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Much better I think. Covid cost us 2 years - I have it from very close source that they could have done the finance deal in 2020 (don't know if better terms, but certainly post Covid inflation was already a thing so the overall build should have been cheaper - we raised c. $630m against DFS $440m I think). Covid cost us 2 years in time - I wasn't complaining at the time because it also gave people a huge opportunity to pile in at 1.7p-2p on Horizonte (which I did, and it looked pretty good until now!).
We still don't know exactly what the reason for the overrun here is - maybe we never will? I suspect it is a multitude of factors and not 1 or 2 so we would probably be oversimplifying it but it would be nice to know that when they eventually do the refinance here they've addressed all those factors because it has to be last chance saloon for us this time round.
I'm not naive, I know there is some risk of 0 here, probably fairly low, and a bigger risk of a big dilution, wouldn't want to put a number on it, but there is also a decent chance of SP recovery in due course. Due course perhaps being a longer timeframe than people wanted and recovery being £1 one day or something not the £3-5 which looked eminently doable with 330m 'fully diluted' shares.
I still think with what we know the current price is cheap, once you discount the 0 option.
Hazbeen you're not wrong, but when Orion and La Mancha (each in their own right $bn PE funds) committed $0.25bn to the project at 140p and 90p it was a * reasonable * assumption they wanted to make money. So for most PIs that was a good starting point to speculate 'what if' and we know they don't generally part with cash for 1.2x their money back.
When Horizonte published a DFS for $440m that also looked pretty reasonable at the time. Note that was before Covid Saars 19 (who predicted that would happen) and Putin launching a full scale invasion of Ukraine (ditto). So yeah, I get it, mug punter PIs should hide their dosh under the mattress where it stays safe, or.....
As it happens now Orion and La Mancha happen to be in a bit of a pickle on this one and randomly, I think their interests are vaguely aligned with PIs which is why I stay invested. I could be 100% wrong though and we might get taken to the cleaners. We wait and see. GLA
>>Wasarunner you seem confident this will get over the funding line.
yes- I don't think institutions which put in $700m (debt+equity) will let that money go down the drain, and I don't believe the guy who has closed $68bn in deals would be the helm unless it were salvageable. It will get funding, it's the terms we don't (yet) know.
>>Topped up again, bringing total holding to 1.26M, averaging approximately 10.97p
wow I wish that was my average! It probably is, but pre consolidation numbers :) point taken about the filtering by the way I'll try harder to ignore the (obvious traders talking it down) wise investors warning me not to lose money. GLA
If you believe your thesis short it. How many you got short? None? Why not? What price you short from? What's your exit? Post your strategy so we can see if your wisdom plays out.
My strategy is to hold, 824843 shares, to be precise. Admittedly not worth a great amount right now, but in the future, how knows. The future is bright, the future is nickel.
>>a mine shaft flooding
hilarious. Never heard of a mine shaft flooding on an open pit mine but I guess it could happen :). As for jungles.... :) :) £2 is more likely than 2p IMHO (though agreed, both may be unlikely anytime soon).
YanaAlikhan - member since: 15th May 2023, first post on HZM: today, at 17.40
It's always good when people with no prior interest in a stock take it upon themselves to warn others of the perils of investing in it ;) One wonders the motive....oh hang on a minute, it might be obvious...
"The Senior Debt Facility comprises a commercial tranche of US$200 million and an ECA tranche of US$146.2 million which is being guaranteed by two export credit agencies (being EKF, Denmark's Export Credit Agency and Finnvera plc, Finland's Export Credit Agency)."
...and Finnvera and EKF just write off their $142m, just like that. And BNP Paribas et al their $200m. Not likely.
"This funding package is a demonstration from the Company's largest shareholders on their commitment towards finding a solution to complete the Araguaia Nickel Project construction. We are actively engaging with our cornerstone shareholders and senior lenders with the goal of unlocking a funding solution in Q2 2024." said the man who closed $68bn in deals over his career.
Yeah, doomed I tell you....
"So, he value of the operation as a whole is dropping with that share price. It also needs new capital. So, every time the share price falls another notch they have to sell even more of the company to raise that necessary capital. Dilution goes up with a falling share price."
Partly true and partly not:
- will they raise below 20p? If not then 13p is a bargain
- will a raise at 20p result in an eventual sp higher then 20p? If so then 13p is a bargain
- will Orion and La Mancha let their 140p shares get diluted to oblivion or find a.n.'other' way, and, perhaps raise less than 100% of the capex required as equity? Then 13p is a bargain.
Those are the bets, addiitionally, since that article $20m has been injected by the cornerstones which would tend to indicate funding of one form or another will be forthcoming. You places your bets, you takes your chances. GLA
Morningstar is wrong?
