Member Info for wasarunner

DanInvestor - good first post! Two things I would comment on:
- bored PIs almost certainly but don't discount (pre) or post warrant selling either. The warrant expiry is a slightly technical slightly artificial scenario and will have an impact on trading. As such I see it as a buying opportunity because technical selling (nothing to do with fundamentals and for a constrained period of time) will artificially depress the SP. Savvier traders than I know this and won't buy during this time or they will try to time buying towards the end of the period.
- Of your three options. The reason I discount all but 1 is - we talked to MB last year on a couple of calls in which he iterated: a. the mine is simple to build and b. the finance is straightforward. Now given those two facts together, plus the fact that he _knows_ he will get a much better price eventually for a producing mine, and also he probably has sufficient support to block a hostile bid, I only see 1. as the likely outcome. Sure leftfield things can happen but I see this getting built - the lower capex high IRR makes it very investable for a lender or other type of financier.
Good luck and nice holding. Wish I could add more but just being greedy really, this gets built, we all do well.

I agree the best time to buy is when newsflow has been starved and people are selling out of boredom or fear. I am as guilty as the next person of believing share prices will never drop to previous lows - i.e. after the mining licence I didn't think we would see 4.xp let alone 3.xp. The fact that we have, and that the project is substantially de-risked by the granting of the licence makes it clear opportunity. But there are two ways of looking at it - as a trader who wants absolute best entry it is hugely significant, as an investor looking for anything between 20p-30p in due course, it probably isn't. It is in the sense of of course a bigger multiple is desirable but accepting you can't get timing spot on is part of the game for a non-expert trader (like me) who buys on fundamentals for multi year view.

My average is low 4s. If I had funds I would add here (or GRL or both which is also due news soon and I expect it to turn). But happy with my holding here I have ~13.5m+ which is possibly 2% of the co fully diluted if there is a small equity issue in the financing round, I think. GLA

Leathal it was good value at 5p of course even better value at 4p and would be yet better value at 3p. One thing I have had to get used to with Juniors is timelines you have to get used to timelines moving to the right but if you picked the right companies eventually you win. Here what is happening is a lot of warrants are being cashed puttimg cash into company coffers and the company runs lean so even if things move to the right you don't get the dreaded raise that stumps existing shareholders.

Will it get to 3p? It really depends how long before news and how many people see value well before then. We are 1/5th of blackrocks valuation so another penny or so drop woyld move us to closer 1/7th. Long before that I will personally throw the towel in (I have resisted so far) and start switching funds in. I dont have unlimited funds but I could add a few million shares and others can do likewise. Given the valuation disparity I don't think we will go that low for that reason.

Notwithstanding we all want news of course. I am reasonably confident here MB is working on a 'best deal' scenaruo,is he happy for timeframes to shoft to the right, maybe, but if it results in greater total return I can live with it.

Patience is never easy. But rewards will come IMO. Gla

True and not true.
Nickel supply and demand (to an extent) dictates price.
Lack of nickel supply dictates M&A interest.
The lack of nickel supply, and excess demand, therefore can attract a bid and this is more and more likely the higher the nickel price goes and the closer the mine is to being built.
There is IMO >50% chance HZM will never make a first sales. AIMHO.

Yes really interesting. What is really obvious from the long nickel graph is how much the market both undershoots and overshoots this is true of most commodities. What we hope of course we are in a huge bull market when production comes online here - I wouldn't bet against it (though concede hard to predict accurately but WoodMac believe so).

Inflation is a huge problem but (IMO) central banks used all the firepower in 2008 and govts/central banks did little to fix any underlying issues in the last 13 years (like lack of productivity in the west to keep up with rising expected living standards) keeping rates low for all that time has exacerbated the problem but kept the zombie US companies alive. And we are where we are - more govt debt, more personal debt, more company debt than every before. How can it be unwound? It can't - cue inflation and all you can do with your money is invest in things that will keep up with it (my bets are nickel, graphite, gold for now). I am uber bearish on fiat currency and prefer literally anything else (dare I say it even crypto :) ) Slightly O/T but been making some enquries around mortgages and pretty shocked the amount I could borrow (vs the last time I looked for mortgages around 20 years ago) as a multiple of anything. Interest rates are priced the way they are because they literally can't be raised or all the mugginses being sold debt right now are foobarred royally. GLA
GLA

Good discussion folks. I would throw in there AIM lets face it, not the best at valuing juniors. Perhaps it's the nature of a lot of 'investors' and I use the term loosely and advisedly :) we don't get quite same valuations as the Oz/north american mining exchanges. We can beat ourselves up about it or accept we are buying better value (it's a bit like buying FTSE vs DJIA) and at point of revenue generation or company sale hope the gap closes. That's my hope and it's why I invest in AIM cos that are likely to become producers because $$$ earned doesn't lie. GLA

