Member Info for wasarunner

Anybody other than me think the kinds of deals / rumours going about (Tesla - Giga etc) puts pressure on majors not yet positioned in Nickel to move early - perhaps earlier than they are accustomed to moving for assets? BHP / Teck being examples I know of but there could be others also. You can't surely believe you can come and buy Horzionte any time once the supply/demand deficit really starts picking up? It is one thing playing it cool letting Horizonte take all the risk developing the mines but I just don't think you are guaranteed a purchase down the line, or if you think you are, you'd better be prepared to spend top dollar.

I still think our assets are appreciating in value every month/year that passes with or without development and it is only a matter of time, hence the patience required to wait it out.

This is a tweet I've picked up sorry it is O/T so apt for this share:

""One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do."

I can't think of a better share than this one that this applies. The only scenario where there is something to do is if you still have literally any spare cash somewhere. Then buy on Monday.

My strategy is to do nothing until we're 30-50p, bought, or it is 2025. If in 2025 we're still under 30 or 50p I'll scratch my head and say I got it wrong and perhaps, perhaps try and find something else to invest in.....

GLA

Bloodshot indeed, and not intended! That's Friday for you.
GLA exciting week ahead, will we still be a smidgeon either side of 7p for compo close or will we move to a different (hopefully higher!) range. These are the frontrunners in our race at the moment:

6.75 merlin_andrew
6.9 pickedpeck
7.1 D220
7.5 Shellbay

My 2 significant purchases in August:
an iphone for my daughter
horizonte shares for me

I think technically that might be considered a tech/commodities hedge. GLA

good news. Which trade is yours?

Brilliant!!!!

Reminds me of a sketch but I forget the character / film. 'No I'm the real Jeremy Martin' etc.etc. I can assure everyone I am not the real Jeremy Martin but Craigieboy may be as he has a suspiciously aligned declared shareholding with Jeremy Martin's options....

Well 1.7p x 50 is 85p and one day we might see that here. That would look like a £1.7bn company at 2bn shares - it is a lot but still less than the combined NPV of the two projects at what in todays money would be a decent nickel price. I think in the future what we think of a decent nickel price today will look like a base nickel price.

Araguaia 'stage2' nickel price calculator tops out at £28k/t but has an NPV of USD $3356m. So I would argue 85p is achievable, and indeed, more.
https://horizonteminerals.com/uk/en/araguaia_project/
GLA

I think ivornomoney you asked where is the next EUA? It is here, this is it, it is this company.

EUA was worth some money at palladium $1k/ounce. It is worth a lot more at palladium > $2k/ounce
HZM is worth some money at nickel $15k/t. At that price we have $50bn+ contained reserves.

At nickel twice that price we have reserves above $100bn or 750x our current mcap.

So I think this is the next EUA, I struggle to see how it isn't. Because I think we will see nickel at those prices in times to come. Who will still be invested then?

I'm 46 and could benefit from the 30 years if Horizonte go on to own and run the mines. So my investment is a 30 year view anyway, but I think it will realise full potential in 5-10. And I'll wait that long. If we stay independent my money is there will be a point where we are at $30k/t and above. GLA

The reality is this: today we have, by todays metrics (nickel price, market demand) a profitable mine which can be financed and built. We are lowest quartile on cost.

The future is different. In the future, the nickel demand is going to be huge and much less profitable mines will have to come online at much higher prices. Plus, these haven't been developed in the last 10 years because not enough incentive has been available (in terms of nickel price) to do that.

So we will reach a crunch. What price does our 3.5-4m tonnes of nickel fetch then? Whether we produce it or someone else? It is going to be an astronomical price. I think this is what a lot of people are missing at the moment - that is to say, people who can't wait 5-10 years for the biggest return they could generate anywhere. It's kind of like discovering oil before oil became a proper thing. Nickel is a thing but it will be a much bigger thing.

It is slightly pointless plugging $30k/t into a calculator because I don't personally think we'll be independent by then but the future potential and value of what we have here is huge. Only when the nickel bull run properly starts will we see what that means but for a lot of investors it will be too late they've missed the train at that point (or they will be buying a lot higher).

We have a mine which will take 2 years to build which has 28 year mine life. I make that 30 years :) Perfect overlap with the increase in demand!

He could open the interview with 'Sorry I couldn't make the original date but just as I was about to come on Ms Dorri from Teck phoned with the offer'.

I'd love the next crux interview to be about how Jeremy sold Horizonte for a multi billion $ deal at point of financing. It would be worth his while doing it just so the smug interviewer could ask the most difficult questions he could think of like - 'so what are you going to spend your money on Jeremy' etc. :) You can take your HPAL question and stick it to my multi billion deal would be the answer etc.

Either way the fact you get opportunities like GGP, EUA, HZM on AIM is what we're here for. Yes bags of risk but I'm up by my lifetimes earnings through employment here on this share alone. Wishing everyone invested good luck in the weeks/months ahead as this gets nailed on by the big players sitting around their virtual tables negotiating it out.

Plus compo results time next week :-) Will we get more news before Tuesday close? Probably not but then when is the Crux call moved to, maybe an outside chance of news by then. GLA

Indeed it is about relative performance but Horizonte has much yet to go. I switched EUA->HZM at 3.5x multiple, too early it turned out, it peaked over 5x. But today it is less than 3x so my switch looks good today. Which will go higher in time? Who knows but a £500m mcap company like EUA has to really do something special to outperform a £100m mcap company like HZM just on the basis that the underlying assets/mgt are broadly similar. Of course if EUA have 10x the asset they have 10x the potential but this is where the value rating of an invidivual investor, then more importantly the market, decides what's what! GLA

Strummer good luck here as you say multibag potential - if Orion invest in the round at say 10p and are here for multiples of return - well that aligns your average 4p+ very nicely with their goals.

