Member Info for wasarunner

So re-reading that, really $25m was released. Sure, $5m was previously committed but why would Orion throw in another $5m if the company was going to go under? A funding package will be forthcoming, the only variable (albeit a big one), will be the terms.....

Mv01 Horizonte is say 35-40% of my invested portfolio. I bought that for something like £750k to keep the maths simple. I believe La Mancha bought Horizonte for $100-$125m total consideration to date and Orion similar, for La Mancha it represents 6-7% of their portfolio lets assume Orion is similar. In $ they risked more, in % holdings I risked more. I actually risked a shedload more _because I bought pre finance_. I risked finance as well as mine build they only risked mine build.

Generally PE I am lead to believe looks for a multiple of 3-5x. The uber greedy PI looks for more, but in my humble experience of investing more is hard anyway so I'd be super happy (as a blended return, over all stocks) with PE returns over a reasonable timeframe and by that I mean - I can wait the same time as La Mancha. 3-20 years will do. PIs are normally much more impatient and they want to make money by next week.

So I think to be a general PI you want more and you want it quicker which is why most PIs are disappointed. Typically you have less data to play with (La Mancha right now can see a lot more data than we can, albeit they may be in a closed period to buy or sell shares as a result).

I don't think La Mancha care that you made money. It's part of wanting to invest in stock market listed companies. PIs provide liquidity - if it was all LTH institutional investors there wouldn't be any liquidity for them.

10% float isn't enough for them if they want it public IMHO which is why I think it's not something they want.

>>however retail investors will be diluted and diluted along the way until nothing much will be value to Private investors.

This has been done to infinitum now. They already own 51% (more including convertables) so if they take a lot more of the overall dquity structure you end up with a company with essentially 3 shareholders 90% which is pseudo private which is not what la Mancha want otherwise they wouldn't have pulled out of their other Brazilian nickel deal in September. If they wanted 90% they could have already had it.

If they dilute via third parties they dilute their 140p and 90p shares. That doesn't work for them either.

So I politely disagree, but the market agrees with you. Sometime at the end of Q1 or Q2 which will find out which is right.

Good stuff mv01 hope it works out for all of us invested here. We will know a lot more as Q1 rolls on. Bring it on I say. GLA

I think you know this stuff btw :) And as I say I'm also not an expert so you may just be testing my naivety but I don't mind....

This share is a gamble because we don't know what La Mancha, Orion, Glencore are thinking and what BNP Paribas et al are thinking and what financing options are available to them. IMO the $20m is a signal that either it's 'in the bag' so to speak or 'nobody wants to put much more in' as others have pointed out it's not a lot of money for Glencore to lose. We don't have detailed capex/opex estimates and interest rate calculations availble to determine if the mine is financeable (but all of the above do, and they will be in the data room) so we just have to make out best guess on whether or not they think it's financeable, which is all that matters in actuality.

I'm a glass half full type person in the festive season so I say Horizonte is a goer in 2024. Still have 800k or so shares so stand to make something if it survives. GLA

Both opex and the debt. The higher the opex the lower the NPV because opex is straight cost every year so it affects the return. NPV is the discounted return (discounted by an assumed interest rate) of the total return of the mine rolled back to today. So if your total return over LOM is 5-6bn then the interest rate of 8% assumed in an NPV calc gives you a much better NPV than an interest rate of 20% assumed. But if we borrow a shedload more debt (which I think we will, and I hope we do) then the terms on that matter because it will affect NPV very differently if the ACTUAL interest rate on the new debt is 8% and not 20%. NPV simply assumes a number and a number of standards are used, I believe. Even the one that was used int he DFS may not be appropriate anymore as interest rates have gone up but a lot of the senior debt is against LIBOR which can fluctuate in the future in any case.

Nickel price has an astronomical impact on NPV which is why when Horizonte had the calculator on the website and you slid the slider to $26k or $28k (can't remember what was max) you kind of doubled or trebled your NPV. That's why the miner is highly geared to the commodity price because after you factor the interest rate on capex,opex,and tax, every $ the commodity price rises is nearly a $ in your pocket (less tax).

The problem as I understand it, and here is a problem for Horizonte. Even though the long term nickel price may be assumed to be a good number, lets assume $20k-$25k. And lets assume Orion and La Mancha and Glencore believe this and this is their investment thesis, and I believe this, and this is my investment thesis. Unfortunately, BNP Paribas may not. They may look at the current spot nickel price/ferronickel price and go - based on todays number your debt is not financeable. They're banks, they're risk averse. So the problem comes predicting a future NPV based on todays nickel price where the nickel price is such a determinant of NPV, and this is why I believe it is hard to finance mines in a low commodity price environment, and easier in a high commodity price environment.

Incidentally read recently that commodities pricing relative to wider market pricing is almost at all time or actually all time/50yr lows. This may be twisted by some of the megacaps in the US which have reset the market benchmark somewhat on the wider market/Nasdaq etc but still shows we are in a relative bear cycle in commodities. That of course makes the current situation more tricky for Mr Nasr.

