Member Info for wasarunner

Wrt to appointment of Barclays - I always assumed this might be for Vermelho? I don't know how early you would need a broker engaged if you were negotiating but we were told there was already a data room and interest so perhaps this is already ongoing. Lets say they drop the DFS Q2 2024 (which is now 7mth+ from today) could they already be in a position to seal a deal having negotiated it and get building? I think financing Vermelho is a much more complex beast than Araguaia2 potentially and I saw the Barclays appointment as perhaps for this or in case a bid for the whole company was likely to land in the next 6-12 months or so (which by many of the comments on here is when people expect it to land if it lands at all).

If the BOD are acting in all shareholders interests (and not just the principals who would in this scenario most likely provide the equity portion - La Mancha and Orion) then they should wait+6mths for equity finance until Line 1 is producing something because our shareprice would be higher and you would get a higher price for equity. La Mancha and Orion score double from an early raise because they get Line 2 built quicker AND get to buy cheaper shares.

It's a tricky one. There is a counterargument for stalling line 2 development until cashflow is better which is the longer you sit at this valuation/shareprice and with Line 2 financed the longer we are a sitting duck for a cheaper T/O. With Line 2 financed and building I think a buyer will have to pay a lot more.

As long as dilution is for Line 2 finance (and not for Line 1 cost overrun) I think I could live with it. I'm trying to hold all my shares to LIne 2 production so the sooner that happens the less long I have to hold my shares for. I guess others will be thinking similarly. Again by my rough calcs hopefully a worst case equity dilution to fund A2 still gets us circa £4/sh with both lines producing - if they started the build in 2024 then that should be achievable by beginning of 2026 or so.

Interesting, by extension you are calling you call Urbix and Posco tin pot players. Posco are big, possibly the biggedt ex China.

https://en.wikipedia.org/wiki/POSCO

The stuff about it being run on a shoestring is all true however. Probably one of the reasons it is cheap, but it is also a prudent strategy. When I still owned my business I ran it like acp - lean no frills. Leave the chedt beating to other companies it doesn't guarantee success.

My contra contra (contra^2) algo, which tracks the number of green boxes on this lse page, is indicating HZM is 'STRONG BUY' and due for imminent breakout... just a bugger I've got no cash to buy it with. Must be all tied up in - Horizonte.

While the shareprice is in the doldrums. Until Horizonte announce otherwise, it is on plan and on budget and this is what we've got coming up:

End of Q3 (1 month from now): many construction items complete. Namely (from the August presentation, which is unlikely to be out of date): Manufacturing, Water Dam, Civil Works, 230kv Power LIne, 230kv Main Substation, Resettlement.

Q4 (1-4 months): Araguaia 2 DFS is published. With or without financing plan.

End of Q4 (4 months from now): Construction is complete: Environment, Construction, EM Erection, Water Pipeline.

So a roughly 2 year build window draws to a close in the next 1-4 months and in parallel we get a plan, with detailed numbers, for the next stage of mine development (Araguaia 2).

Lots to be positive about and all this in a relatively short timeframe now. GLA

Ok thanks tafour I skimmed it really. I suspect they targeted 3Q then for whatever reason (hopefully a good one) it moved back to Q4. Q4 is when I'm expecting it now anyway. Perplexed a bit by the current sp have to assume it's China worries. volume still very light. I guess institutions ramp up back after the summer now as we enter September.

Page 10 from the July presentation 'Key Araguaia Line 1 Statistics' has been removed. Maybe it is not accurate as the assumptions on this page did state it was per the November 2018 Technical Report which is likely to be dated.

Other than that significant shareholders has been updated and the share price graph with more recent data.

Didn't spot anything else but didn't do a page by page comparison.

I posted a while back (before the August update) that the Operational updates of various types (pictoral update, detailed quarterly progress reports etc) seemed to be landing every 2 months and the early August update actually fell nicely into that pattern.

If the pattern continues we should hear something in October, which will be interesting because on the high level gantt chart a lot of construction activities are scheduled to complete in Q3 hence by the end of September. It could be a very interesting update indeed.

>>What I read about China does concern me as does US debt (sov / company / individual).

Personally also believe UK is in extra big trouble but I'm not sure that affects Horizonte anymore (as the commodity is priced in dollars and driven by international demand US/China) but the exchange rate of course if you have to raise in GBP through equity is a factor. So pound weakening I haven't figured out how that affects Horizonte, in theory though it should raise our SP in pounds....

Tony what you say is true and global macro does concern me - the bigger worry for Horizonte IMO is that if the SP stays low relative to eventual NAV/NPV (because of macro, not because of Horizonte), it makes it both easier and cheaper for a major to launch the bid. It's a bit like the tide going out and Horizonte (little fish) being left in a rockpool with a bigger fish (say Glencore). It ends less well for the little fish! In that sense the current shareprice worries me because we're a sitting duck at this price, this close to production.

So essentially the game becomes to try and last till the next 'boom' so our value can be realised whether by production & divis or a bid which values the company on the same. In that sense macro headwinds for the next 1-2 years would be bad news for Horizonte (that and trying to finance expansion from cashflow which is of course harder if the price of the commodity is lower). What I read about China does concern me as does US debt (sov / company / individual).

Which is way too low at production. So currently 'the market' is pricing:

- we don't get to production smoothly (engineering problem)

- we need a further raise

- nickel price collapses by production

...as we have a guaranteed buyer of the product at production.

I think 'the market' is wrong, so I bought more. But it could be me that's wrong, I have been wrong before. GLA

AIM All Share at 7 year low on Friday. Horizonte at the (initial) placing price, +50% on second placing price. I'm not panicking yet :)

Macro will pass unless the world ends and if the world ends it doesn't matter what you imvested in imho....

