Member Info for wasarunner

>>,HZM have traded as high as 500p
Steeplejack I think you mean 200p. At 500p I would definitely, and perhaps even Craig maybe, would have sold up :) (25p in old money)

BB I suspect the drop was more driven by churn. Plenty sold, but it's pretty obvious there is also buying going on (hence the price held pretty steady yesterday and gradual recovery so far today?)

My best guess is - PIs are disgruntled and selling. IIs see this as a final hurdle to clear for debt drawdown and the (so called) smart money is buying. If so we could actually see a reversal back above £1. I always thought the debt drawdown was a really critical milestone for the company and expected it sooner hence I've mentioned it on a few posts. Now surely this raise clears the way for it which for institutional buyers is a big buy signal. GLA

Rich yes if they collaborate to hold out for a good offer from a buyer. I meant more - they collaborate to get jam in a different way that doesn't also reward existing shareholders. So for example Glencore could offer them a slice of Vermelho finance deal (with Glencore taking over the company), in return for a cheaper buy price of the Horizonte shares. Does this kind of thing ever happen? Orion and La Mancha offered $200m/$200m finance option on Vermelho at tidy return rates in return for accepting a lower bid offer for their Horizonte shares, kind of thing....

There feels a slight risk to me that Orion/La Mancha/Glencore could collaborate in some way to take it cheaper - for e.g. letting Orion and La Mancha in on a finance deal for Vermelho if Glencore took control. I don't really understand how corporate transactions work at that level, whether that's feasible, but I am pretty sure with the combined shareholding of the 3, nobody else could block such a deal - the board might not recommend it but all other parties are very much minority shareholders now. But maybe the Equity financiers want their jam today in that scenario and will hold out for best terms. If anyone has seen a similar setup and how it went please let me know.

My feeling is a major would want:
a. Horizonte to do the hard yards on A2 DFS
b. Further de-risk the project build by getting much closer to finishing it (and making sure the mine works! I've finished building projects that worked out less well than I hoped...)
c. Vermelho DFS
Its so much less risk for them if they have all three done by Horizonte they will probably happily pay 2x, 3x, 4x for the assets over what they can pay today. Against that you have the backdrop of tightening supply which might force buyers to move earlier. I don't really understand whether Glencore is in pole position or not, surely Orion and La Mancha would hold out for a best offer, if it wasn't from Glencore and invite other tenders. We do want a bidding war really.

Our best yardstick remains Onca Puma which I believe was sold without a built mine? Maybe that went for excessive money at the time but with a mine I would imagine we should get more, for 3x the resource. £1bn should be starters ideally...

We should get more than £3 really. I think a lot depends on the timing of thr bid. The longer we can hold out independent and adsuming build and production milestones are met, the more we should get. I think one of the problems for Horizonte is the vultures will not want to leave Vermelho unturned. As soon as we have a dfs there thr bid might come becaise the nickel squeeze will mean people want new supply and there will be pressure on to build a mine say ifit takes 2 years to build. So we may see a bid earlier than we'd like and that might be a reson we don't get full value.

$2.5bn+ but depends on nickel proce obviously. Vermelho has an obscene npv but how much you get for it in a sale at dfs stage who knows. You should get a decent price for a2 though if you got half the plant and the fcf to build it 'for free' ie buuer has no capex on a2.

£3 I reckon. They still have to pay a premium and thats only npv for line 1. 15p in old money, which is c. 8 bags if you bought 1.7p and c. 1 bag if you bought around the main finance price. I could be wrong and it goes for more but my view is it will be sold as soon as the buyer can be sure A1 is production capable/producing. Best have a solid dfs for a2 and V by thrn so we can get some value baked in. Late '24 early 25 is my best guess....

Devil interesting re: bkt do you have a source for that? I was hoping they are on track for q4 as De Vries intonated on that investor interview...in the background I am reading graphite going higher.

That's fine Strummer but you should direct your intuition at what La Mancha, Orion, Jeremy Martin, Matt Bull, and whoever the CEO of RMM is, what their next moves are. I'm not playing the game against you and we both want the same thing - in fact our strategies are broadly similar as I understand it we are both investors - I don't move shareholdings lightly between investments and I have convictions in them. There was a time where perhaps what I did or posted or sold or bought moved a share, say, Horizonte, but after Glencore and Orion and La Mancha took the helm that was no longer the case. On some of the other stocks I am an outsized holder so I accept what I do may move the price somewhat but I have never attempted to mislead and never for gain. Lets leave it there if that's ok. Horizonte for me is still a good investment, but it was an absolutely great investment pre finance deal which has become less good, by 77% no less. GLA

i.e. if you think me holding 25m and trimming to 10m is a problem. You've missed the fact there are now 6.4bn shares (in old money) and my holding is literally, neither here nor there....

I sold after the finance deal and said I didn't like it. It wasn't in one go, I sold some then later I perceived other stocks to be cheap and I tried to balance a PF into 3 shares (you know which they are). Horizonte was a solid hold for me always but the 4bn shares was a shock and I realised - much as you like the commodity, jurisdiction, management, things can always hit an individual company you can't control - perhaps an election, perhaps a war, perhaps inflation now. Was I right or wrong, probably if I held Horizonte I would have more £ valuation. I thought Horizonte would take longer to get to my target valuation (i.e. it would now need to build 2 lines, so 2026+) to get to what I wanted and I wanted money sooner I really really need to buy a house around 2024. I moved into stocks I thought would perform quicker, which they then of course haven't.

What % of portfolio people have in which shares is their business, I hope nobody tries to follow my %. I risk weight it by what I see. I am happy to have a third here, I think it will make money, but I need to be able to lose 1 completely. I admire Craig's conviction to keep all in 1 share through thick or think. Hopefully it works out. DJ sold up lock stock in several shares and moved his whole PF. Different strategies I've never done that (yet).

