want to see what kind of deal you get if you run out of time on negotiations we can see this weekend. Hopefully Horizonte bought sufficient time to land the best deal they can, for the assets they've got. That can only be a good thing IMO. GLA

Just final point before I head out - risks - for me - Covid is the main risk. People aren't going to like that either but it is why we've had the delay, and until there is a good solution, it remains a risk. Mitigation is vaccines are starting to roll now. Lets hope they are effective and we see a clear path in H2 of 2021 to a more normal life - I do believe the financiers backing Horizonte need to see this before they sign on the dotted line. So for me, still a risk, but hopefully one we see dramatic progress on in Q1 as the world tries to get the virus under control. GLA

Do you mean to regulate it? The finance being sold in Russia is compliant with Russian legislation then what would the FCA adjudicate on? I don't believe a UK listed company operating in a foreign country has to comply with UK lending criteria for UK lenders...

hopefully only ISA rule changes might limit (future) contributions. If Horizonte becomes a producer I'm really looking for tax free income into the ISA that's my gambit for early retirement. If they abolish the wrapper - heaven forbid - can we please have a Teck bid for the lot ASAP so we can just crystallise the gain.........

D220 story of my life. Married couples allowance was abolished the year I got married. Mortgage relief thingy got abolished the year I bought my first house. And just as we get to that threshold (ok I know it is good money so no violins lots and lots of people in much worse situations) they'll tax wealth we've just made.

It is actually much worse for people with a lot of asset wealth but no income - around where we live there are plenty of older people in valuable properties etc. but with modest pensions and income. The argument will be they shouldn't be sitting on the assets these should form part of the active economy but like you say it will be hugely unpopular. It's also quite a low threshold - doesn't affect me where I live so much on the property side but if it catches basically everyone in the south of the country with property that's not going to go down well.

But as I said, mess has to be paid for somehow - I'm not a big believer in running a huge and ever increasing debt at govt level, I'd rather finance was under control TBH and happy to do my bit where necessary (but only once proper rich mind....)

Really think the CGT change will be a big one incidentally. There's no point playing around with the £12.3k threshold or a % here or a % there. To raise proper money, and people aren't going to like it, they'll have to apply it to first homes and probably bring it in line with income tax. Yes loads of logistical issues and hugely unpopular with tory voters but fundamentally there is only so many things they can tax - gains - wealth - income and for my money, gains will be a first target sadly....

For me it's currently around 30% non sheltered so that's where the CGT consideration is. If the rules did look like they were going to change on a tax year boundary I might cash 15%, say half of the non-sheltered which hopefully if we see a 20p shareprice would be close to my original stake. I am hoping CGT changes only come April 22 by which time Horizonte can complete financing and have a good few months building the mine and marketing and perhaps we have Vermelho. So I'll stick it out there - 20p+ on April 5th 2022 and personally, would consider a 15% sale of holdings but most like if and only if CGT is changing. Others here have higher SP expectations by then in which case of course even better...

Nthoftheriver a strategy I think some pursue is to take your original stake out. For people investing in say average around 3.5-4p then 15p that's really nice because you can leave around 75% of your investment running. Maybe that's what you're thinking. It is something I've considered also but the only thing that might force my hand there is CGT rules but maybe that's psychological but I do struggle with the idea to give up 45% of your win in tax. But if, say, you sell 20p for 20% tax your net is 16p and you believe the shares will get to 50p for 45% tax your net is 27.5p it is still better to wait. But you may have to wait 3 years for 11.5p. Otherwise I do think the real payday will come around 2023-25 but of course tax rules are likely to be very different by then, some poor bugger has to pay for this mess. But always worth considering de-risking as tax becomes moot point if it all goes south!

Just to answer the earlier posters question about 'sticky hands'. It is hard to know at the moment, a lot of shares are owned by PIs and since I have been invested there has been a steady migration of shares from institutions (City Financial, JP Morgan, Richard Griffiths, Lombard Odier) have all gone from declarable interest to non declarable and the sells have been soaked up by PIs. Who owns these shares now? We speculate that many of us (early) investors are here for financing at least, and are probably holding. The amounts traded in a given day are modest. There will be PIs who move money in and out to pursue other short term opportunities. Really, the SP drift up and down is on relatively light volume which does suggest that when real interest arrives shareprice moves will happen fast. We have seen this in the past, for example the rise up to 9p high after the debt mandate news was pretty swift.