Not an expert by any means but that's how I see it, above.

hi mv01 i can't see there being no equity personally. in all scenarios the current sp is nonsense so as you say the current sp prices no deal. i don't think orion la mancha et al want to do equity at the current price (doomsayers will disagree here of course). so i think 'all debt' is an unrealistic assumption.

the problem is it is hard to calculate and back of a *** packet calcs won't cut it. what is the realistic opex - it is bound to be up on what the dfs stipulated. the nickel price as others have pointed out is another very big factor, the banks, and anyone lending debt, have to know you're going to get it paid back and you can handle the interest. that's why equity is 'safe' though dilutive you don't have to make that calculation.

in my thinking debt reduces overall npv but number of shares remains as is so npv/sh drops. equity increases the number of shares but keeps npv as is so npv/share drops. in practice a blend of the two.

my gut feel without precise maths is we're worth 50p+ after financing or, worst case, 50p+ after first production. a lot depends on what la mancha/orion want to, and can achieve here. it would be nice to think they'll get a return on their £1.40 at some point but that does seem a long way away at present.

I actually disagree that it has made refinancing more difficult. It should be possible to finance this on terms that La Mancha and Orion etc deem 'acceptable' even if they didn't want the cost overrun. Why? Because in effect the big 3 can determine a price to raise equity if it is going to be equity, or alternative vehicles if it isn't going to be equity. So the current price is the current price but by literally putting anything out there which makes it clear what the cost overrun funding required is, and which portions will not be equity, and what price the big 3 will underwrite equity, you should be back up to whatever price La Mancha thinks is a good price for the equity.

That then reduces the argument to 'at what price do they want to do equity and how much equity do they want to do?'. I would further add 'and what of that equity do they want not the big 3 to take - i.e. wider market or the other current institutional shareholders'. The equity will be the remainder of what they don't raise via other means.

Because we don't know the cost overrun and we don't know their plans re equity (proportion, price), the market can't value the share. But the interesting thing is THEY DO. They probably know both, and I am pretty sure by the relatively small amount of the interim raise, the main terms of the finance deal (the broader parameters, give or take) must be agreed between the cornerstones and the banks. I think we will get back to something approaching 'true value' when they show these cards. At the moment the people not in the data room are working blind. So billyv is as likely to be right as is publican (with what we know). GLA

No Idea why it dropped the caps. Testing Testing.

rover, i think the answer is relatively simple to your question? the market never values a company at 'true value' as it doesn't really exist, the value of the company (mcap) is what the market thinks it is. i think your question really is why does the market value horizonte at around 1/2 of the mcap it valued it pre finance.

i think the answer to that is also relatively straightforward. there is existential risk to the company, or rather, that's what the market thinks. the market here is made up of mainly pis, and fidelity, who were the ones that sold (orion, la mancha, glencore, azvalor, etc. the top 6 institutional shareholders excluding fidelity, did not). so you can reduce this logic to 'pis think there is existential risk to the company, and fidelity were mighty ****ed having bought out cannacord or whoever, at the latest developments).

in reality it is not possible to value the company until we know the structure of the refinance deal. all of the financing options hurt npv per share to some extent and companies should be valued at a fraction/multiple of npv per share so we don't know what it's worth. my bet is a lot more than 10p, in due course. gla

Oh no tuan is back in a new alias. It can't make a profit in the next 12 months. That doesn't make it a bad investment. Amazon didn't make a profit in the first (how many?) years? And you're a bit late to the party, most of the money left already around October the 3rd.

Incidentally shareprofits reckons a nailed on short to 0 or close to. Normally, for me, that's a clear buy signal as you need. Granted, better would be Cramer shorting it but its the best we got. All imho dyor etc. Amazing ehat comes out of the woodwork once there is a bit of price volatility.

>>big boys will be selling soon

the big boys are Orion, La Mancha, and Glencore. I believe they bought today ($20m of debt) not sold.

I think 'the market' got Horizonte wrong. It didn't understand the shareholder structure and didn't have clarity on the shortfall in $ or the mine profitability when it was refinanced. It ignored the Glen/La Mancha debarcle with the other mine deal in July where La Mancha clearly wanted market participation. Glen and La Mancha learnt a lesson and will not make the same mistake here. It was unfortunate that we got to single figures again and good luck to those who bought. I think a recovery of sorts is on the cards longer term, La Mancha will want to make money on this, as will Orion. And they will. Today is the clearest signal yet that this is financeable - the shortfall is manageable with the funding options available to Mr Nasr 'completed $68bn in deals' and Mr Smith 'likewise'. GLA

It's Rovers message that got me thinking:

"I would have liked to have seen more funding in the interim, maybe $50 million"

So I can only see three scenarios at play here (because, agreed, $20m is not a big package in the scheme of Horizonte):

1. It was all the additional the cornerstones are prepared to lose in a 'no deal' scenario. Unlikely IMO....or

2. They can raise $20m when needed easily. But this doesn't tally with reassuring the market, which is now the BODs job, as the market doesn't like existential revolving mezzanine finance, so unlikely IMO .......or

3. (Most likely IMO) The main finance package is all but agreed based on the DD underway and parties are confident this can be and will be completed in the $20m window, whatever that gives in months. Of course in the holding RNS they have to give the 'worst case' timeframe but I now expect it to be much earlier.