Tigar I agree drip feed is a fine strategy. I had regular income 2018-2022 and it's what I've done into stocks it worked well because you get some high prices some low prices but it averages out nicely. If you're lucky you come into money at market lows, that even happened to me once or twice.

Strummer back to your critique of my strategy - it really shouldn't matter what I think, or do, once Glencore, La Mancha, and Orion are steering the wheel (which was immediately after finance deal). Nothing I do or sell makes one jot of difference to this share. The big guys have everyone, JM included, by the curlies. You stay on for the ride or you leave it's everyone's individual decision. GLA

Tigar I agree there is money to be made from this level I guess the challenge is:
- a lot of PIs got in at around the finance deal (either before it, hoping for a better deal, bought 7p+) or immediate aftermath 'if 7p is good for them then 6.9p or 7.1p or whatever is good for me'. Those that bought higher are hurting, earlier investors (me included) can afford to sit on our holdings albeit paper profit presently is lower than pre the latest news.
- Our expected return has dropped somewhat. For people who needed this to 5 bag+ or whatever (which is obviously never a given, or if it was easy everyone would do it) there is understandable frustration on that front.

I remember there were investors on here quoting 55p+ (old money) would be possible once we had finance. Understandably many are jaded that we now see 4.xp in old money. I was always more cautious thinking 20p was a decent return, with an outside chance of Vermelho/Line 2 etc propelling us closer to 30p-50p. On paper it looked possible.

My median case now on successful mine build and assuming no more macro shocks is £3 at production equating to circa £1bn mcap. That might factor in a bit of fat for Line 2 and Vermelho because it might be a good % of the NPV of the A1 project. You only get NPV in your valuation when the market is absolutely certain you are producing seamlessly and that here might not be till 2025/26.

Just my 2 pence - for me now this is an investment for £3 at 2025 and I will continue to hold 500k+ shares for that outcome. That's 2x+ of what Orion/ La Mancha paid in the first round. There is almost certainly upside from that number if Araguaia is producing and we get a bid for the company including Vermelho. Risks I see - nickel tanking and a bid coming early, or the company not successfully building the mine. If nickel holds up and the bid is late (post production) I think we all make money. GLA

I remember I did a dummy sell a year or two ago, right off the peak price 10p, on a million shares in my ISA. I was offered £99k one go. I remember not even being remotely tempted to take the money. Oh hindsight is a wonderful thing. Now I am hoping we get back to those levels at or around production, hopefully a bit higher (£2 new money). I held 25m shares at that point or £2.5m. My PF is worth less than half that at present (I hold a bit over 500k HZM now). Never mind, large glass of something strong and tomorrow is another day. Still got my shirt and the future is bright, the future's nickel/cobalt/graphite etc.etc. GLA

OMJ I agree - guess it's not his forte. More of a digging for graphite kind of bloke. He will need that role in due course, of course (and also explains the poor content on the website). I'm OK on websites but less good at digging for graphite, guess we all have our strengths.....but yes it doesn't make for a well rounded company.

ok so where we differ maybe is if you haven't factored the loan notes (extra dilution). I make the loan notes now convert at 50m new shares (1bn shares in old money), I've made some assumptions to arrive at that figure on the interest element).

Yes it is an interesting exercise and of course, all important when calculating potential return on your investment. This is still a very good investment if nickel stays above $20k/t. But that's where we want it to stay for all our sakes around when production ramps up....and goes without saying, no more dilution......

And how does he prevent that level of dilution:
1. Wait for as much of the pain of construction (the costs of which have gone up) of shared infrastructure we can piggyback to be done y someone else. including the risk of cost/slippage with said infrastructure.
2. Time the investment of new capital to chime with the graphite demand deficit and a positive financing environment. For which, maybe right now, we need to wait.
I guess my position with this investment is, I don't want to be diluted to 25% and I am prepared to wait, the resource/asset/and eventual returns are worth it.

My calcs are (sorry for the OT but it becomes relevant here when we finance this mine build) Horizonte have 6.4bn pre consolidation shares vs 1.45bn pre start of finance process. In the process of financing 77% of the company had to be handed over to new investors. There may be some errors in my maths but that's some approximation - pre mine finance investors kept ~25% of the company.

This is exactly the scenario MB is trying to avoid here because he wants to do better. If he issued 3x the current shares (so existing investors get 25% retained) if he does it at 2p he can raise approximately 100% of the mine finance with equity. He could almost certainly do it tomorrow. No banks, no lenders, nobody else to worry about. He doesn't want to do this because, he doesn't want his shareholding of 10% to become 2.5% having done the hard yards of getting the resource proven, the product proven, and the permitting in place.

I've said it before and I'll say it again, I can live with 50% dilution here (I retain 50% of my holding) if it comes to it, which could be a pretty dire market, because the IRR is really high. As an investor I still make loads of money at those numbers. Hopefully he can do better, but that's a pretty base case and makes the investment case here still excellent. GLA

>> that includes the mini raise
Sorry should have meant excludes. 1.45bn before proper financing started, but I am ignoring the $25m Orion royalty in those numbers as those weren't shares.

Panda1 what numbers are you working with? I am doing 1.45bn (pre finance - that includes the mini raise before the main package) over 6.4bn current shares including loan notes (which is an approximate calc) meaning 22.6% of the co are original shares i.e. company has given away 77.4% to get finance done. My maths may be wrong, however.....(I am ignoring outstanding options I don't know how many there are)....

All numbers above are pre consolidation share count equivalent.