Member Info for wasarunner

always amuses me a de-ramp with no substance and no reasoned argument. You have to ask yourself are they trying to save you your money? What's in it for them? I'm really happy to hear about a risk to an investment and downside. What is the % probability of a bad outcome and what is the result both short term and long term. That's what we should all be debating and here people can have contrarian views and that's valid. But if somebody is all -ve on a share -> presumably they aren't invested (why would you invest in a share you are very pessimistic about). But they're on the board letting you know why not to invest your cash - they either have an axe to grind with a director or why? They short? They want to buy in lower? They think they can influence the SP of a £150m+ mcap company? They think they can help you lose money and they get off on that?

We've got such a character on the hzm board. Literally the company are pouring concrete, erecting girders, building roads, fully funded, massive payback when it completes, and letting us know how well it is going. Yet every 5% pullback old mate appears to tell us what a terrible mistake we're all making. And for some reason they hang around for years probably only disappearing when the share has 10 bagged. You have to wonder to yourself - why?

Don't normally comment on it but we've definitely got one here who I'm about to filter. Let the BOD do the talking and the walking and we'll see where this goes.

I'm watching the transaction volume and the transaction volume and resulting share price movement is much to my liking!

I've taken (for me) a decent position, it is my 4th largest holding with 500k+ shares. Within 12 months of production, I take the NPV multiples on AIM stocks with a slight pinch of salt so half the expected NAV will do me - £1.50+. I consider 5x on a 3yr view very worthwhile investment. Risks I see here:
- Ghana govt playing silly buggers - hopefully this risk eliminates this year (but is probably why institutions won't be buying yet)
- Lithium pricing, who knows
- Mine execution looks reasonably straightforward. I was very impressed with the COO on the call.
- There's always some financing/cost overrun risk but hopefully minimal as the capex is relatively modest compared to the payback

Other than that looks a solid 5x+ possibility here. And 3 years for me is not too long - always assuming you don't get full NAV valuation until a period of production is under your belt.

The director buys are a good sign. They aren't everything, I've been invested in companies where directors had a stake and they didn't go on to do that well but here they clearly think the price is a bargain as these _were not_ token buys. If the directors believe in the NPV and how we get there these are, in due course, multi million £ returns for them. It is always good for the directors to have skin in the game and it is different if they put their own money in, and it isn't options granted as part of their role.

That said I still think the biggest de-risking factors to come are the ML and the DFS. Many institutions simply won't invest a single cent until they see the final engineering plan and full permits in place. I still think this is when a proper rerate will happen. I don't fully understand the permitting process in this instance it does sound like it has multiple stages with the final stage being later this year. That ties in well with start of construction but I would expect then the start of construction to be the rerate as only execution risk remains assuming full finance is on board (which is normally the case at start of mine build). Looking at the pricing and NPV I see 2x-3x possible at that point (still <50% NPV). You aren't going to get a full valuation when there is still risk but that is a reasonable % of NPV. Always supposing the lithium price is supportive.

The directors know this and must be pretty confident in the licencing process. The DFS they have full control over and you know now that if they're buying -> that's going to look good. GLA

Liked it so much I added £20k this morning. GLA

Again, just my 2 pence but I can see 2x-3x by the end of this year just based on the following factors alone:
- the recent bear attack trashing the SP
- institutions buying in when only execution risk remains after full permitting is in place
- improved economics published in the DFS
That kind of multiple is very worth investing with a several year wait but I feel we might see it this year. Will macro be supportive? I guess lithium looks positive if volatile but there are other financial worries in the world right now which might affect markets generally. Of course anyone waiting till production can probably ignore most of that as the mine is (mostly) financed. GLA

Thought the webinar was very good. Disclaimer I'm quite new to the company so a lot of this might be old news but for me the standout points:

- CFO thought DRG may stop selling above 3% (i.e. retain a holding and not sell out completely). With the other major institutional shareholder adding (did she mention they can add 3% every 6 months?) that's a positive. IMHO the shareholder register needs to institutionalise and when this happens we will see the kind of rerate we saw on HZM. When does that happen? Well, they don't like risk. So a lot won't invest before licence and permitting and also sight of the DFS. That to me suggests there is a very big rerate possible here at the point that those elements come together at which point a lot of PIs will possibly sell up too and you see the rotation we have seen elsewhere.

- Confirms first production Q1 2025 possibly earlier with the modular plant. This is key for me because I have finite time horizon and even allowing for slippage (just my figure, I can cope with +/- 6 months) that is not so long. We should have another big re-rate at production of course.

