If you have any questions for our guest speakers (Greatland Gold, Helium One and Poolbeg Pharma), please submit here.
pp excellent post (as always). On two weaknesses I believe we will have closure and then further developments rapidly,
Equity dilution unknown.
Lack of new institutional investors.
Equity will close (October/November?) So a 2 month wait to remove this from weaknesses.
In the next round I feel we WILL have further insti interest, probably big players (Tier 1 keeps getting mentioned all the time). And thereafter further interest 3-6 month view.
If I was Horizonte BOD wanting to close this deal 100% for all components of financing would I be doing random placing to market, selling some to weak hand PIs or would I be trying to place the remaining equity which isn't going to the strategic investor with top draw institutions who will then add further for their own book or for clients? I would imagine the latter, particularly as the price and size can be 100% guaranteed. So I think new insti's are nailed on in this financing round. Unless the cornerstone takes it all, which is not out of the question.
MiningInvest - if you're new to investing generally but know the domain. I would say it becomes a hell of a lot easier once you are in clean profit and unlikely to retrace to being 'underwater'. For e.g. on my investment in Horizonte on a daily basis it might swing from +250% up to +300% up and back again. That's easy to sleep on, much easier than +20% up to -20% down.
You want the low watermark to move higher than your average price. I do believe that is coming when financing gets signed off. Of course, if you continue to invest in the months ahead in the stock, you will continue to buy higher as the average price moves up so so does your average. But once a decent tranche of your investment is, and for the foreseeable future remains, 'in the money' it's a much easier game.
I don't mind buying 9p because most of mine are 3p. I can tolerate -30% drop on the ones I bought at 9p because I'm still 100% up ont he ones I bought at 3p etc. And over the years that's the direction this is moving. IMO.
Hi Totdy - I watch 'Gold Divers' and 'Gold Rush' so on a slightly more industrial scale, I believe it is the final stage of processing, whatever concentrate you have depending on the nature of your mining, the bit that separates out the gold from the other heavies. In this case because of the processing route that might be carbon bound not sure.
It's the how to get from this dense stuff containing a bunch of gold to -> just gold or close to just gold.
In the case of GRL I do believe Elution Process = Gold Room. Please correct me somebody if I'm wrong.
Somebody misses out here. Orion can do offtake, they have done it on other deals (and they already have their royalty) but can I see Orion getting the rump of the offtake if it is a single offtake deal? I think more likely Glencore. For the strategic investor, I still fancy a miner, so again, to me Orion isn't pole position for that. They may end up with nothing. I hope they put their hat in the ring though and pushed the prices up for the others. If the miners are respectively both the offtake and equity, I think we will get a good deal. They understand the space and they understand what's coming and how to price it. Teck were (rumoured to be) buying a producing mine in Brazil for $1bn USD with lesser credentials than Araguaia.
Apologies if this got mentioned before but on the BR interview (exerpt here):
Jeremy Martin mentions offtake 'with a leading industry player' - so it sounds like a single offtake deal? Someone prepared to take the lot? Has to be Glencore - surely? That's my money anyway. Doesn't rule them out from being the strategic investor of course but perhaps makes it more likely that is Teck then essentially agreeing the split of how to share the spoils here.
That's the problem short term nobody can call it short term (chartists maybe, traders maybe better than some) I never have been able to. I do believe we are well below where the next equity will happen. Long term cheap as chips. NPV at 2025 nickel is $7bn and the co has mcap £130m (today). Some/much of that gap will close, but not all in a straight line, and in years not weeks! I do expect the news maybe late this month early next month to put us firmly on the radar of many investors - that being the announcement of the 'who' is the strategic investor.
Hi Mininginvest, did you invest? When and at what price? I'm just curious because you either did, and are genuinely concerned by the drop (which is very possible), or I sense maybe your 4 posts or so to date you are on a perhaps subtle de-ramp? Nobody knows when it goes 10p+ but of course, the likelihood always was, we need full finance package for that to happen. Horizonte only delivered 2/3 of the finance package (but a very good 2/3 that was) the other week.
If your concern is genuine I wouldn't worry. Many of us have seen 1.7p and are pretty comfortable where this is going long term. Any entry sub 10p will be in money in years to come. And short term everything is always a gamble (hence why I never buy short term). Good luck.