Final parting thought - you've stood down the contractors sometime between October and December. You desperately need them to continue building the mine for you, because re-contracting people without experience of this build is going to be expensive, time consuming, leading to further delay and cost. How long you got? How long till the contractors find other work? You need them back on the build earlier, than later, I would suggest and that is as good a reason as any for getting the finance package over the line at the soonest possible time - literally all delay now costs $$$ and eats into the cornerstones eventual returns.

Don't be surprised if the final funding solution is completed in Q1, is what I'm saying. GLA

Also, this RNS came earlier than anybody (including me) expected it. Don't be surprised if the main package comes earlier too. Mr Nasr is working overtime and encouraging others to do likewise, I expect.....

""There can be no certainty at this stage that the full financing solution will be achieved.""

...but we'll throw in $20m anyway, with what we know in the data room. Which means the project is financeable and will get financed. The share should get back to par value as that would be reasonable (it was the price before the 'we may run out of money in December' RNS), but it probably won't because PIs are chickens and will prefer to sell for 10% profit.

To me this is a signal it will get financed unless the nickel price collapses in the next 1-2 quarters. And I also think they won't kill equity - they've just put up something like 10% of the capex all debt. GLA and merry new year to you all.....

Anyways, have a good break everyone we won't know much more for months to come. Wishing everyone the best (even the shorts and the publicans!) It's a cruel beast the stock market if we roll back a year this was looking pretty good and here we are. I'm super sad more because I lost a good friend over this, gone forever, his loss is much greater to me than any financial loss here. Life sucks sometimes best to be clear about that and walk with eyes open. GLA

Yeah if it was all debt we'd be back to a significant portion of the former price in a jiffy. Less the impact on NPV it would be 'as you were' equity wise. And a lot of options would lapse eventually because they wouldn't be in the money so total shareholding would stabilise once Orion and La Mancha converted their bonds though they have a really long time to do that.

Suspect all debt is a fantasy but I totally get where you are going with the illustration. La Mancha and Orion both have a headache and an opportunity - they can increase their holding here by taking on tranches of equity or other options like convertables not available to others, and they have the headache that if they don't do it they lose $250m where I only lose £750k. Then there's the banks with the $300m odd debt with whatever was already drawn down as potential loss. The only thing is out of administration the banks would get something back so they can't take a total loss here in any case.

Hi Rover your maths is reasonable and for the illustration (I haven't checked all the numbers) I totally get it. If you don't participate (I can't, even if offered) you get more shafted by others participating because their average reduces and yours doesn't. And for the record, I do expect equity so a level of shafting will be received (by me) to be determined.

What becomes interesting then is if there is an uneven split among major shareholders, and also, their relative risk positions and that of the banks. The whole equation is much more complicated than just pure maths, although of course, they will be doing their pure maths also. In a way I think the reason we might be saved is because of that complexity and remember it isn't even one bank we are dealing with, it is 5 + 3 ECAs.

The competitive tension between La Mancha who want it liquid, Glencore who might want it private, banks who want their money back, and Orion we don't know what they want, is probably what keeps us going in the current structure IMO (the other parties are less significant though we do still have the 15% II holding in 3 positions to consider).

I see the latest developments as positive, the two senior board appointments, and the current plan and timescales. Other than that it's a wait and hope and assume it's not the 7p issue and 20:1 consolidation scenario all over again 'cos that didn't go well last time :)

Also I can't see part finance solutions now, it'll be total finance or nothing (notwithstanding the bridging facility). The idea that anyone parts with some cash until they can see all the cash is not going to happen. And because of that I can't see the SP doing much until the finance has landed. One way or another, there is going to be a huge bang here in a month or three, I hope for all longs (traders/ short term investors/LTHs) it's the bang upwards! That said they might underwrite the finance then offer it out to market but that bit will be wrapped up quite quickly I expect. Every day on this project now costs megabucks they will want it sorted sooner, than later, I expect.

Fair point CpatainSwag perhaps Glen could/would want to take it all - our protection there as you say are the other cornerstones which is why when it went Pete Tong in October I took some solace of the fact that their interests would be split and for that reason it should survive providing always there is enough in it for everyone to keep it going. If it's not economically viable then it might end up going down the admin route and someone (glen/vale?) getting it cheap or something but lets hope not.