Member Info for wasarunner

Combined NPV is still states as $6bn. I know the Vermelho DFS and the A2 DFS will update the figures, and it is highly geared to the nickel pricing (and also based on the original A1 DFS which is now deprecated as the capex is clearly much higher) but still -> it is a lot of NPV. I also like slide 6 valuations - at nameplate production the median NPV multiple trading is for 0.8x NPV which would make our SP around £3 based on A1 only. Upside for A2 and Vermelho.

Putting aside Vermelho for the minute as we don't know how it will get funded. 0.8x mcap-NPV assuming A2 is built from cashflow or rollover debt with all the other assumptions Horizonte state, at current GPB/USD exchange rates yields an SP of £4.84 based on Araguaia1+Araguaia2. If A1 is delivered on time I'm hoping we see a significant % of that reflected in the SP sometime in 2025 as we start building A2. With further upside from Vermelho. That's not bad for a couple of years to wait....

TDT I don't think it has been published anywhere AFAIK - not that I have seen. Clearly, it has been sufficient for the banks to sign off on it though. From conversations 'back in the day' I believe our product trades at a slight discount to LME prices anyway (i.e. the nickel content of ferronickel is priced slightly below class 1 nickel price) but I'm not sure what that discount is and whether that discount varies with time. I also believe there is some fee that Glencore charge for the offtake, but that the fee is a small %. So I guess net to Horizonte isn't 100% of LME price but I don't know the specific detail I'm afraid. The nickel price seems so volatile anyway a couple of % here or there seems relatively small beer to the general direction of the nickel market and the macro driving that. I tend to be slightly cautious plugging huge values into the NPV calculator though prefer to be cautious in that regard - I've tended recently to assume something like a $25k/t average?. Now Vermelho of course will be a different beast, hopefully the output will be a bit more of a premium product perhaps getting a premium on the LME price (or is that too optimistic?)

https://horizonteminerals.com/uk/en/press-releases/2022/final-results-for-the-year-ended-31-december-2021/

100%, 10-year Araguaia offtake agreement based on LME pricing signed with Glencore.

Surely that's a filled order that has resulted in the price rising in the last couple of days? So a buy? But it probably took a couple of days to fill?

I guess the most interesting permutation is - Glen making the bid. If Glen make the bid, then with the support of 1 of Orion/La Mancha on price, they have 37% of the vote and only need 13% more. Therefore say Orion or La Mancha individually would struggle to block a bid if say Helikon are happy with the price....

To me it feels like it would be hard for another bidder (not Glen) to take it. They would have to offer a lot, at which point, Glen could offer more. Glen could make their bid more likely to succeed by now (pre conversion) buying more shares open market - they can do that at present as they are well under the 30%. If they bought open market to get themselves up to 30% (probably very difficult - they have to buy 12% of the company and that might not be possible with the sellers) the most Glen can hold post conversion is 24.4% but that would be a very difficult stake to buy them out of by another miner.

It is going to be very interesting. Very interesting indeed.

Incidentally the massive jump in Orions holdings in my calc are down to the fact that the convertibles were adjusted for the second fundraise - as Orion held $50m of this bond, they 'win' in this situation because they get a lot more shares for the convertible than they would before the second fundraise.

As I said happy to be corrected on workings if I got something wrong.....

Here are my workings for the 'as it stands with what we know' shares in issue assuming Orion & La Mancha convert their bonds. I am working from the most recent ii shareholder list from Horizonte's website, and the TR1 from Helikon, and I am assuming 330m shares fully diluted (the calculation is inexact because exact number of shares are determined by how much interest accrues before conversion). These are the pre-and post conversion shares and % holdings:

Pre conversion:
La Mancha 62297182 23.21
Glencore 47871805 17.84
Orion Resource 28292291 10.54
Helikon Investments 24339900 9.07

Total Shares 268406643
(Top 4 own 60.65%)

Post conversion:
La Mancha 76511033 23.19
Glencore 47871805 14.51
Orion 75671796 22.93
Helikon Investments 24339900 7.38

Total Shares 330000000
Top 4 own 68%

I guess I started looking at this to determine which institutions can make or break a sale. The dynamic is quite interesting with Orion and La Mancha holding similar stakes, but less than 50% combined to completely block a bid. I guess if both agree then it would be hard for Glencore to block a bid too so I guess that makes another miner just as likely as Glencore to pick it up unless Glencore bids more.

