Member Info for wasarunner

IRR 25.9% NPV USD $643m at nickel $16k/t which is the forecast nickel price at Araguaia construction complete according to the Q1 update. Nice numbers. Should see a shareprice well north of here if it plays out. A very nice cashflow from profits at nickel ~$9k/t above C1 cost of production.

https://horizonteminerals.com/uk/en/araguaia_project/

yes depends if they are running to mid year schedule (7 weeks to mid year). Personally more than happy with a 'delay' if it can be called that to September to complete financing but ideally some snippets well before then?!
Wonder where lock-down matters - UK or Brazil? Likely to be different rules to be in place in the different countries. I wonder if they are able to continue finance discussions uninterrupted without being able to travel - it would appear so from the quarterly update.

"The Annual General Meeting will be held on Thursday 14 May 2020 at 2.30 p.m."

There are but that's the biggest trade I've seen I think since I've been following the company. Timing with respect to the AGM is intriguing... would suggest an II purchase but who knows. It would be great to see some II interest here and possibly from other sources than the existing II's on the register, maybe funds buying in etc. Dirt cheap + the future + Tier 1, maybe some growth funds interested?!

hopefully a TR1 from Teck to follow - now that would really throw the cat among the pigeons.

more likely to be a top up though from a PI seeing greater riches here than in Covid stocks :-)

Realistically we need news - either concrete, or very strong hint, that financing is progressing well to move us into a solid place SP wise in the meantime I don't think it matters whether we are 2p or 4p realistically. Lower sp allows opportunity for patient long term investors to add, higher range allows traders to sell down. Being an investor I prefer 2p until financing is 'done'. If the company need a higher SP to get financing done then realistically they are going to have to start releasing bits of the jigsaw or it is going to struggle to rise just on wider market sentiment. We're not going to see Nickel at $18k/t any time soon I imagine...

On the macro front the most positive thing I am sensing is governments waking up to the green agenda. I am hearing this in at least Germany and UK (though in the UK a lot of this stuff tends to be hot air so pinches of salt needed). If that plays out across much of the developed / developing world it could be a huge catalyst to Nickel and maybe accelerates discussions around Vermelho. EV/clean energy being the topic and surely Nickel has a role to play in power generation/storage also. So on macro car producers taking stock, using this opportunity to reposition for the future, and also the problems with oil (Saudi Arabia trebling VAT rates?) can all help our cause.

Leaving US out of it for the minute (can people tell Elon is frustrated) I noted news on weekend that pollution levels in China right back up again - good for industrial production but not so good for their own environment and nice to see govt there encouraging EV. Lets face it it is the future and countries risk getting left behind if they have backward looking presidents. China first out of the blocks of coronavirus will try to seize the opportunity to get their economy ahead on the curve of US. Of course whether they can export much remains to be seen.

Still very positive here and will try to add, just needs the patience of craigieboy to see this one through....

Thanks PopeUrbanII. I guess the balance here then is the capex is reasonably chunky on Vermelho (if it goes down the Battery route) but if the partner uses debt to part finance then they are really funding it out of future revenues anyway which Horizonte could contribute to. So I guess the equation is more complicated than expected flows less capex.

It will be interesting to see which way it goes. Hopefully a deal with a partner who wants to go battery route for the extra premium such nickel might command in the future. If it was just going to be ferronickel then might as well wait till Araguaia phase 2 complete then start building out of cashflow. But that misses the expected sweet spot of demand for batteries (which is surely coming sooner than later - probably ahead of market expectations even a year ago).

I can't follow all the posts there is too much on here! But just my 2 cents. I invested first from November and on the basis that:
- PGM's were going through the roof price wise
- EUA were marketing the assets and these were 'substantial'
- a deal may or may not happen but the contingency was a base valuation of 12.5p by the broker and the potential to develop MT via Sino deal

As the story rode on the SP rocketed of course (it closed at double my average) with huge buys coming in. The share then suspended pending clarification of a relationship with an investment bank which had already been mentioned on prior RNS' as having a working relationship with EUA.