I do believe many PIs (not me) will sell post financing and nothing wrong with that, it is all about risk/reward/timescales and why not take an early profit if you can't wait. But as many here have speculated probably new investors will arrive and the company can go into full marketing mode, as it will be clear that the mine is getting built and a new nickel player is arriving on the scene. I do think the shareprice will climb to production overall (not in a straight line of course).

Then don't rule out a full T/O. Anytime after the finance is completed this becomes very possible as the project is substantially derisked once the money is on the table. Personally feel this is more likely at around or post mine build complete but it can never be ruled out. These things happen when people least expect it.

D220 I don't know the full story but I think it was originally planned for Wales. Either which way very interesting. Yes it is huge for the NE that's an awful lot of jobs (and it is the future). The other thing that is starting to take off up here is wind and offshore wind, I'm no expert, but that seems a very solid future industry too. I probably need to do more research if anyone has any companies they can recommend worth reading up on.

Just in terms of shareprice and mcap, people have different views how quickly we get there etc. but it is general feeling both Araguaia and Vermelho could independently achieve a SP of 50p+ at least at production. Perhaps Araguaia needs both stages running to get there.

In the meantime many have less ambitious targets of 15-20p+ post financing rising to production.

But either which way the broker (Peel Hunt) is has current prices of 14p risked 33p unrisked. We take that to mean 33p once finance is completed is their target - this seems not unrealistic (that the price will rise into that kind of number) but this depends to some extent on the amount of equity issued in the finance deal. The assumption many here are working on is dilution will be quite minimal as there are many other options for financing which would be triggered first - debt/credit export/offtake etc.

I have a modest target of 15-20p post financing (say end of 2021) rising a bit at production then hopefully 30p+ in 2023. Vermelho news can easily double that though so remains the dark horse here.

Yes the mines do seem expensive but we have to remember they produce 29000 tonnes of nickel a year. At 1.5% grading that would be around 2m tonnes of ore that has to pass through the plant for processing per year. That needs pretty chunky machine, 2m tonnes is - well, quite a lot of 'stuff'. You probably need pretty robust pieces of equipment for that purpose.

Araguaia to production - expected mid 2023/late 2023 based on mid 2021 build start. 2 year build.
Profit will depend on nickel price of course but FCF is substantial, especially once Stage 2 is completed. It is always worth looking at the numbers including Stage 2 because Stage 2 WILL get built (financiers will ensure it).
The full finance package has been pushed back into H1 2021 but substantial progress has been made. Bank mandate for $325m, brazilian bank confirmed $32m (part of this probably), cornerstone equity investor has signed term sheet, offtakes in advance stages of negotiation. But - it is later than market anticipated so possibility of some shareprice drift in next couple of months we were expecting it end of year.

Vermelho - purchased for around $10m from Vale a few years ago at low point in nickel cycle. Vale pursued other nickel projects and Vermelho was surplus to requirements. I believe a small smelter royalty exists but other than that mostly paid for from cash (raised for purpose I think). Vale priced a large project with $1bn+ capex, Horizonte have opted for a more modest mine to be built in stages. Horizonte may progress on permitting / DFS but have openly stated they are seeking a partner for the project because it is too big for a junior to run alongside Araguaia. Vermelho is the big unkonwn - who comes in, how quickly does it get developed. Vermelho is pure upside - priced at $0 in current SP.

If you really are thinking 5+ years consider this:
- every chance in 2025-26 Stage 2 could be built so NPV of Araguaia at anything like a decent nickel price is over $1bn. We are looking for anything in dividend post capex payback of 1-5p on current shareprice nearly your money back.
- Vermelho is pure upside, will it get sold lock stock or will it be JV we will find out. It will get developed, it has better grades than Araguaia and could become a higher output ferronickel mine if this angle is pursued.

Don't forget Araguaia is for the stainless steel market, Vermelho is suitable for battery tech. Sometimes people just think of it as nickel. Not to say Araguaia nickel couldn't be converted to battery use but that's an expensive process at the moment.

https://britishvolt.com/news/britishvolt-selected-blyth-northumberland-as-the-site-of-its-first-battery-gigaplant/

Hope they'll be using Horizonte nickel...I think their battery also contains cobalt. You know it is real and it is happening when they build one in your backyard!

Good starting reading:

https://horizonteminerals.com/uk/en/investor_presentation/
https://spongeshare.com/research/horizonte-minerals-research-note/