Rate hike not a concern because it will bankrupt the west. Central banks know it, governments know it, people buying gold right now know it, people buying crypto now know it. Jo public only is unaware apparently. But on the off chance it happens, I suspect the banks and equity investors here stress tested the nickel price down to what - $12k/t or $10k/t here and Horizonte still made sufficient to cover. Very long before interest rates are a problem for Horizonte, the west is bankrupt (which makes Horizonte a lot better investment for example than high street banks, airlines, or other institutions existing on wafer thin margins).

Inflation will be explained away to the masses it is the way of the world. Just change the basket you measure that usually does the trick.

Gold price creeping up, and with each gold pour Goldstone is producing more and more gold (alright only 2 pours so maybe a small sample). My position is 5m shares average a tad north of 10p but not much am I an idiot - maybe maybe not because as an investor (not a trader) I accept I will never catch the lowest price but neither do I sweat the being underwater (unless the investment case changes). It may take a year longer than I'd liked, maybe even two, but target remains anything from 25-50p on a multi year view and/or dividends to boot. Agree next few months are critical - will they nail production now they are up and running. Gold price only going one way with inflation US/UK anywhere from 7%+ (real inflation not the b****cks central banks publish). GLA

TD2 yes I was surmising you thought that kind of area might be acceptable now (hence PIs would be disappointed) to the IIs. I would be disappointed with those numbers now. I would take 15p now happily mainly because over the same timescale I care about (2-3-4 years) I can probably try to get a similar return elsewhere to what I envisage for Horizonte particularly if we get a 2.5x on todays price right now. I don't know of the likelihood of a bid either but we are definitely cheap right now as an mcap (accepting the IIs who paid 7p would certainly not take 6p in a bid) and it feels odd to me that there isn't more news. It could be something brewing on Vermelho but I don't see why some big discussion around the future of Vermelho (be it under wraps) would preclude operational updates on Araguaia if there was something to report. Anyway time will tell I suppose.

That said I do agree with Bwanas earlier post that of the rest of the equity it is likely not all went to sticky hands. Sure there is bound to have been quite a lot of PI selling after the dilution but once the new shares were issued there will have been lesser insti's that would already have taken the hit and moved on. There must be plenty willing to chance that with the backing of Orion and La Mancha they can make a quick buck on the raise, and having realised that isn't the case, taken it on the chin. Maven possibly being one of them.

TD2 I do disagree on the value to be realised from a sale. Main reasoning is as follows - for Horizonte securing the finance, they had to raise multiples of mcap. That necessarily (and unfortunately) puts them on the back foot - all the parties know they can't build the mine without the finance and banks won't lend without equity.

A bidder now isn't dealing with Horizonte, they are dealing with Orion and La Mancha (and other). The decision for Orion and La Mancha is simple - take what is being offered today, with no further risk that the mine doesn't get built and executed, or trust the management to deliver a working mine for the original multiple they had in mind with a 2-3-4 year wait. At that point they have a working mine which a buyer will have to pay a premium for so they won't sell at that point at a basic valuation.

So the question becomes what price will Orion and La Mancha accept today to forego that return (and the risk) they have taken with their 2-3+yr investment. I am not certain but it would be interesting to see what if any examples there are where they have sold out soon after taking a big position in a company. To get another investment in a company like Horizonte would mean they have to do months/years of DD. They aren't going to do it for a 10-20% return. So I don't think they will sell Horizonte for 8-10p, I think they will want more and I think they will be happy to wait. That might mean a bid at the moment is unlikely, but if there is a serious bid now I think it will be have to be seriously above 6p for Orion and La Mancha to even get involved. GLA

Ivor do you mean the share price was higher 9 years ago? That may have been the case but there were a lot less shares in issue so thr mcap has grown considerably reflecting the progress thr company has made towards production not least of course securing thr finance. While I was a bit disappointed with the level of dilution nonetheless the financing was a crucial milestone and places Horizonte around 2 years from being a producer at a time when nickel stocks may just have run out. It is an exciting time. I am intrigued we haven't had an operational update and there must be a decent chance majors see us as a sitting duck at $300m mcap with $600m finance secured. Disappointed by the sp also but that can change - and quickly. Gla

Also we should hope $600m+ secured funding adds to the valuation so Araguaia even before mine build is now well past DFS stage. But it is only a third of the resource or so. I would still think whichever way you look at it we shouldn't sell for less than $1bn.