So am I worried by the present situation? No. I invested KNOWING FULL WELL that a deal in the $100m's or $bns takes potentially months and months of negotiation to thrash out. Of course we all want our cake yesterday but that's just how the game goes. These deals just aren't concluded in minutes particularly in countries with serious political controls over business. Should shareholders be annoyed that their cash is tied up? Not really. In february everybody had a chance to exit, almost certainly with profit, as the MMs couldn't satisfy the fervent buying as it was! And all the news was out for all to see - the company were trying to get a mega deal for one of their assets. There was every chance we would end up in the current situation.

CV came and for my money it is actually best we were suspended at the time. Call it luck or what you want but I think it helps, and not hinders the cause. Parties to the negotiations can take stock of the situation and of course any deal will be hugely forward looking - they will be looking at PGM demand in 5 years time not 5 months time.

So I'm pretty postiive and absolutely nothing to suggest the last 2 RNS' where a. WH IReland are smoothing the handover and b. New Nomad has substantially completed due diligence are not to be believed. I'll wait here 1 year if necessary for the board to get the right deal for assets. Not really a lot else one can do anyway but surely we all knew (even hoped) this was coming?

With respect to the board being more transparent. I don't think they can be. This has NDA's written all over it. Probably at the moment third parties don't want to be identified and as such it is in EUA's interest (and shareholders) that that's how it stays until deal is done.

I had wondered if such a deal might reduce the capex requirement for Araguaia if it can be part funded by cash payment for JV for Vermelho, but I may be being optimistic that a party would pay up front for such a deal. Reduced capex (or part funded capex) would of course increase the net value of the Araguaia project to shareholders.

Does anybody have any ideas how a JV for Vermelho might work for Horizonte from a financial perspective. I've never really factored Vermelho into any serious calculations other than - current value is close to 0 and huge upside. I am wondering:
- if JV, does the senior partner field all capex and opex costs
- Horizonte get 'free carry' on some kind of profit sharing/royalty basis
- in this scenario would Horizonte get any cash payment up front for the deal? Or is it assumed that by funding the capex in full the other party has already paid their buy in?

Advice appreciated and if anybody has any links to similar deals as I am not familiar with this type of thing. Thank you.

Timing wise I guess Vermelho is on hold until a partner can be found. I believe financing the DFS is cost and time that Horizonte don't want to spend right now when they are at such a crucial stage with Araguaia?

Oddly enough I think that might actually help financing. I think Horizonte were exploring credit export agencies (I think both the FD and JM mentioned this on the various calls). Lower cost financing via banks from countries where steel/nickel is a critical infrastructure and need to secure supply. With global trade under threat countries (e.g. Germany?) might well scramble for supply.

One has to add to risk factors here now probably China. It's kind of both a threat and an opportunity. I think there is now some distrust of China in terms of how the pandemic has been handled and possibly countries move to restrict trade (and possibly protect their own economies/protectionist measures). China is by far the biggest steel producer in the world I think and as such would have been a natural market for the Nickel here. However, it also controls a lot of Philippines/Indo production so I wonder if countries start to want to be more self reliant (and possibly produce more steel domestically) they might attempt to secure supply hence maybe an opportunity also.

But if the world turns on China and with China being the biggest Nickel consumer presently that would on the face of it not be great news.

I think it is the next stage. Germany have shown that testing in general is the way to manage the crisis. South Korea likewise. In the UK we probably have a less 'compliant' population (I have travelled in South Korea extensively, less travelled in Germany but they do seem to follow the rules!) so in the UK testing will be even more important.

Antigen testing will remain important but Antibody testing will become more important with time (I don't really want to compare the relative importance I think they will both be very important for some time to come). But the antibody testing will be really important as larger and larger portions of the population inevitably pass through the virus.