Happy to be corrected on workings. Assuming the 4 above are pretty stable shareholders (or, may add at some point) then that's 68% of the capitalisation out of circulation once the convertibles convert. 2/3 of the company are owned by 4 entities at that point.

Too technical for me but does it look, on the face of it, like they have increased their position? A good sign surely if so...

>>I'm assuming we're still waiting for these, or did I miss something?
yep, waiting

Yes agreed - the published spread looks quite big here give the volume but the actual spread is probably much tighter. If they are transacting a large amount with an arranged buyer presumably they can negotiate the price both parties are happy with (at an agreed point within the spread). I just don't think these ii buys (or sells) are buying Jo Public shares, they can't get that volume?

See Horizonte are at the BMO conference next week will be interesting to see if we attract more institutional buyers as a result. Must be a lot of interest in nickel I would have thought.

Is it more complicated than 'it's an ii trade buy or sell is fairly academic as another ii bought or sold it on the other side of the transaction' and hence a negotiated trade? I don't think they just executed 'at best'.

Lots of ii shares trading hands we saw Cannacord selling, wouldn't surprise me if Helikon are still adding and there must now be a few other funds in the mix too below the declarable thresholds? These guys will trade £1m amongst themselves all day long....

I'm pleased we seem to have a solid base around this SP. Onwards and upwards when the mine builds.

>>What's the potential of this company if all goes to plan ?

Top 5-10 (western) nickel producer in the world by kt/annum.
In SP terms, 2x-5x of todays price depending on how long it stays independent and how long you got.

Indeed - but just a note - AISC is a lot higher than 600-700 presently (for GRL). Somewhere north of $1k/oz. But this can be improved and this is where the profitability lies:

- improved recovery rate will improve AISC
- own equipment purchased with the money from the raise (rather than whatever the cost of renting equipment is) should reduce AISC
- higher grade material (for example from Akrokeri) shipped to Homase for processing could improve AISC

I think profit margin x production capacity is key. GRL need to improve both clearly to generate more profit. The debt level isn't that big - indeed even the recent CLN could be paid back with ~1.5koz of production.

I think the reason we are 3p as you say reflects current values and the reason we aren't rising from 3p is nobody is buying presently as nobody believes it will improve. When it becomes clear that it will improve people will start buying (we're cheap then) and we will have a higher SP. Find out in months ahead I guess.

https://horizonteminerals.com/news/20210401_HZM-SDT-MRE-NI-43-101.pdf

VDS and SDT are in one range of mineralisation (see page 32 above) so I think very close.

Rover - think it's a bit more complicated. Araguaia North is even separate for Serro do Tapa. They own absolutely metric ****loads of nickel rich ground. You can ship from Araguaia North to Araguaia (south) and process there. OR you can build another mine at Araguaia North to service Araguaia North nickel+Serro do Tapa (plus all the Vermelho ferronickel, of which there is some - can't remember if it is the limonite or saprolite).

Then you can go hpal or nickel matte....

So many options......but only if we don't get bought first :) But lets walk before we run and get A1 built to time and budget - because as Craig kept saying way before I understood what any of this is all about, A1 is the gateway deal to the rest. GLA

>>A few of those with interests in Brazil :)
One is even a shareholder in Horizonte and announced rather good results the other day...

Obviously I'd like them to do a 46kt DFS study because whoever ends up building it has to buy it off us for more money. The capex on 46kt HPAL is going to be huge though, so the JV partner or eventual t/o buyer will be a big player with deep pockets to build that mine. Presumably a world top 6 type miner. A few of those with interests in Brazil :)

Don't think so - I noticed that (on Vermelho) I think it is the Vale figure.

They are highlighting the 'upside' on these slides - Vale have previously done a 46kt study so '46kt is possible' is what they are saying at Vermelho. I expect the DFS to be less, something like 30kt at Vermelho, personally (or maybe 25kt per the PFS)

looks like an insti - hopefully they keep buying and we see some TR1's at some point!

Looks really good - starting to look like a mine! I particularly also like slide 2 where they highlight Araguaia North as a separate 32ktpa potential PFS mine. All the excitement at the moment is about Araguaia 1 being build and big brother Vermelho going to DFS stage but the fact that there is an easy 50ktpa combined ferronickel potential across Araguaia and Araguaia north even outside the HPAL/EV space is pretty exciting - just the ferronickel revenues at $25k/t could be $1.25bn a year on the 50kt!

https://horizonteminerals.com/news/en_20230216-photo-book.pdf