Member Info for wasarunner

Horizonte was stalled 2 years by Covid. How do I know? The CFO told me in Feb 2020 they expected to have the mine financed by end 2020. In the end it got financed end 2022. They did their best during Covid and it probably wasn't by their choice but they couldn't close finance during those 2 years. Are Armadale better waiting now? My feeling is it is a deliberate strategy to at least wait till Blackrock are further advanced because of the read-across factor and also hopefully macro improves. How does a recession affect this? I'm no economist and think things will generally get bad before they get better but markets generally work ahead and are fowrard looking so the low point in the recession shouldn't coincide with the low point in the market. Personally expect FTSE to fall much further, in the UK a big ***storm is brewing, but that's already why I invested in $ denominated assets since the Brexit vote as I don't trust the £ (at all). How does this affect financing, well of course we have to raise equity in £ which is not so great for Armadale if the $ is strong but once again, low capex, high IRR is where you want to be there will be a finance deal which is palatable available. WE should get indication of this from whatever finance deal Blackrock have brewing.

On the price sensitive news no if Horizonte have price sensitive news they have to release it but if it is marketable news that would generally support the story they can wait till it suits them and they think it will have better impact. I consider that particularly BOD first rate and I don't think they would not play by the rules. Similarly on my other investment GRL we haven't seen up to date production figures but they aren't bound by stock market rules to release them so I resign myself to the fact that we will hear about it when we hear about it.

just on shareprice because understandably it's how we measure performance. I would love to have bought all my Horizonte at 1.7p, but I didn't, I started (and bought an awful lot) at 4p. Similarly Armadale there is an uncanny similarlity that I started investing at 4p and recently added a decent tranche at sub 2p. If we all had perfect hindsight, understood how long the Tanzanian bureacracy was going to take, understood that Putin would invade Ukraine, we would all wait for our HOrizonte 1.7p moment or our Armadale 1.7p moment and buy all our shares then. Then I could have made £2m on Horizonte and a bigger multiple here. But this is an unrealistic expectation. So a perfectly good strategy is to add weighted positions over time to smooth out the fluctuations ALWAYS ASSUMING THE INVESTMENT CASE IS THE SAME. That's all I did at HZM and it's all I have done at ACP. I don't see (barring timescales moving) anything at all that makes this a less good investment than before. Over time graphite price is generally improving (a bit of fluctuation but the trend is in the right direction) and there are cost inflationary pressures but our IRR is mahussive so we are OK. We all wish we put all our money in at the bottom of every market but unless you are buffett or something it ain't gonna happen.

Dee - on just how ****e the market is agree 100%. I recently had a call with CFO of HZM and he said exactly this - they don't want to particularly spill news currently as it will literally get sold into. Market is dire. THis, combined with lack of comms at ACP is causing understandable angst with investors here - leathal and Amtech being two of them - I get it I have no gripes at all. My circumstances allow me to be confident and take a long view but years ago I was in a similar position - shares didn't perform, I needed money, portfolio was red, sleepless nights. I learned you should only invest what you can sleep comfortably. I may end up losing £50k on a russian stock I don't know but I can take that hit. I don't currently expect, at all, to lose my investment here indeed I think it will do pretty well. But it will do well a year or two after I hoped it would do well that's all.

What's the worst case outcome here? Blackrock builds a mine becomes a $500m mcap company. Armadale sit in the sidelines not developing anything. Sell the resource for a low multiple of todays shareprice. Not what I want but literally, with £2m in the bank, that's the possible worst outcome here.

Slightly worse ioutcome s financed mine build going wrong but I'm assured its a simple mine to build and our man we hired is the man for the job.

leathal - I was the only one buying Horizonte in 2019 and 2020. It made me £1m (in realised + unrelaised) gain. I don't personally equate low share price to no prospect, I think that's a fallacy. I concentrate on what's important - how much cash has the company got left, how much will it cost for the next stage (in our case finance), have we got a management team that can deliver it. In our case if BKT can do $120m we can do $40m and yes Matt needs more board members and I've said that to him when we've talked. But the shareprice in and of itself is not a determinant of outcome - that said we do want it much higher for equity finance and Matt knows this also.

Why the hell would your investment be written off? £2m in the bank at last accounts, no big cash burn, enough to get us to negotiated finance, permit awarded and our larger neighbour just cleared the final regulatory hurdle this morning and you think your investment is written off? Graphite demand curve, maybe optimistic who knows but I see more EV in the future not less and our graphite doesn't only target EV.

I'm not pessimistic at all and I've put ~£700k in. It will take longer than I wanted it to I accept that's all. I haven't written my investment off at all barring a miracle. And in case it isn't obvious but as nodeniro pointed out, MB holding is more than twice mine so he is equally incentivised to make this a £100m+ mcap company.

So hopefully they had other discussions well advanced as they were waiting for this final agreement. Might see the offtakes and finance land in Q4 which I think was what De Vries mentions in the call as the target window. I think that will then open the gates for our own operation to be progressed along similar lines. We were realistically always behind Blackrock they are clearing the hurdles first and we will follow.

https://www.miningweekly.com/article/black-rock-gets-special-mining-license-in-tanzania-2022-09-07

jamtart, the feasability study already only uses 25% of the known available resource (clearly the higher grade stuff most economical to mine). THey can explore more, of course a buyer would potentially pay more for a bigger mine with more resource but essentially Armadale already has more proven graphite than it intends to mine (which is also the case with my other main investment Horizonte - much more resource than they will ever be able to get out of the ground 4m+ tonnes of nickel).

I think in a sale you would get more so there is some economic benefit in continuing to explore/prove UNLESS that takes cash away from getting us financed and built in which case it isn't the right strategy IMO.

