Member Info for wasarunner

Luke - if I'd sold my company for $bn I could have done my bit to prop up an ailing Horizonte sp to be fair :-) Beer money for these guys!

On the current sp movements I'm pretty confident nothing goes up in a straight line but if we've shaken the background seller, it should be pretty easy to clear the profit takers at every level as we move into the autumn/winter newsflow if nickel is supportive. Looks really like it wants to have a go at the £15k/t area.

If we announce a next big 'customer' (could be Orion? could be Glencore?) it will be a huge signal IMO. Once you've got debt in principle, and you've got a confirmed customer (or two) for the product (via offtake/royalty whatever), closing the equity should be a piece of p**s. All IMO.

Thanks Luke, that's the one.
Lets hope he can sell this one for over a billion dollars. Or hopefully he learned from the experience and gets 2 billion here.

I just realised I think you mean 10 figure (USD). $1bn+!

I agree Stage 1 producing is ideal. Cash coming in, no pressure to sell and with every month that rolls on, Horizonte is closer to being able to finance Stage 2 from cashflow. Absolutely no pressure to sell so the buyer has to come paying premium.

Buyers (especially those already with stakes in the company) already know that so will probably make their move earlier IMO. It wouldn't surprise me at all if they come in when the mine has been run in and we are literally just about to start proper commercial production - i.e. working mine but not yet delivering revenue to Horizonte. That's a 2.5 year wait (ish), very worthwhile for that 9 figure (USD) sum.

It's my dream scenario TDT (would rather slightly less pie in 3 years time all in one shot than more pie over a 20 year timeframe) and it was my 'Scenario a' investment case when I properly researched here and built out my stake.

A key requirement for the 'Scenario a' was to see what happened with Vermelho during Araguaia financing. If nothing, then that confirms IMO what the BOD is trying to do. I said many months ago if Vermelho is 'unencumbered' through the Araguaia financing it is game on to set this company up for sale into the next nickel cycle.

There are probably other ways it could sell even if Vermelho had a partner early doors, but I'm not that savvy on the complexity of such T/O deals so don't really understand it. I guess the challenge with Vermelho now is to spend enough on it, to position it in 'prime' position for sale fully permitted, for which they might want a bit more spare cash (Orion anyone?) but probably doesn't need a huge spend now. Vale did spend $200m the data has to be pretty good!

TDT & Flavour,

Another thing worth considering is how astute a BOD is in business deals (buy side & sell side). I don't know if our BOD have any sale side experience (I think one of the directors sold his company but not sure which?) but they have played absolute _blinders_ on the buy side. If they also prove they can land an attractive finance package we know they are shrewd businessmen(& woman!). That counts for a lot when it comes to selling and is probably more important IMO, as we head into this next nickel bull run for investors in this company, than their 'mining' acumen.

I always said I believed Araguaia is being developed to ensure Horizonte hold the cards in the sale. Vermelho being the golden carrot buyers will be queueing up for. GLA

"potentially providing a further high-grade feed source for the Araguaia project"

So initial indications are they might ship the ore. From memory I don't think Serra Tapa has quite the Araguaia first 10 year grades so it may well be that it is just added as 'inventory' for a sale and never really gets developed by the time Horizonte gets sold. You also have to add transport costs if it isn't processed in situ. Still - another significant resource to add to the sale value when they multiply contained nickel to find the buy price. All just IMO.

Also I don't ever factor Serra Tapa because I don't know if the plan is to build a mine there eventually? Or just ship the ore to one or other plants at Araguaia / Vermelho. Anybody got any info on that? Of course the calcs all get rather good once we have 3 mines running if that is indeed possible.

The way I get to £1 is:
2bn shares
P/E 5x
you need a £2bn mcap
you need £400m earnings

Is that possible? Yes. It's around £8k/t profit (after tax), which is just about possible but probably needs a very strong nickel price (to allow for taxes etc).

I don't really think about £1 because we'll be long not indepdent well before then... 30p target will do me just fine!

Flavour - with Araguaia P1+P2 and Vermelho P1+P2 yes. Otherise, unlikely.

Possible in due course but IMO 2025+. Still, worth waiting for. What's £1 multiplied by 23m shares? Must get my calculator...

Assuming P/E of 5x (is that typical for miners in steady state?) 50p SP from Araguaia alone. (ignoring dilution)

Then lets crank nickel to $25k/t and rerun the numbers :) By second half of the decade.

