Member Info for wasarunner

So I get you open a short at 50p and it goes to 8p then hovers for a bit - surely you close the short?

At that point your upside (so to speak) if you're short is 8p more gains if it goes to 0, or a humungous loss if it goes back up to 150p (because they do a clever funding package).

I don't short not out of principle but because of the unlimited upside risk etc. but at that point risk reward surely you would just close your short or do shorters get greedy and want that final 8p bad? You've got to be really sure, even more sure than publican, to hold them open at 8p surely? GLA

CaptainSwag I always thought that (very risky short at 10p and probably a risky short at 20p) but obviously tidy money to be made from contrarian levels if indeed he was short. I have no visibility of how much short was on it or what impact closing them would do to the price though so its hard to know whether it's that, or buying (probably bit of both) which has got us from 8p -> approaching 20p.

It'll be interesting if we break 20p, we were hovering either side of it I think when the 'we might run out of cash in December' news broke.

What also seems clear is the terms are tightly held. The price movements are PI speculation not driven by buying those 'in the know' - the current movement is very explainable with the 27th Dec RNS and the board restructure.

My view is the figure is already known (+/- a bit) and a proposed solution is already known (+/- a bit) and we're in the DD stage. Perhaps that's over optimistic but I don't see why it wouldn't be the case. We're 3+ months from the initial announcement and I don't think anyone will have been standing still. Personally I expect funding done and dusted in Q1 and to be full gas building in Q2.

I wonder if the funding gap hasn't been published (the initial technical assessment by the contractor must have been completed) so as not to spook the market ahead of the solution for said funding gap. I guess it is material news so so should be published but if the stakeholders (banks and cornerstones) are all undertaking independent DD and analysis of the figure with their own teams then I guess the company can claim it isn't 'ratified' hence shouldn't yet be in the public domain.

I have to say I do prefer a strategy of publish the solution with the problem rather than the problem itself unless the funding gap is less than the market expects (whatever the minimum 35% figure meant which was widely debated). With respect to the figure my thinking is:

a. it is probably sizeable and

b. it is moving every day operations are now suspended and hence can't easily be published anyway until it is known when operations can be resumed.

23 Oct "More detailed information will be given once the final engineering study is complete by mid Q4-2023"

19 Dec "The Company's cornerstone shareholders and senior lenders are continuing to undertake their respective due diligence as part of a full funding solution, which includes working with the Company and independent consultants who are undertaking a review of the outstanding Project capital expenditure and schedule. It is expected that this due diligence process and independent review will be finalised in Q1 2024, with a full funding solution targeted for early Q2 2024."

So the independent review has moved back if it is still Reta Engenharia completing it OR there is now an independent review taking place of the independent review already completed by Reta Engenharia.

GLA

Interesting that pre-funding payment by Glencore. Agreed the amount is peanuts to them. So putting myself into shoes at Glencore:

- I can prefund and get my money back or

- company is on its a**e and right now I can pick up shares at 20p in the funding round - and I own 19% now with Orion and La Mancha holding covnertibles. I can get a bigger holding % and score on both the offtake and the eventual downstream profits

I'd be surprised if Glencore sit on the sidelines if there is equity done, unless, as part of the negotiation they get some other concession (like cheaper offtake) which is more attractive to them.

I guess the main reason Orion and la Mancha don't want Glencore going up to 29% here is again the liquidity question - they don't want the float down to 10% - that might be a reason for Glen not to take more equity. We find out in due course!

Sorry correct Crypto I made the same mistake as the other poster who was out by a factor of 10 (on the share count being 8bn instead of 800m at 20p!) Ok well maybe 10% of float being traded in a day is significant then, traders exiting and either other traders taking them or perhaps 'stickier' hands. GLA

9.7m yesterday (yahoo data) and 14.8m on 27th Dec. So around 0.3% and 0.5% of issued equity respectively - not vast but when you consider the float being, say, 30% outside the top 6 institutions then it becomes 1% and 1.5% of the float.

Still think for the time being that looks like PI buying and selling, still too risky for most institutions I expect and we will get proper rerates when the company releases more information about the proposed funding. Up until then it'll be a traders playground to some extent and 'the market' will settle in the price range/trading zone many are comfortable with ahead of financing.

£25m mcap was priced to fail as is £45m mcap, for a company which has spent the money it has spent getting this far. The assumption is like equity wipeout or a 1000% (10:1) dilution. So what's it worth - nobody really knows at this stage because we don't know the funding terms but you have to see the current share prices as arbitrary: 8p is no less or more valid than 16p is no less or more valid than 50p because we don't really know the terms. If, as we speculate, there will be lots of debt and some equity 16p is very cheap. If it's all equity 16p is still cheap just not as cheap. I know debt isn't the nirvana because it still reduces ROI and NPV but at the current SP certainly it is better than equity.

I guess 'the market' will agree eventually on a sp (I would say that should be north of here) which prices 'company not going into administration but we don't know the deal). But there's not really a correct number everyone will have their own views on what that is, I think 20p is 'safe' someone else might think 40p is 'safe' and continue buying to that price thinking only upside from there.

There has to be a (smaller now) existential risk to equity but I do think it is receding. What's the right price now? It's what the market will make it in the next 1-3 months. Then we'll have the deal and the new price will be different again, higher, I'll wager. GLA

>>He sold out on the last fund raise at about 80-90p because of fear of another one coming, he was right to be! 80-90p better than the 15-17p right now and I don’t see it getting to that level for a long time to come if ever.