In time (assuming we ever produce still independentl) I calculated Araguaia alone could produce a dividend yield at your investment price - 4p - quite easily. Maybe after capex payback but capex payback when Nickel hits $20k/t should be a formality. Good luck.

A scenario is Vermelho gets sold and proceeds split to fully fund Araguaia stage 2 and perhaps a special div (it must be worth more than Araguaia p2 capex). That's a sudden jam today + more jam year on year I quite like the hybrid scenario also. Of course for full value Horizonte would independently develop both assets but can't see it myself.

Craig indeed and their current investment in Horizonte ($25m) is of course puny by their measures. It is a starter number. I think when they came onboard they probably looked at Araguaia + Vermelho combined and thought this is a good opportunity to take a decent % of the combined. They will possibly have opportunity to add down the line if and when Vermelho is progressed.

I think having such a 'cornerstone' investor (JM's words) also piles a bit of pressure on Teck/Glencore. Horizonte can leverage these sources of investment funding to ensure Teck/Glencore can't walk all over us and take us on the cheap. So they provide extra protection. Not to say they aren't in it for themselves - of course - absolutely they are. But it will be very very interesting to see what kind of foothold they get here in the financing round because they won't be easy to shift and they absolutely WILL require payment of multiples of their investment to buy out down the line. Us PI's might take say a 100% gain - Orion will not.

FWIW I've convinced myself financing will happen at PLC level to get Orion a stake of Vermelho and that this should get equity at signficant premium. Absolutely suits me if that happens because a little early 'monetisation' of Vermelho at this stage doesn't hurt in that sense as it attributes no value to the company at present and this unlocks some value by getting better financing (equity) terms. Always assuming dilution is very modest - which I feel it will be.
GLA

Worth reflecting on what private equity is and what investment here means for Horizonte. I'm not an expert by any means but it always interested me how this sector makes its money. An interesting article of how PE investment compare to open market investment here:

https://www.bain.com/insights/public-vs-private-markets-global-private-equity-report-2020/

For me the standout thing is that PE can get 'better deals' potentially than private investors investing open market because with a bigger wallet you can sit at the table (as Orion doing right now) and negotiate terms that suit you. You buy with scale.

Secondly, you have deep expertise in an industry so your clients feel safe placing money with you. Probably relatively higher risk than open market but you trust Orion to sift through at least 9 companies before investing in the 10th. You trust them to get that decision right (and obviously I know sometimes they get it wrong).

The signficance for me is these guys are here to make money, proper money, and outperform the market. They don't invest early, not too early anyway (exploration stage), but they potentially invest earlier than other types of funds which are looking for safe haven. In return, their investors get higher returns than would otherwise be possible.

Why is this significant for Horizonte? I think the reality is that placing your own capital alongside these guys at similar or better terms, when they invest, is a big de-risking stage. We can argue the toss over exactly what Orion invested their $25m at (equity equivalent) but if they take part in the placing here it will be very interesting because they expect a compound multiple returns on that investment. That means if they go in at 10p / 15p lets say equity, they are expecting 50p+ blended yield (and possibly much higher) so they are here for multi year returns or sale at significantly higher prices.

It really does mean people should have been piling in from last August onwards, the signal was there. I understand that Orion can afford to lose $25m so at that stage it does not guarantee outcome, but I don't think they will be prepared to lose the next tranche of investment which is coming here. Having my investment alongside theirs at lower average (hopefully significantly lower!) means yes - we took bigger risks - we had less of a hand in financing and we couldn't 100% know it would be done - but our return will be higher than theirs and we have to remember they are here for 'market beating' returns.

This is a huge opportunity, Orion know it, potentially other P/E groups we have not yet heard about know it, and it is all to play for here for the patient investor. I am trying hard to relax on timescales, I don't mind if the jam comes 2025+, as long as there is enough of the jam. Orion are here for a lot of jam. GLA

TDT indeed, and I was trying to make the point they have an info graphic which pitches a $17k/t study against a $14k/t study which suggests the mine has better economics (relatively) than in reality.

If you're a P/E group (and there are many), surely the current stage Horizonte are at - where you know your next investment completes the deal, no more post investment dilution, no more exploration costs, production in 2 years time, ready for the nickel cycle, is your perferred entry point. You don't want to enter too much earlier. Too much risk.

Therefore a P/E group looking for nickel investment really has very few options at 'Araguaia' stage of readiness where they can still grab a good slice of pie. They can buy into or buy projects later, at production stage, but the price must be correspondingly higher.

I'm quite hopeful Horizonte has one or more additional groups to Orion interested and can leverage multiple interested parties to get the best deal. I think it is a sellers market, really I do. Would you rather invest in Araguaia or Baptiste (at current stage of development?) I know which I would invest in! GLA

I think they've used a different nickel price for their forecast:

"A long-term LME base nickel price assumption of $7.75 per pound is assumed in the PEA which is consistent with the average long-term nickel price of forecasts provided by six base metals analysts. In order to assess the potential payability for the Baptiste product, stated as a percentage of the LME base price, the following sources of information were considered:"

I make that around $17k/t nickel price.

They are then comparing that to Araguaia Stage 1 (only) DFS base case £14k/t for the ratio of mine life to payback. I think at their nickel price assumption Araguaia Phase 1 should payback a lot faster as £3k/t difference is very significant above cost.

It looks like a bigger mine with $1.67bn capex which is interesting as it is bigger capex than Araguaia P1 + Vermelho P1, albeit produces more NIckel around 45k/t yr. But we know Araguaia or Vermelho resource would independently support a mine of this size but Horizonte have scoped a 'Horizonte' sized mine initially.

Interesting stuff. Got to delve into the numbers really to make sure nobody is comparing apples with oranges.