Member Info for wasarunner

Craig - because Horizonte goes 'ok we'll give it to BHP then'?
Sellers market IMO.

The only thing I don't fully understand yet about Homase which I will have to read up on is mine life - if you work on valuation on p/e you have to make sure you have earnings for sufficient years. I know Goldstone plan to do further work on this to extend mine life, does anybody have any further info? If you are only producing for a few years you can't obviously value on forward p/e in the same way as you do for long term steady state production.

But notwithstanding the above, lets get to production first, get that FCF going, and start the further exploration upsides etc. GLA

Ivor - yep. Teck take a CLN for $125m cad or $100m USD, cash goes to Horizonte, Teck later convert to 700m shares or whatever. In next 25 months. Banks happy.

Ivor - I think the banks need to see it fully funded now. But say the CLN will allow the remaining capex to sit as debt for now, until SP goes to a level where the strategic wants to convert. Somebody on twitter replied to me to say maybe the conversion has to be forceable so it doesn't sit as debt liability forever on the B/S. I am not taht technical in corporate finance to know the structures but for my money this allows a mechanism to issue shares at a higher price - which I think an investor like Teck needs as they can't go over 30%.

Or we just get a great big bidding war in the coming months. Why would another major not try to come in now? Still very cheap.

On NPV valuation if we got say 40% of NPV of just Araguaia (A1+A2) in a post finance valuation. At 2.8bn shares I make that $2bn USD NPV ~20p sp. That's a very viable first target. A bidder would have to offer more, and offer for Vermelho too. Minimum takeout 30p at the moment? Perhaps.

This Prospectus may qualify for issuance Debt Securities, or Securities convertible or exchangeable into Debt Securities in respect of which the payment of principal and/or interest may be determined, in whole or in part, by reference to published rates of a central banking authority or one or more financial institutions, such as a prime rate or bankers’ acceptance rate, or to recognized market benchmark interest rates such as CDOR (the Canadian Dollar Offered Rate) or LIBOR1 (the London Interbank Offered Rate), and/or convertible into or exchangeable for Ordinary Shares.

The last sentence suggests to me this approval allows for the CLN. GLA

FTC - I don't know the technicals but my assumption is INCLUDING the shares which are fixed number in the CLN, they would be UNDER 30% by dint of the fact the price is higher than current price on the new shares - i.e. 11p or 14p or whatever. So I'm not saying it avoids the calculation of % of securities in issue, but it enables them to go higher on price and not take shares right now. Sorry about the caps just emphasising the bits where I think the CLN helps. They still have to include the 'option' in their calc but because they have less shares - by virtue of the higher price - they stay under 30%.

FTC - the convertable wouldn't get around the problem in the sense that they can't issue more shares, but it gets around the issue that Teck don't want to buy shares right now at 11p, but are happy with a loan note which can be converted into shares at 11p. It gives them a future option at 11p. For now it would just be debt. I think it is a very viable mechanism for agreeing a higher eventual issue price that's all. So it only gets around the 30% in the sense that they can agree to limit their stake to 30% by agreeing a higher than today market price.

Popuplights - I think it means in the next 25 months HZM can issue up to $125m Canadian dollars ($100m USD) worth of securities on TSX in various forms but equating to shares. It is an uncannily close number to what we believe the strategic investor is in for so all the speculation is a. the strategic investor wants their shares on TSX/Canada and b. the strategic investor is canadian. Which points fingers towards our largest shareholder....

My calc was if 'others' got shares at same price as the strategic which of course is unlikely if strategic is placed higher, others are likely to take equity cheaper. But I also think $50m usd is an overestimate so it still kind of works. For e.g. you can issue to Teck at 11p, issue to others at 8p (around $35m) and still end up with the same result as my calc - the lowest Teck can go is 11p to not go over 30%.

I don't think we will see my 'worst case' scenario of 3bn shares. It will be better. How much better we will find out soon no doubt!