Yes and put it into RMM. Which went to 0. Prefer Horizonte pre finance deal at 17p to RMM at 0p. Yes I know he sold that one too but he's not the guy calling it right - most AIM shares fail so the correct scattergun strategy is to short them all and eventually that pays out. All IMHO

"I thought this should have gone higher when the interim funding was announced. Seems the MMs are marking up today, makes sense"

The interim funding landed at an odd time probably earlier than any were anticipating and in the 'holiday' season. Guess 'the market' is digesting it today. It will be interesting to see if there are any big after hours buys printed or perhaps printed today as the general sizes of the trades when I've been looking haven't been huge.

Either which way I still thought 20p was a reasonable level pre finance once it was clear finance is likely forthcoming.

Now imagine a scenario where they can announce some debt funding ahead of equity because Mr BNP Paribas has been very generous and restructured the loan. What price then for the equity? Got to be higher surely. I'm fairly sure if Orion and La Mancha want further investment to come in alongside their own equity they just don't want it happening at the current levels. I do also believe time is of the essence and this will get done sooner than the worst case timetable they have published. All IMHO

>>they will have misunderstood the other forces at play here - namely the big banks, and the other big cornerstones.

The other force at play here was the closeness to build of the mine. This isn't Glencore buying an explorer, or a patch of land off some PIs who are ready to cash in. This is a 70% complete mine with $400m already spent on it. They're unlikely to be able to pick it up out of admin for the cost of a pint in DJ's pub I would wager. GLA

Hi Barno and CaptainSwag - agreed Glencore seemed the most likely candidate AND they are in a different position than other third parties because they already have a holding and Orion and La Mancha can't entirely block them (don't hold 50%). The thing I don't get about Glencore buying it though are threefold:

1. If they wanted to, would they have done it already or:

2. Is part of the point of them doing the DD right now to ascertain 'cost to complete' with half an eye on what it would be worth to buy it or

3. Actually do Glencore want to buy a fully de-risked mine - fully built up and running as right now they share the risk with La Mancha (who lose more than Glencore if it doesn't) and Orion (who also lose more than Glencore if it doesn't).

It could actually be a combination of 2. and 3. at play and it might be that Glen eventually do want to buy it. Do Glencore care if they spend $400m now, or $1bn for a fully de-risked mine? I don't know because I'm not really sure how their gear levels work. I do think however that that 'they want it in admin then buy it for $1' brigade will be proven wrong and they will have misunderstood the other forces at play here - namely the big banks, and the other big cornerstones. GLA

For my money fair value for us to sit now pending a finance deal, which is likely to happen, would be 20p. It's reasonable as it's (probably) the lowest price any equity will be done at. So pre finance deal that's the gap that I think *might* close but I don't like to guess price movements because I always get them wrong!

Barno - a takeover could happen but you'd have to look at who gets what out of the deal. The reason I don't mind a takeover is Orion and La Mancha will want £1+ for their shares even just to breakeven and because they didn't buy to breakeven, they'll want more. And because Orion/La Mancha/Glen own 51%+ nobody is taking over until all three are happy - unless it is one of them taking over.

So a takeover - maybe - £1+ in that scenario - definitely. GLA

Happy new year Dambaba and all invested here!

Could be worse, we could be BRES:

https://www.youtube.com/watch?v=0sDWqy0b8do&t=2s

ouch......lets hope Tanzania is a bit more forward looking.

Rover think we'll need more but I have no solid basis for that because the info is sketchy at best. Delay is $$$ and all the while Mr Nasr et al need paying and don't come cheap.

For my own wishful thinking how about this one: currently hzm have a $65m bond, accruing interest. It can be converted to equity at sthg like 110p I believe (made up that number but the original rate was 160p before the dilution). So as a nice goodwill gesture (I know, but bear with me) Orion and La Mancha convert as part of the package. That's no new $ but equity is at a high strike price, gearing goes down, now suddenly it's possible to: a. Add more debt b. Invite other participants to commit to equity at a 'decent' price. So suddenly $100m more debt and $100m new equity is not so scary esp if the equity can be done with new players partly at 50p+.

As I said probably dreaming but I do wonder if the convertables will be a makeweight in the deal and also somehow facilitate the raise at higher prices - counterintuitive I know......but if it gets Orion and La Mancha a better retur in the pong run thru less dilution????

Crypto correct, my bad. Must read these things properly....

By which I mean - it may require Araguaia2 to be producing to see a shareprice well north of £1, which may take a long time and may require additional debt/equity. Araguaia1 producing may be worth 50p-£1 unless we get a very favourable deal, in which case maybe we get over £1 at production. I can't see £1+ till (nameplate) production now on Araguaia hope I'm wrong though!

BuddhaBob the numbers you are talking are probably only realisable in a medium timeframe 2yrs+ if the deal is mostly debt. When I did the calculations pre ****up here you could get to £4.50-£5/sh with Araguaia 2 producing around 2026 but since then we've had a pretty big problem to resolve here. Even debt will hammer NPV on Araguaia 1 making those former targets very difficult.

Nevertheless I think the current SP is nonsense and I am looking for a range of 50p-200p at some point post finance/production (because I don't know the finance package terms I don't know when we will be in that range and at what point in it). I really hope they can build Araguaia 2 - it will unlock a lot of further value adding the SP and I'm happy to wait till then - my concern now remains that may be difficult if Araguaia1 can't finance the Araguaia2 build because then you need further debt, further equity, etc.etc. all diminishin eventual returns.

50p-200p range in a reasonable timeframe (3yrs) will do me and I walk away with my shirt on, perhaps a modicum of profit. Which of course makes it a stonking buy to new entrants now...and your 12p average, if I'm even in the right ballpark.