With no dilution and nickel around $18k/t:

Assume $10k/t is profit
Assume GBP/USD 1.3
Assume Brazilian Corp Tax 34%
Assume Araguaia is producing 29kt/yr

I make EPS ~10p in that scenario.

Now we have to factor in at least:
- capex payback in early years
- dilution
but we add:
- better early year grades
- better NAV from Real/USD devaluation

and it becomes a printing machine. How much dividend? Lots! At a minimum my average (around 3.25p) should be very very doable in time.

In steady state unless Horizonte plans on expanding (buying more ground, prospecting/exploring etc) there isn't too much reason not to distribute a lot of the income. It will be a cash cow in due course.

All of the above doesn't include Vermelho of course.

but not to remove the more general concern on investing in AIM on dilution at various stages and is very real. Just I feel that risk (of significant dilution) here is minimal now. Hence I felt confident to take a very big position and I know others have done likewise. It is probably the main reason (BOD and asset asside) that I would venture what I've ventured here. I was happy with a 100% raise when I first invested and now I believe it will be a lot less. How much less - we probably only have a couple more months till we find out.

pickedpeck great post - I've become much more relaxed about dilution (in fact, originally at the time Orion invested) would end well within what I was comfortable here for a long term play and the recent RNS on the debt side reinforced the numbers. 3bn worst case - agreed (and I could have lived with - long term still 20p very possible with such dilution), much more likely we will be under 2.5bn and there is an outside chance there will be very very little dilution at all.

Every way you spin the numbers from those total shares in issue, assuming a favourable nickel price at production and beyond, and we win big. GLA

"Jeremy said I think you’ll see an exciting mix of equity partners."

That's exactly how I'd describe this lot. We're all equity partners here :)
4.5 Everton1965
4.7 AnimalSpirit
4.8 600Thieves
4.9 wasarunner
5.2 Rover62
5.5 chrismar
5.8 UncleJohn
5.9 owlo
6.0 ngnInv
6.1 Harkin100
6.4 Gower7465
6.5 Mazza86
6.9 pickedpeck
7.1 D220
7.5 Shellbay
7.8 backinblak
8 Thechukkers
8.2 craigieboy1
8.8 Bungle99
9.5 Nthoftheriver
10 Harry_Ore
10.7 Caledonite
11 Flavourshaker
11.5 Finleyboy01
12.2 LUKE1444
12.8 ihowells
12.9 Scotsknight
13.3 Qualia
14.26 fulmar29
15 djryan777
16 westie50
16.5 Worzel7
17.5 silkworm
21 SeanT1967
23.1 DickDabout
25 FiremanSam1968
32 Ivornomoney
40 Luke2

Another thing that often isn't mentioned here is the prudent financial approach the BOD have to preserving cash flow. I haven't been invested during most of the 'lean' development times but from what I have seen the money has been very well managed and the BOD take relatively modest remuneration for what we have here. All relative of course but I've seen a lot more profligate spending on other AIM companies!

And make no mistake for a junior explorer cash is king. Otherwise you're over a barrel. The Orion deal was the last good bit of financial management - secure enough finance so you hold all the cards in the main finance package negotiation with risk-off on time pressure before you run out of cash. A most excellent move.

so usual caveats - spread your risk yadda yadda. I don't practice what I preach I'm about 97% HZM at the moment. But that also represents my confidence level with this company so it is weighted about right.

Brisk if you're new to the game just one bit of advice - don't get 'too' encouraged by a first success. I've got a mate who started buying around the turn of the year and seems to be blessed to just buy winners - EUA, ODX, now HZM. Keep telling him eventually he'll come across a loser! There must be a thing in trading called beginners luck.

Only saying that because HZM is as given a win as you'll get in the game. Other companies may not be so. Speaking from experience here :)

Per dj, looks possible? We've got plenty of buying interest. Nickel supportive. And we're past 'mid Q3' (even a month earlier than what I thought was mid Q3). Looking good.

dunno - he's been involved since 2006 as a director I see:
https://beta.companieshouse.gov.uk/company/05676866/officers

That's a good old stint, when we start building the mine it will be around 15 years. Getting an explorer to mining stage is a big old undertaking and these are significant milestones he's ticking off. First rate BOD here.

I can't see him mining it for 10+ years personally but I've never met him personally. I think their job is to get best value here. That will be possible in a couple of years I think.