Will be interesting to see where the rest of the offtake gets signed to and on what terms, assume they will get that in the bag by / before the end of this year (I didn't pick up the timescale on that piece). I also like the fact the drilling is underway and the expanded resource will be incorporated into the DFS.

Sounded very confident on the near term timecales (ML, DFS etc). Exciting to be invested and lots to look forward to. GLA

At the moment there are 2 positives - gold price is high (c. $2k/oz as I type this) and they have cash (unless they have squandered £2.4m in 3 months). Everything else is conjecture in the absence of comms from the company which have been poor. "Further drill results.... Akrokeri Mine expected in early Q1 2023". Early Q1 my ****, indeed, next week it's Q2. GLA

>>At 60kg of Ni per vehicle, 36,000 tons of refined and processed Nickel a year for Ford in Europe alone.
I know a place they can get 24,000 tonnes a year from....

Thanks GaiaisKidney, really like the breakdown of the numbers. You're calling it 10x+ (from current level appreciate the sp has been higher) with a possible 5% yield at that sp therefore a 50% yield from current SP. Very tasty indeed and hence very worth taking a position! I bought a tad under 500k shares including last week - I found no problem buying (I believe there is a fund selling down?) at around average 27.xp. Pretty happy with that and roll on the mining licence and DFS. GLA

I would think the DFS would help with that too? The DFS will have to make an assumption on pricing to be bankable. It will be interesting to see what it is, and also the mine economics generally. Commodity prices are notoriously fickle so it is difficult to make even an educated guess 1.5 years from production but the consensus of people investing in lithium will be like the other EV minerals we'll need more, not less, in the future and with more demand should come higher price.

Strummer - Cannacord have 12.7m shares - 25x what I own and probably a bigger factor than for most PIs. All I'm pointing out is that what they decide to do will affect the shareprice by a lot more than what you or I decide to do. They don't make their decisions based on whether the shareprice is 1.37 or 1.55, I know that for certain. They base their decision making on factors like - are their clients withdrawing funds (which is what happens when there is a global banking crunch and investors go risk off), and/or whether they see opportunities elsewhere. But in case there is any doubt - Cannacord actually TR1'd so we know they are selling. How much they are selling and when they will stop we don't know. Who is buying their shares whether it is institutions or PIs we don't know. But what we do know if Cannacord are selling. If you are interested in short term price fluctuations (either as a strategy for trading or because it affects your investment) then that's a good place to start.

For the shareprice to go up, we need other institutions to buy (not just Cannacords shares, but yours, mine, soundbuys). They will probably do that when they see more pieces of the jigsaw align - last debt drawdown, build complete, commissioning starts on time. When will that happen? Well if Horizonte are on track and commissioning can start in H2 then we're not so far away from that time. I'm told by people who understand the engineering better than I do that there is still plenty of risk during commissioning (the flow not working correctly first time) so perhaps we won't see full value until fully commissioned. But we should see a rerate in any case.

Just to illustrate the effect of the dilution here. Assuming my median estimate for equity had come to pass (admittedly based on the $430m capex estimate published in the DFS) and we'd ended with 2.5bn pre consolidation shares, and no second raise. Also assume current shareprice factors the convertables as equity, so the 'effective' mcap of Horizonte should be the fully diluted mcap assuming current equity price.

Current effective mcap: £380m * fully diluted shares in issue 330m / current shares in issue 268m = £468m
Shareprice at 2.5bn shares pre consolidation: £468m / 125m shares = £3.74

So if we had 2.5bn shares and no convertables, at current nickel price, with current macro, with current mcap, shareprice would be £3.74. The fact it isn't is due to, in no particular order, the war, the banks, Covid (incidentally the 2-3 yr gap between DFS and financing was due to Covid and will almost certainly have impacted not only the shareprice equity could be completed at but also the total capex. Capex would have been much lower in 2019 than in 2021).

So, we could be £3+ right now but we aren't. But in a years time we should be - if the build completes on time and on budget. GLA

>>(assuming we are building the mine by Q4 or at worst Q1 2025
Sorry got the dates wrong. Q4 2023 or Q1 2024 mine build starts hopefully (so mine built and producing 2025?) Normally the lassonde curve should kick in with 1yr left to production so this would suggest a proper rerate end of this year/early next which is a really good, relatively short investment timeframe.