Just to clarify - we are well below any level the strategic investor can take a strategic stake by any calculation I can make, SP wise, based on any realistic assumptions about how much equity they take, what price, and who else takes equity. Irrespective of the entity in question - Teck, Orion, Glencore, anybody else. And I don't think anyone else will get placed cheaper than the strategic investor. So in other words, we are in bargain basement territory. Happy days. Oh to have some more $ to buy with. Weeks (or days?) ahead of news and sellers heading for the doors, who would have thought it. Happy to take their shares all day long.
Burleigh, your approach sounds very reasonable, I believe it is called averaging up on de-risk and news. I think experienced investors do this, I have tended to average down - I accept I am a relatively inexperienced investor albeit I have learnt a lot on the Horizonte journey. I am getting better - for e.g. I think 8p is good value right now with what we know, where previously I thought 4p was good value. You get less shares now but you obviously have less risk, as the journey inbetween down to the 1.7p levels evidenced. When the full financing terms here are known many/most on this board (me included) think there will be a rerate up. It will of course still be a good investment then as it will be execution risk only from that point onwards and still not rated at production values or 2024 nickel prices. Good luck building your position.
224 buy transactions on HZM for me, I just totted it up. Someone collecting fees and stamp duty has done well from those trades!
My first trade (I think) was 11/04/2018 'dipped my toe' for 35335 shares at a total consideration of £1,412. From small acorns do large positions grow as one becomes more confident in the company and fully researches the proposition.
pp obviously I was using 'half' as a proxy for 'another tranche' :) I wish I could keep adding HZM shares ^2 (to the power of 2 in case that doesn't post correctly) but sadly two things conspired against me - my income decreased over last 3 years and the Horizonte shareprice increased (neither happened in a straight line).
At the moment its a slow mo race between does our business sale complete before the next Horizonte RNS. Agonising. I wouldn't hesitate to buy at current prices, personally, complete nonsense drop given the terms of the CA and I anticipate more sophisticated investors than us lowly PIs to be quietly loading up from weak hands sellers. As Bwana points out, it is what they should be doing - they won't get much at the finance stage - not enough to go around once you factor the SI and any offtake.
Burleigh - I've been adding another half of my position regularly since 2018. I've forgotten how many 'halves' I now have but its a lot more than I set out to buy! Good luck. There's always a third half somewhere to be added.
They are complacent, that was evident from the (tragic) mine collapse. I don't know if they are psuedo national in any form but some of the really big miners smack to me of complacency - for e.g. Teck being one of them. You have to change approach once every 30 years or so - fine, miners have to make big investments and measure results in decades, not years, but how did all these big boys not see the 2020s coming when we were in the 2010s. When was the first Tesla built and what battery did it run on? Wasn't the writing on the wall?
I hope our strategic partner is a 'nimble but large' player. If they exist. GLA
sounds good. Apologies if already posted.
Thanks RosyLee as ever, valuable insights into the financing side. I echo Bwana's sentiment please keep posting even if you don't invest here, this is clearly a complex deal (financially) and the devil will of course be in the detail - having someone who can shed some light into the inner workings is very useful indeed! We should find out soon enough the terms of the full deal.
RosyLee thank you, very useful to know. I am guessing the banks get further reassurance that they won't need to reposess if the partner is a miner (for e.g. Teck or Glencore) with proven capability who then take 30% of the equity? They have a kind of ready made plan b. If Horizonte mgt fail to deliver the working mine. A shareholder with deep pockets and ability to finish the job.
It's not unique to ACP, it's all juniors (at least the one I'm invested in) at the moment. Sell the anticipation of news, then sell the news. Horizonte announced $340m debt facility (lets put that into context - nearly 10x Armadale's capex) last week at Lib+1.8%-Lib+4.75% so an effective commercial loan interest rate around 3.5%. £340m at 3.5%. What did the SP do? Why tank by 10% of course....
sometimes you just gotta take it on the chin in the short term, know you're right long term, and wait for the market to catch up to your thinking...
When I mentioned two reasons the banks might lend at what I believe to be fantastic terms:
- excellent project economics
- very good BOD who can deliver
I did of course forget possibly the final and most important point:
- they can see one or more, super solid counterparties to the financing
I don't care how good the project is or how good the Horizonte BOD is, they simply would not be able to get LIB+4.25% on those credentials alone. So now we know the banks really like the other people at the table, and we are told by people who understand this far better than I do that the equity will carry the overrun risk (cue the strategic investor). This tells us that the strategic investor is a BIG player, and that the banks are very happy that they can fund the overrun. We also know that JM has mentioned Tier 1 counterparties on calls and to investors. I am very comfortable knowing the banks would only lend at these rates if the other entity is big (dare I say it, among the biggest) in the business. GLA