Onca Puma sold for 23c/lb nickel in the ground. At the time JM thought that might be a high watermark and he suggested 15c/lb might be realistic at DFS stage.

https://www.proactiveinvestors.co.uk/companies/news/52941/nexus-energy-in-trading-halt-don-voelte-resigns-as-chairman-52941.html

Now markets shift, price per pound changes but we are entering a supercycle. We don't have DFS for Vermelho yet, but hopefully soon will have and the studies by Vale should make this a PFS++ already.

At 15c/lb in the ground the 4m tonnes of reserves for Horizonte would fetch $1.3bn in a sale. So north of $1bn looks game on to me whichever way you spin the numbers. $1.3bn is ~25p at current numbers. GLA

Montyfino different ways of valuing it but at a very solid nickel price at one point the calculators indicated $7bn NPV Araguaia+Vermelho of which a third is now funded if we consider Araguaia 1 + Aruaguaia 2 self financing from the former.

Then there is the 'nickel in the ground' price valuation - we have 4m tonnes or so plus cobalt, what price for that (lowest quartile production cost).

The asset is worth loads. What would a buyer pay and what would Horizonte be able to extract? The largest shareholders will determine what bid is accepted so that then depends on Orion and La Mancha and others. I'm of the understanding they might look for 3x or 4x on their investment as a ballpark so that would put Horizonte around the 20-30p/sh x 4bn shares = £800-£1.2bn which is around the $1bn-$1.6bn USD area.

There are multiple ways to arrive at a value for Horizonte north of $1bn. I'd take anything 15p-20p now we're diluted as long as it's done quickly and we can still get funds invested into other companies and catch the commodity supercycle. That sounds very feasible (esp now we have $600m+ funding secured) and would see current shareholders walk away with more than just loose change in their pockets. Like the others posting today I find the silence odd and kind of hope there is something big brewing. GLA

Two things I suggest:
- Comparison with Blackrock - Blackrock have 3x the capex (or is it more) it follows they are building a bigger mine so the parallels in mine build time are not necessarily there, there is no reason Armadale's mine can't be built quicker at a third of the capex and
- Enlarging the licence area (with three new exploration licences) surely it's obvious. They will build the initial mine, expand the 'potential' capacity to suit a buyer then offer it for sale, am I missing something? Sell a working $500m NPV mine with potential to scale up to $1bn+? I never thought MB would hang around here forever but I think he wants to get this to production to maximise sale value surely, and having additional proven resource will enhance sale value for sure.

I see todays RNS as a positive even if I want more of course :)

There is a chance we get no dilution at all - I am pretty certain that's what mb wants and that is worth working a finance deal for 6mths+ for. Even if we do get dilution it should be minimal, because of the project irr he can afford to take a highrr interest rate on the loan. Then if npv goes up well north of $500m (I would love $1bn but maybe that is optimistic while keeping capex low) you have to divide number of shares in issue to see the potential. I am very much hoping 30p in 2-3yrs time with some big step gains as it de-risks (finance complete, then mine built). £200m mcap or $300m very doable on the npv at steady state production. All imho.

SJ btw I think our strategies are similar we just found certain shares at different timez. I built my position at hzm over 3 years at acp over something like 18 months. You need to research, then byild concixtion, then go large for real gains. This is gettung on for 1/4-1/3 of my pf now and I think has probably thr bestnpotentialnon an 18 month+ (relatively short in investing terms) view by which point I am certain we will be producing.

SJ I know you are probably building a good position steadily - I think you will do very well. Sadly for me new cash has dried up pretty much personal circumstances but I did buy £7.5k today possibly the last time I will have money before April by which time I hope finance is in and we are well north of 5p.

I didn't think we would have this long to take a position but it doesn't matter in the long run it is only the endgame that matters and on a 2-3yr view this is probably as good as any on AIM you only need to look at Blackrock to see how relatively undervalued we are.

Still think big money is made is accumulating over a long time in structurally undervalued stocks (I did it on Horizonte when ii's were selling) and it is the same case here - why - when graphite is flying, we have the mining licence, we know they must be in discussions under nda for the time we haven't had news, can the sp be lower than a year or two ago? Doesn't make sense so you keep buying. Here it is stale bulls and Kabunga selling and the lack of news. But with a huge irr (it was already huge before they revise it upwards with a revised basket price etc) and a short mine build and a modest capex there is simply too much money to be made on the opportunity not to be invested. Gla

There is of course further upside from gold prices rising. Any number of factors can be a catalyst for that and my personal opinion is it will go up in the next few years (no idea what to but $2k+ for sure). By then hopefully we are a producer, and have done all the further drilling and it's dividends time....