Member Info for wasarunner

ng it boils down to the simple adage "markets can stay irrational longer than you can stay solvent". I'd hate to have to rely on this game to make a living, and chapeau to people who try, and succeed - they've more courage than I have in their own abilities to judge the market etc. Even if you call it right, you then have to make a regular income/return which to me just seems incredibly difficult. I trust to make a return over many years timeframe, but not to live on it in the meantime!

ng - so true. Buy side is very hard to get right, my learning experience with Horizonte is when people say 'this is the last chance at x' that ends up not being the case. Drop from 5p to 3.1p I just didn't see coming post Orion. The reason I think the re-rate is looming now is the financing will be company-making/transformational. I positioned late 2018/ early 2019 expecting it to happen mid 19, so by my original estimates will complete a year or more later but no problem - the end game is the same. Buy price doesn't change the long outcome. It matters relatively little if you bought 2p or 4p if you sell at 15p or 30p and can wait the elapsed time. Obviously it matters some, but less. The main thing is finding the right company (Horizonte) vs a company that doesn't make it... here we have going for us: great management (just look at their purchases and the timeframe they have been developing this), great commodity (EV is coming), great jurisdiction and fully permitted. Locked and loaded.....

indeed market pricing is highly chaotic but obviously creates opportunity

Nearly 2 years ago I bought Horizonte at 4.4p. We were:
- 2 years further from production
- had no $25m in the bank
- didn't have final permits
- didn't have $700m NPV araguaia known
- didn't have $1.7bn NPV vermelho known
- didn't know vermelho had battery grade / didn't know how much cobalt etc
- didn't expect finance to close on Araguaia in 2.5-5.5 months time.

Today we have all that and we're at 3.4p and the nickel price is roughly what it was when I bought at 4.4p. So yup the market valuations can be odd to say the least.

I think all you can do as an investor is ascribe your own valuation, trust in your analysis, and believe that with patience the market will see what you see. I don't know that the market will price HZM as 15p this year but I price it as this, nor that the market will price it in 30p-£1.20 in years to come, but I know that on my analysis this is what I value it at and I can afford to be patient...... if one needs to sell by year end (or earlier) that is of course a different situation. Giving maximum time horizon for market to match the calculated valuation (or ideally, overshoot it) is where the return is to be made.

Hi zebbo, I've stated before, I'm pretty content with ending up with my current stake being half the current proportion of Horizonte. On the basis that I expect this company to be worth $1-$2bn in 5-10 years time, my 1% today then being 0.5% is very comfortable - much better than beer money.

There might be quite creative ways of financing phase 1 Araguaia but my calc for financing:

Assuming worst case 20% of phase 1 is straight equity. Assuming worst case raise price is 7p (I can live with) but realistically, is 10p, could even be better than this. Assume this equity is ringfenced - Vermelho is hived off so not diluted.

At 10p raise I figure, royalties aside, I'm left holding 70% of todays equity (around 700m new shares issued). Royalty is slightly dilutive but not quite to the extent of equity as returns can be capped in different ways, based on pricing and so forth.

My 'worst case' calc is less than this (I'm working on worst case 7p raise) but 10p this is probably a median scenario - 70%. Anything like 70% and of course, we are immediately worth much more, and Vermelho throughout is still priced at £0 in it'sown shell. Something as shareholders will benefit from when the structures/JV are setup there.

I'm very confident we will get the finance at last for Phase 1, there is outside chance of getting Phase 2 financed simultaneously (must be possible to cost synergise the build if done at same time). I'm comfortable that 70% is a very achievable outcome, and if we are in a sellers market, the return could even be bigger. Either way, as stated below, very much expecting a re-rate. We are priced as if we are going to dilute 300% - my expectation is we will dilute 30% (if that) to get Araguaia phase 1 up and running....

just a final point to add - if we see any weakness in nickel price in Q1, as has potentially been mooted, and Horizonte is holding on finance news, we might see continued SP weakness for a few more months (possibly even drops from current levels). I'll be adding, I already have some fresh funds earmarked for next couple of months and around April. Anything under 4p for me is a steal and I'm very doubtful we will have this opportunity much longer, and almost certainly not after the next tranche of finance news.