Incidentally - I 100% understand that you are frustrated by the SP of Horizonte and other investments. I'm in the same position - Horizonte at 7p and everything else well underwater. In Horizonte's case this is due to the dilution - 3-4x the number of shares we had previously. If we'd got a better deal the shareprice would already be 15p+ in old money and everyone here would be best mates and offering to buy each other drinks. The fact it isn't is due both to the original deal (the banks insisted on huge amount of equity and contingency) then the resulting inflation due to the war requiring the second raise. This is why the shareprice is 7p, I, like many others on this board, really wanted it 15p+ by now. But this is down to macro factors and not what others are doing here.

On the other shares you have my commiserations its a hard game and we're hopefully near the bottom (on AIM anyway) right now. Once the bank liquidity thing is sorted and assuming we don't see 2008 again, I think in the next 6-12 months things will turn around.

On Horizonte - I'm as near certain as I can be that 15p+ will come, but we have another 1-2 years to wait I think. It's what everyone invested here wants. Lets hope the build completes on time, commissioning goes well, then it'll be beers all around on the board of that I'm sure. GLA

Also institutions (and to a lesser extent PIs) trade with risk on risk off approach. Have you noticed anything in the last few weeks that might affect the shareprice? One of the largest investment banks in europe going down? Might that affect the mcap of a £250m mcap company which is largely funded by european banks? You might find these factors again, are more signifcant, than soundbuy or me buying or selling a few.

Strummer - I like you - really do but your obsession with what others are doing is really missing the point on Horizonte. Horizonte's shareprice at least in the next 12-18-24 months will be driven really purely by what:
- Tsinghan do with their listing / Indonesia mining/ flooding the market or not with nickel
- Glencore do - will they buy more shares open market.
- The other institutions do will Cannacord sell up
- most importantly do Horizonte deliver on their milestones - is the build on track, are the debt drawdowns happening, how good is the A2 DFS, how good is the V DFS, how can the A2 DFS be funded.

Literally everything else is noise. If soundbuy or I or you sell 10,000 shares and buy them back later (or don't) who cares? It will matter not one jot in the long run because institutions with far deeper pockets than us will buy (or sell) based on the factors above and not based on whether you or I consider it a sound investment.

I think Horizonte is an excellent company with great prospects. I bought quite a lot of shares (in the trading acct) in Jan/Feb. I bought some at 150p and some at 155p. Am I bothered that I'm underwater? No.

I sold some in the SIPP yesterday to buy Atlantic Lithium (to diversify risk). Does it mean I think less of Horizonte? no. Does Glencore, Jeremy Martin, or anybody else on this board care? Hopefully not.

I think at £250m mcap you really need to forget that this share is massaged by people on bulletin boards - sure that might happen to some much smaller cap more illiquid stocks but we're way past that. If you believe this will be taken out (which I do) then in fact we are quite close to the endgame so the only thing that matters is Horizonte hit their milestones so when Glencore put the bid in, it's the kind of $$$ we are all here for.

All IMHO.

>>So at commodity price 3y I would expect the mcap of the company to be > 3x
Just to be clear - I'm saying if the commodity price is 3y I am expecting the shareprice to be higher than 3 times the shareprice at commodity price y. That's the effect of gearing on the price. The converse is also true sadly- if the commodity price drops below y the mcap / sp would collapse accordingly because at fixed production cost the margin is eroded. GLA

I've seen a couple of messages posted saying if the broker target is x at commodity price y then fair price would be 3x at commodity price 3y. This is not normally the case - if production costs are fixed or relatively fixed then miners are much more geared to the commodity price because the excess price is (usually) pure gross profit so the only consideration is tax. So at commodity price 3y I would expect the mcap of the company to be > 3x. Another factor is payback - my understanding is that payback here is very rapid because the IRR is very high so it may not be such a consideration but if the excess profit can be channelled into repaying capex debt then normally this should also further help the shareprice because the debt is accruing interest for less time.

Whatever the gearing here (and must confess I haven't done full research) you do want the commodity price high and at production this should have a much bigger impact on the shareprice. Also the lassonde curve - one of the reasons I really like buying in at this point (assuming we are building the mine by Q4 or at worst Q1 2025) is we are sitting close to the point where appreciation towards NAV begins (understanding that of course - we need the licence and the final piece of the financing jigsaw).

Exciting times and may the commodity price stay high! GLA

New investor here - took a position last week on the drop and added this morning after the director buys. Looking very promising indeed. For me, complements my EV/battery portfolio as I didn't have any lithium stocks previously. See there is a resident de-ramper (all boards do have 'em)! I took the Blue Orca thing with a very large pinch of salt, as, apparently, did the directors here. GLA