I see antibody testing becoming more and more important as larger and larger proportions of population get the antibodies. You start reversing the risk profile to people who have not yet had the virus. And like others have said it can probably also be used in conjunction with a vaccine.

Oh and I'm not excited (like djryan) by day moves up and down people going - look it has gone up 20%. People were buying this in the 3p and 4p range in the last couple of years so to be at 2.x p in the year (and in fact supposedly a couple of months) from finance complete is pretty poor (again not the management's fault but my point is - not really anything to get excited about). Of course if one was trading this they are exciting moves. 1.6p-2.7p is a fair rise. But not really exciting for those looking for progress against the long term plan.

to get us moving. I think sadly in the absence of any news we will drift a bit with sentiment, traders will come and go, we might drift a bit with Nickel prices. Overall the picture for the general economy is pretty dire, and I still expect wider markets to fall. There is a sense that we are building towards some news around agm or beyond but if either no news or news of delays I think further drift.

Personally believe that news is very possible because I can't believe it is all doom and gloom for an industry which is clearly set to boom in a few years time or at most mid decade and where the players / financiers know that they have to place their chips well in advance. But the board have been eerily quiet - I was on the call with JM in Feb (I think) when he last spoke. That was circa 3 months ago. One hopes that progress has happened and comes big bang.

Can't rule out some leakage, not blaming anyone close to Horizonte here but it was odd that the SP rose into the Orion news (albeit Nickel was rising). So I'm also watching for convincing moves north ahead of news.

Personal view is maybe Q3 for complete financing and hopefully start mine build in Q4. That would be about a 3 month delay which is not huge in financial or timeline terms to the company. This is what I am hoping anyway. Anything earlier and happy days.

I wonder if players are watching to see how the current pandemic management measures are working in developed economies (eg. Germany) before they commit to things. If it can be shown that even a few countries can manage this crisis well, and run their economies at a reasonable % of former capacity, maybe we will see more long term project commitments and Horizonte can get the finance sealed.

BOE forecast out. Govt will be under HUGE pressure to get economy moving. Germany already proving testing is the solution (albeit, we will see how successfully that works in weeks/months ahead). Testing, both types (antigen and antibody) will be an absolutely huge factor in not just the restart but keeping the lights on in the economy. As I said in an earlier post I believe this industry sadly is here to stay, it probably won't be a monopoly but plenty of pie for all players. As such I still see ODX as good value at current prices. All IMHO.

all the more furstrating that banks are so slow. I thought bounce back loans were meant to be quick. I need the Horizonte share price not to bounce back before the loan does.....

Earlybird for me Vermelho is the big unknown. All my modelling/planning/investing has been on Araguaia. Vermelho is pure upside and I think we have a crafty MD and board who can make it count, with a bit of luck! The two big big upsides I see to Horizonte are a Nickel boom and Vermelho. But the fact Araguaia more than justifies a decent SP in and of itself (particularly with Phase 2 in play) means only upside from 2.5p, surely!

my targets fwiw 7-7.5p on financing (i.e. the financed price) and 20-25p on production. Araguaia only, ignoring Vermelho. I realise that is probably a pessimistic estimate for some but I'd rather be pleasantly surprised. It is still a 3x upside this year (with a bit of luck) and 10x upside with 24-36 month view. These are targets at relatively modest Ni prices, Nickel well north of $16-18k/t at production and could well be higher IMO.

I think part of the problem here (in the absence of news) is this share does get traded. No idea why really as the spreads are shocking. I can think of almost every other share on the stockmarket I'd rather trade than this one! Come on own up, you know who you are :)

We get a little momentum going then people get bored and sell. Probably something more exciting elsewhere. All of this of course in the absence of news - we get gamechanging news here and not only will it attract 'the masses' but probably institutional buying too.

But that swing traders happy with 10-20% does limit upside potential until we sniff news, is my reading of it. For example now I would expect 2.5 area to be sold if and when we reach it, without news.