I believe a decent re-rate is coming, for the following reaons. Notwithstanding the markets inability to correctly price an opportunity (from which of course as investors we can profit):

- mcap today £50m +/-.
- Araguaia we expect finance complete H1, but even allowing for slippage on the equity part/market conditions allowing, lets assume complete this year. No indications from the co that this isn't going to happen, so we assume on track
- that means we building a mine in 2020
- by my rough calcs Araguaia Phase 1 returns £67m gross profit at a nickel price $14k/t. (ignores capital payback, royalty, tax etc) (my cals has cost $8k/t)

That is a very generous return from which to repay debt, pay down royalty, and easily, in and of itself, should justify at least 4x markup on current SP (IMHO) on an expected revenue/return basis which conveniently would bring us to 15p, maybe my upper sp target for 2020.

Further upside from:
- higher nickel price at production
- acceleration of phase 2 if funding can be secured
- Vermelho still valued at £0

What fascinates me is the apparent disconnect between opportunity and current price. I expect it to close but what I find particularly strange is the way these expected pieces of news will cause big jumps in valuation. Essentially the market isn't pricing the news we all expect to happen then when it does, it jumps.

I do understand that existing SP factors uncertainty over % of existing share capital retained by existing holders, but for my money, the upside points above far more than outweigh the risk/probably dilution.

We will see but I maintain this is worth (and we will see) 15p this year assuming finance can be closed and we start building. I am most curious when the re-rate begins, logically, it should start ahead of the news...

Lotto and vice versa. And likewise also apologies to the bb.

Been thinking about the equity component of any financing. My view (again, just logic, happy to be corrected as I haven't seen this kind of finance deal before) is that some of the majors, particularly the miners already on board wouldn't, themselves, be too fussed at lowish SP raise if they are confident in the asset. They lose some of their existing investment, effectively (I believe Glencore are in at over 10p) but it matters little if they believe in the asset and end up with a bigger (potentially much bigger) % than currently. They will make their money back and more.

My insurance is the board options. I think the board don't want to let it go at low SP because JM is in for 28m options at 4.8p (at least, many are at 4.8p there are probably other numbers). Naturally the board want to make some money on this and for the work they have put in over the decade(s). So for anybody in under the option price, it has to be a no-lose situation. I believe most PIs, certainly if buying in the last 3 years, will probably be under this average.

Just musings. I hope any equity is above 10p, the equivalent that Orion purchased their Royalty (though how they calculated that is unclear to me, it is most likely an approximation). As I said on another post I'd happily take 50% dilution across the two projects, to include the JV on Vermelho as I still think we are more than quids in here at such a percentage. Just hope the ratio isn't bigger than that.

Lotto, I joined twitter, but I can't dm you.

Westie you hoping for hzm->arcm switch or vice versa? Or not bothered which way as long as it is bags then bags? I dont know enough about eua to move more from horizonte but happy with the 95/5 split...

Lotto no but I read a lot. Read some of yours (or at least with the same handle!) I think.

Anyone else in the same situation: I have a small(ish) position in EUA. 5% of portfolio, purchased in December. My hope was a result there before moving the proceeds to Horizonte - ideally before our debt news lands in Q1. But timing of everything is uncertain. My research on Horizonte is much more thorough but I see it as a steady, long term play. My hope was to slightly leverage my position here by some earlier gains on another share.

Anybody in a similar position with EUA or any other AIM share? See this as a solid long term option but intend to move funds from elsewhere as they become available? I don't know how much longer we have here, hopefully not much longer than months before we're a lot higher than the present SP. Happy to miss the boat with 5% of portfolio but also happy to leverage up if it plays out!

"the number of AIM securities in issue (noting any held as treasury shares) and,
insofar as it is aware, the percentage of AIM securities that is not in public hands
together with the identity and percentage holdings of its significant shareholders.
This information should be updated at least every 6 months and the website should
include the date on which this information was last updated;"

On the Horizonte wesbsite the last updated date is 20th June 19. So slightly past the 6 month date deadline to update.