There is obviously a load more upside (assuming it can get financed, and now the big guns are running it, I'm sure it can) from A2, V etc assuming we live that long. So for any investor here taking shares at 18p with a 3-5yr window, I think it's bargain of the century personally. It is very possible that this will be multiple pounds sp once further mine extensions are built, I just think now there will be a cap (I'm not sure what) with A1 that's all. GLA
There's no right or wrong here we're all guessing to a large degree. I'm working on the basis that if 'the deal' means half the upside has gone, just to keep it simple. And pre deal £1.50 pre production £3 at production were the targets for A1. Then post deal 75p - £1.50. I guess I'm happy to contemplate a worse outcome so I'm happy to contemplate 1/3 of the original value then 50p pre production £1 at production become the numbers.
Yes with best case financing comes the best case outcome but we don't know what that looks like yet - above is what I can live with. I don't really think it will be much worse because I do believe the above is (just about) achievable with mainly equity and I don't think it will be all equity.
If $300m is required and it is all debt. It will still have a big impact on NPV. Sure it could be a more complicated financing deal or even a restructure of opco/holding co but either which way you don't suddenly run into a $250m 'black hole' in your capex cost and come out completely unscathed. If it were really easy to pull this off it would have been a 1-2 week process not a 1-2 quarter process which cost the previous BOD their 10yr+ jobs. All IMHO and btw - yes I think it's a bargain at 8p and a bargain at 18p and haven't a clue what it will be next week :-)
That bit's easy -> Angela List is CEO of Nguvu Holdings Ltd and Nguvu Holdings Ltd (according to Goldstone shareholder analysis and recent RNS) are 11.9% shareholders in GRL. So she doesn't own them personally, but is a controller of said shareholding. Nothing fishy about that bit (plenty of other fishy business going on though!)
The reason £1 will be hard to breach even with the best finance terms is the finance deal will have a 'cost' either to NPV or the share dilution every which way. So it can't immediately recover to £1.50 etc UNLESS someone gives us 'free' money and as we know in business, money is never free. All IMHO....
Theorist I don't disagree. I think the brigade that think we'll bounce back over £1 anytime soon are as unrealistic as the brigade that think 5p equity then bust. Personally, I've reconciled myself to a lower 'return' (if I can call it that given my breakeven is above) in both the medium, and long term. Long term great things are possible just how long you stick with it.
Personally do think within a year we will see the 40p-£1 range though IF within that year we complete a mine build and commissioning up to a decent % of nameplate. There's no reason that shouldn't be possible. But it is still less than we were pre commissioning pre October RNS. Anything over £1 for me in the next 12 months is a bonus.
The interesting thing about that though is how much upside that still leaves from the current price. If you believe those numbers (40p-100p in 12 months) it is quite a clear buy at 18p. (The reasons I think that range I've stated before - it won't be all equity and equity won't be done sub 20p IMO). I do think it takes time for a stock to recover investor confidence also - the current mgt team have to walk the walk with construction as well as finance otherwise we've seen it all before. But assuming they're up to the job this will look v differnt in 12 months.
It's obvious a lot of the £1 next 5 minutes brigade are obviously traders and IMO the 'banter' is all harmless enough as long as you don't buy it too much :) The real rerate will come when Mr Nasr next announces something significant.
I've had contact with him in the past. He did say 55p post finance (pre consolidation) so got that one very wrong as we were 7p post finance and even latterly only 160p or 8p in old money. Maybe a deal didn't go quite as expected with the finance. Who knows. I disagree with this analysis I don't think equity will be done below 20p. GLA
Mv01 I get you :-)
My strategy in that scenario is to bet the house at 50p and hope I'm right. In the past my mistake was not selling at 8p. (Reverse those numbers obviously as I'm long only). But generally my entrypoints have been good, and my exit points haven't , well, been at all.
So I get you open a short at 50p and it goes to 8p then hovers for a bit - surely you close the short?
At that point your upside (so to speak) if you're short is 8p more gains if it goes to 0, or a humungous loss if it goes back up to 150p (because they do a clever funding package).
I don't short not out of principle but because of the unlimited upside risk etc. but at that point risk reward surely you would just close your short or do shorters get greedy and want that final 8p bad? You've got to be really sure, even more sure than publican, to hold them open at 8p surely? GLA
CaptainSwag I always thought that (very risky short at 10p and probably a risky short at 20p) but obviously tidy money to be made from contrarian levels if indeed he was short. I have no visibility of how much short was on it or what impact closing them would do to the price though so its hard to know whether it's that, or buying (probably bit of both) which has got us from 8p -> approaching 20p.
It'll be interesting if we break 20p, we were hovering either side of it I think when the 'we might run out of cash in December' news broke.
What also seems clear is the terms are tightly held. The price movements are PI speculation not driven by buying those 'in the know' - the current movement is very explainable with the 27th Dec RNS and the board restructure.