Yes well breaking 160p turned out to be not convincing! I'm sure this is macro though so roll on the mine build and macro will sort itself in due course. And it it stays this low we can always add more!

I have no idea on total capex btw but maybe $250-300m might be a ballpark. I know we have procured some nearly free equipment and some of the infrastructure big cost had to be laid for the whole mine so won't be repeated at A2 stage but it is still probably a chunky overall spend.

You would think so but say - $50m banks $50m Orion+La Mancha would see you through 2024 build of A2 (given that a lot of capex would be in 2025). The question becomes at what point the banks are prepared to release $50m. Then consider that that's 2.5kt of nickel. Depending on how the ramp up goes we could easily have produced that amount by end Q2 and more. With the rest of funding A2 contingent on A1 reaching nameplate.

You gain maybe 6 months+ from such an approach but time is of the essence. I realised I got the year wrong on production that could potentially pull first metal forward to, end of 2025 (or even nameplate production) for A2. A lot of the infrastructure, power etc are already in place when we started building A1 there was zero. It should be a shorter build (and then commissioning).

I have no experience of such financing arrangements but it would seem to me that you could get A2 financed contingent on how A1 is ramping up to get a jump on getting A2 built resulting in earlier production. The added benefit to current shareholders is an immediate bump to mcap and further protection from lowball bid because when A2 is in effect financed a buyer will have to pay proper money for it. All IMHO...

I'm quite excited about A2 for this reason: pushing DFS publication back to end of year could mean Horizonte are already in talks with the banks and the principal shareholders (Orion / La Mancha) about financing it. Why? Because it is in their principal shareholders interests to get this accelerated as soon after A1 as practical.

So what would the banks want to rollover the debt or to free up more capital? Probably to achieve a stated milestone of cashflow for example 'cashflow breakeven' but Horizonte can probably achieve that somewhere between 30%-50% nameplate production capacity. This could be achieved, with a trailing wind, by Q2 2024 potentially.

So there is a chance that we have some conditional finance agreed for A2 which is still conditional on A1 ramp up but kicks in soon after. How soon could A2 be built? Well the team/contractors et al are all there, the groundworks were probably mostly done for the shared infrastructure for A1 anyway so this could look like a 1-1.5 year project to production from start of build - I would hazard a guess that A2 could be producing some nickel or possibly even at nameplate by the end of 2026 at the earliest.

The point here is - this announcement could land this year, in the next 3 months. Literally none of that is priced into the current sp.

Yes it's disappointing to see the price retreat with the macro headwinds but bigger picture I still think A2 will be a massive catalyst (with or without finance package announced) then obviously the Vermelho DFS when it lands which should be a good one mid next year. Mid next year is now only a bit over 3 quarters away. I think the market is missing a trick here (as it often does). GLA

It interested me to see if after the Convertibles Orion/La Mancha hold significantly more of the co%, perhaps as a guard against Glencore taking it on the heap. Here are the numbers assuming a fully diluted 325.5m (convertables and options all convert):

Todays holdings (from current significant_shareholders page on Horizonte website):

La Mancha: 23.18%

Orion: 10.53%

Glencore: 17.81

La Mancha + Orion = 33.71%

After conversion (assumptions: GBPUSD 1.28, conversion price 1.268p / sh, $15m / $50m converted loan respectively):

La Mancha: 22.0%

Orion: 18.2%

Glencore: 14.7%

La Mancha + Orion = 40.2%

Interesting things about this - Orion and La Mancha don't have enough to block a bid (I think). I actually had this the wrong way around because La Mancha only have $15m convertible their holding _drops_ as a % of co on conversion. Which is interesting of itself because it does mean La Mancha _could_ buy more shares either open market, or, participate in further raise for later stages of build (watch this space I guess on A2?)

Either way it is going to be a very interesting corporate shareholder structure for the fun and games ahead. Between them fully diluted Orion+La Mancha+Glen will own 54.9% by my calcs, which would make a lowball third party bid by a.n.other (like Vale?) unlikely to succeed IMO.

This is more likely to be a thing next year, admittedly, but a good reason not to speculate on whether the SP will fall (and therefore, try to trade it). For me, more of a factor after the Vermelho DFS is published but: Vermelho DFS gets published we have a multi billion dollar NPV project sitting there saying 'come get me'. We know the company have already had talks with potential partners and there is already a 'data room' for the information on Vermelho. Everything will be done under tight NDA and the first moment we would find out there is a JV in the offing (or a full T/O) is the 7am RNS. The night before you might have sold a few speculating that you can gain 5-10-15p on a drop in the weeks ahead and suddenly the SP will be +50% (certainly the kind of partner who will come for Vemelho will warrant that kind of rise IMO).

So it's better to stay invested but as I said the caveat is I think this becomes much much more likely once the Vermelho DFS is published. But a leftfield T/O offer for the lot can land any morning at 7am. I'm staying put. GLA

>>Glencore sp was 430p when Russia invaded Ukraine.

sorry yes Covid it was - around Mar 20.

O/T Biggest macro headwind which has always worried me, continues to worry me, and will never really go away is basically total debt (gov + individual + business) across the west specifically but now also in China. How does it get unwound particularly as productivity isn't increasing fast enough to cover the growing debt. The big financial crash scenario that's bigger than 2008 etc.etc. It may happen one day and no company will be immune from it not Horizonte but unless you keep gold bars under your mattress it is hard to be completely defensive against the ultimate doomsday scenarios IMO so you're better invested.

Inflation kind of helps in a way and I did assume the debt would be inflated away. In which case it is best to be invested in something with physical value (property, gold, nickel producing cash) because fiat currency won't be worth what it is today. We're definitely seeing a lot of inflation at the moment so the question is when does that normalise....