It will be interesting if the update is provided includes the drop in RG shares, to see what he is left with. So for example, if the share capital was updated as at date today, we would not only know he is below 3% but what the actual number of shares held today is.

I guess the other major holders haven't shifted significantly, as we haven't seen any TR1s in the last 6 months.

http://www.bbc.co.uk/news/technology-51015921

You just know when camera/TV manufacturers start building them, there's a future in EVs...

Just a note - you do need luck in this game. You can do the best research, you can have it 90% nailed on but nobody nobody can call it perfect all the time. Who predicted the Orange One would launch a cruise missile to re-ignite the middle east this week? There are just events you can't control. We all need some luck here, even if we mostly see it de-risked. Good luck all holders, it is what we need some of.

joey in this context I meant somebody who is 'forced' to sell maybe because they see another opportunity. I don't believe RG believes this isn't worth more, but he has spotted another opportunity, it is how IIs work. As others have said, the main IIs here are holding firm. I don't fully understand why they don't buy more (on the open market) rather than waiting for an equity buy in on final finance at much higher price, but I'm not an II.

City Financial was definitely a forced seller. Happily, and somewhat fortunately in my case, I picked up just under half of my holding around the 1.7-1.8p mark so I indirectly benefited from their misfortune. But the SP stagnated at those levels for a good while so for the brave, there was an opportunity. But it ain't easy to buy at the bottom when sentiment is low, the market psychology can pick you up and throw you down! It was easy for me because I was bailing from an even worse position on another share...

Craigieboy - indeed good number on contingency - it is a significant amount. If Horizonte could save it all, it might represent around a year of profit on phase 1 production. It is unlikely they can save it all but hopefully the final build costs less than the $443m max.

I believe the current period is where a lot of savings can be determined. Hopefully the appointed head engineer, essentially having nearly a year lead in to mine build, is looking hard at the plan and identifying how to optimise. Of course, reducing cost everywhere isn't always the way to go with engineering projects but nonetheless if they do it properly, hopefully we come in at the lower end of expectations freeing capital (or debt) for phase 2 and beyond.

For those with cash, it's another opportunity. I benefited greatly from the City Financial forced seller. Way to make money in this game is to be a buyer when there's a forced seller and to never become a forced seller ones self! Unfortunately I've no more funds but this is a further gift, IMHO... as before, I'm all for a low SP around April 6th. After that, lets set the sky as the limit...

Westie, for me, Orion invested $25m so they could be at the table for the discussions around the big pie. I think $25m is chump change to them. It's a downpayment to say 'if you pick us, we'll front you this money, then lets talk seriously about how we get these two mines up and running'. Almost certainly, and JM has more than hinted at it in his interviews, they are going to be involved in a big way with the rest of the financing, and potentially with Vermelho too (he didn't say this, but this follows). So the significance of the payment of $25m was far more than the payment itself. What continues to baffle me, to some extent, is that Horizonte couldn't hold onto the SP gain made at the time (at least the 5p level, if not the 7p level). Sure - a bit of drift on nickel prices down from $18k->$14k, maybe explains some of it, but other than that it is just market impatience. It's not like they didn't announce another $1.7bn NAV PFS on Vermelho in the middle of that period!

Good things are coming, and I can only explain the irrationality of the market (especially AIM) as impatience. I suffer from it too at times but I'm determined to see this one out as all my research, particularly in the mining field, is that you have to be in for the long game for the big return. And we are all here for the big return.

Westie, if the only development is that we have finance for Araguaia done and dusted, I'd take it (by end of year). Finance has to mean a re-rate -> it's the only significant event, since I've been invested in Horizonte, which has moved the shareprice up significantly was the Orion announcement. Completion of financing -> we have to move up. If we can't complete financing in 2020 something is slightly wrong - the process started at the end of 2018. Market conditions might be tough but it should complete in that timeframe otherwise the opportunity cost of not being able to be in build phase for the eventual higher nickel prices is costing us money! So I expect it to complete, and probably the board will explore all options to get it done.