Just on the other point - is no news Oct/Nov catastrophic? Not with £2m in the bank it isn't. Sure if we were burning cash left right and center but we are 'cashed up' to finance at least here. Personally rather than focusing on the September warrant expiry I'm focusing on when we hear Blackrock finance news. There will be read across to Armadale when Blackrock progresses finance and build and IMHO that is what ACP are waiting on also. GLA

Akrokeri is a mouth watering prospect. I have to say despite the setbacks my first inkling that we were going to be fine was when they commissioned the drill earlier this year. You simply don't commission a drill on a second mine if you ha e existential problems on the first one. That told me they were comfortable with recovery rates, cashflow, debt position. I added then and more recently again. Akrimeri is very exciting - we don't know how it will be financed but assuming the economics are compelling, there is bound to be a way.

Something else I just realised is akrokeri isn't actually that far from homase. Essentially they are both continuations of anglo ashanti mine mineralization I thinn. Must be economies of scale to get two operations running so close together. Gla

Just on the price movement today - 2x£20k buys. They had to pay 0.4p over ask at the time. This share is just hard to buy in any quantity. Sure we will get sellers but when good news lands people generally want to buy. In a perfect world in the next couple of months:
- Homase numbers come out, stable, recovery rates good
- Initial Akrokeri drill results promising
If £50k buying (lets call it 0.1% of mcap) can move the shareprice by 10%. There should be absolutely no reason we can't go much higher with that kind of positive newsflow - there just aren't the shares around to buy, unless someone can be enticed to sell and the serious investors/principals here will be hanging onto their shares into positive newsflow particularly if Akrokeri is showing positive signs and we get a plan for development.

do hope we can get back to the 10p area. It would give investors confidence that the hiccups are behind us and the way ahead is a bit more cheerful. We could do with a production update at some point all well and good drilling Akrokeri but lets see some numbers from Homase soon...

not me, literally no cash left.... nice to see though!

https://static.seekingalpha.com/uploads/2022/2/22/37628986-16455876653404222_origin.jpg

Deficit starts this year and grows, massively....

Just on director buys - MB can take up his warrants. Given he could buy open market at 1.9p (and lets assume he can't for closed period reasons) but his warrants are his warrants he can convert them at 3p and put money into the company. That too would be a signal of confidence to put in cash at above current price.

Director buys are always a mixed blessing. Yes it shows confidence (if they buy a worthwhile amount). But it also shows that there is no closed period i.e. negotiations underway which have a material impact on price. I'd rather we didn't have a director buy right now because I like to think stuff is going on that will affect the price (at some point) in a positive way. Anyway I bought £7k more today but really needs to be the last of it....

>>I am drip buying at these levels
Hazbeen's drip buying! :)
30-Aug-22
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Right so:
Horizonte can't buy back the CLN till around 2027 and
They can only buy back the CLN if the shareprice VWAP has been £3.50 for last 30 days
I don't think La Mancha are sweating their timescale on conversion. Most likely they hope the bid lands before 2027.
Now lets be seeing that £3.50 shareprice by around early 2024 please - 17.5p in old money should be around par for mine built I reckon (without Vermelho news). Only 250% to go then from todays price...

The only chance Horizonte can buy the bond back off La Mancha without fcf from production is if the capex comes in miles under budget and even then, they are almost certainly generating better value for shareholders by not buying the bond back but using the cash to build A2. I think La Mancha will convert the bond at a time that suits them but I assume if there is an offer made for the company which personally I expect to happen around 2024-25 I assume it is exerciseable.

Look I am as excited about this share as anyone been invested long enough its the immediate rerate because of x y z random nonsensical thing I take issue with. Yes, we are undervalued, apparently in a dire market with a year and a half left to mine build the market doesn't give you par for value. But we have a huge trump card to get the newsflow going on Vermelho surely news can't be far away and that is a very marketable proposition particularly if the BOD confirm the inbound enquiries are continuing. Gla

Why would La Mancha convert the bond now to' do a quick buck to shareholders'
a. while it's debt it ranks ahead of equity and
b. it can be converted until September 2032 and
c. the option price is £1.75 which is around a 75% premium on today's shareprice and
d. Horizonte has absolutely no chance of buying it back off them until they can generate FCF from mining
It's not english I take issue with (it isn't my first language either) it's la la la nonsense. They'll convert it at or near production when the mine build is fully de-risked, the shareprice is above their option price, or somebody makes an offer for the whole company. In the meantime it has no relevance/bearing on the shareprice at all really other than the assumed dilution which already happened when Horizonte issued it to them.

Just in terms of valuations what's realistic. $500m NPV should be possible with graphite moving into deficit (as early as this year) and an improved basket price for the product. Say $420m after gov free carry convert to £ (blimey is that the current exchange rate) £360m that's pretax say 30% tax £250m net NPV and say you get 50% in your valuation you now have £125m mcap. Then it depends on shares in issue, if we double shares in issue on finance (like Horizonte did more like treble) we see 10p if we do a lot less (which I hope) we see more and 15p+ becomes possible.

Upsides from that are improved improved graphite prices (obviously) if massive deficit by 2025 and graphite price doubles then we see a huge increase in NPV. Upsides if you expand resource and aggressively expand the mine is also possible, we are starting with 400kt but BKT are starting with 1Mt.

All of the above is of course, IF we build the mine. These are just my numbers and often pessimistic but I like to think of base case 10p at production and work from there. When I invested at 4p that was obviously lower multiple than the ones I bought today (and I did say I wouldn't buy more but couldn't resist) small topup £5k at 1.9p. GLA