Here were my calcs summarised. Assumptions were - 1.8bn shares inc options pre finance. Strategic gets $100m USD all equity, others get $0/$50m USD. On balance I think there will be other equity, maybe not as much as $50m but we will see. No guarantees other equity is at same price as strategic so other equity could be less $ for same shares.

By my calcs the various existing majors could take the following price and not go over 30% based on the $0/$50m to others:

Teck - 14p/11p
Glen - 11p/9p
Orion/or another non shareholder - 10p/8p

Little bit of rounding in the calcs above.

Assuming it was Teck, assuming others got equity at same price £107m GBP gets raised at 11p = 970m new shares bringing total inc options to ~2.8bn. I can more than live with that.

So Teck won't necessarily want to take equity now at above market price so the CLN solves this for them. They know it will be worth a lot more than 11p in the future so they would be happy with a CLN for conversion at that number.

There is a little bit of variables above but I'm very certain we end with a lot less than 3bn shares if Teck is the strategic. It was best case scenario on dilution front. And lets not forget raising $500m for a junior is borderline unheard of so it really is a big deal that we get the 'best deal'. GLA

Cln. By my calcs they could do 12p or 14p depending on how many were issued to others. A cln allowes the price to be higher. Teck is our best case scenario on dilution front.

Soundbuy not if its a cln. Teck cant take too many shares at current price and not go over 30%. Cln enables that as they can issue higher and convert later. Its debt up to that point.

Haha or it could be 7am and lse is slow to update :) As Morpheus said to Neo in Matrix "do you believe it now Neo?" Very exciting. Teck for strategic, for me.

Next rns might be timed to overlap tsx with aim? If it affects the canadian listing i.e. pm? Or it could be 8am of course. I still think this news makes it likely Teck is the strategic. 25 months gives them the option to issue it as a cln, with conversion happening down the line. 25 months takes is up to around or just before construction completed on the mine. Gla

74m gbp is what around $100m usd. Hmmm. To list shares in canada. Which miner is canadas third largest miner. Who is the strategic investor. Weren't they going to invest 100m usd. Hmmm..... :)

Happy because third largest holding grl is near to derisked, equivalent news on horizonte was when the debt was achieved. Its all about risk. Ironically my second largest investment acp is the least risk now it has a licence (on account of the low capex easily funded). I am expecting a bumper november on news and I expect to know an awful lot more perhaps all of the horizonte finance deal? Going to be a strong end to 2021 after a long year. It has felt like a long one anyway. Gla

notready1 you might be right! Personally no intention of moving between them have a decent position in both, both will do well, but of course timing is fickle and anybody's guess! I've positioned my Armadale holding 'for production' so short term selling is noise - Kabunga will be long gone IMO by the time we are producing.

Still hoping to pick up a few more here as on an 18 month view I think it could actually outperform Horizonte (but to be transparent I'm very bullish on both so it's all relative!) My leverage here is £90k/penny rise so really looking for that 15-20p(+?) production figure.

It's actually a nice problem to have, I know this won't please existing holders, but right now you can buy a bunch of quality quality stocks on AIM which will do pretty damn well in the next 1-3 years, at similar valuations to what you would have paid a year ago. So nothing has been priced for the developments inbetween - for e.g. in Armadale's case the licence, in Horizonte's case the partial funding. GLA

Rover - my understanding is it was planned to be after news (which suggests news was likely but hasn't landed yet). So hopefully next week? Hang in there folks! Good weekend all.

Tardis - I do agree. It's one thing people with connections to MB knowing the lie of the land but it doesn't attract new investors or keep the existing shareholders abreast of developments. Hopefully this all changes (soon)! I do hope when material news regarding things like Feed, offtakes etc. lands we can have the supporting PR to go with it. We need all those things - interviews, publicity etc. to get the word out there. Only positive so far is cheap buying opportunity but even the most patient get exhausted at some point...

>> 8.3.looks like this is where it will sit until rns.
Haha. That was the switch flicked :) If I post a message saying I think it will do something it always does the opposite half an hour later.