Member Info for wasarunner

They are complacent, that was evident from the (tragic) mine collapse. I don't know if they are psuedo national in any form but some of the really big miners smack to me of complacency - for e.g. Teck being one of them. You have to change approach once every 30 years or so - fine, miners have to make big investments and measure results in decades, not years, but how did all these big boys not see the 2020s coming when we were in the 2010s. When was the first Tesla built and what battery did it run on? Wasn't the writing on the wall?

I hope our strategic partner is a 'nimble but large' player. If they exist. GLA

https://www.business-live.co.uk/manufacturing/rare-earth-team-meet-government-21757661?utm_source=twitter.com&utm_medium=social&utm_campaign=sharebar

sounds good. Apologies if already posted.

Thanks RosyLee as ever, valuable insights into the financing side. I echo Bwana's sentiment please keep posting even if you don't invest here, this is clearly a complex deal (financially) and the devil will of course be in the detail - having someone who can shed some light into the inner workings is very useful indeed! We should find out soon enough the terms of the full deal.

RosyLee thank you, very useful to know. I am guessing the banks get further reassurance that they won't need to reposess if the partner is a miner (for e.g. Teck or Glencore) with proven capability who then take 30% of the equity? They have a kind of ready made plan b. If Horizonte mgt fail to deliver the working mine. A shareholder with deep pockets and ability to finish the job.

It's not unique to ACP, it's all juniors (at least the one I'm invested in) at the moment. Sell the anticipation of news, then sell the news. Horizonte announced $340m debt facility (lets put that into context - nearly 10x Armadale's capex) last week at Lib+1.8%-Lib+4.75% so an effective commercial loan interest rate around 3.5%. £340m at 3.5%. What did the SP do? Why tank by 10% of course....

sometimes you just gotta take it on the chin in the short term, know you're right long term, and wait for the market to catch up to your thinking...

When I mentioned two reasons the banks might lend at what I believe to be fantastic terms:
- excellent project economics
- very good BOD who can deliver
I did of course forget possibly the final and most important point:
- they can see one or more, super solid counterparties to the financing

I don't care how good the project is or how good the Horizonte BOD is, they simply would not be able to get LIB+4.25% on those credentials alone. So now we know the banks really like the other people at the table, and we are told by people who understand this far better than I do that the equity will carry the overrun risk (cue the strategic investor). This tells us that the strategic investor is a BIG player, and that the banks are very happy that they can fund the overrun. We also know that JM has mentioned Tier 1 counterparties on calls and to investors. I am very comfortable knowing the banks would only lend at these rates if the other entity is big (dare I say it, among the biggest) in the business. GLA

WaitingRoom - fantastic proverb I haven't heard it before.

Arguably in this case the best time to plant the tree is now - it is now clear that there will be a big shortage of trees later in this decade. And Horizonte have raised around 2/3 of the capital required to plant a Tier 1 forest. So you could have planted your trees cheaper a few years ago, but you are more guaranteed the outcome now (and your trees would have whithered and re-sprouted a few times along the way if you had invested sooner - don't we know it) GLA

soundbuy the timestamp is Friday so that big trade would that have taken us down to the 8p area on Friday, with a sell below it? Would't have thought it would account for todays movement? It's a chunky sell!

Burleigh - it is nearly a given that the cornerstone will get much/most of the equity. My money is Glen or Teck. Apparently they may raise some via the market too so there will be an RI. I think it will be a small one because offtakes+cornerstone leaves very little to raise to get to the number. How long you got? I'm not sure, maybe a month, maybe two. What will the SP do in the meantime? Who knows. I'm surprised it dropped to the 8p area I do feel 8p area is absolute bargain because the last raise was 7.5p and I think the cornerstone will pay higher. Good luck with the investment.

On an aside (or maybe related):
https://twitter.com/darrenhazelwood/status/1443992031261564929

If we believe these charts, the next commodity supercycle is around 20 years long. Commodities are at historic lows vs equity markets. It is a bloody good time to invest in commodity miners who will go the distance. Hopefully we are one of them - I kind of hope we don't get taken over, I would like to hold these for 20 years - kind of the period I care about. GLA

Hi Mininginvest, simply put, stock market doesnt publish this information (whether buy, or whether sell). Therefore websites and platforms, like this one, infer it from the timestamp and what was bid and ask at that time, as the other poster said.

Working out what was actually a buy and what was actually a sell can be quite tricky it seems to be a bit of a dqrk art depending on which wqy price is moving. I dont even bother I think people with l2 and rsp access probqbly have a better idea. Sometimes it is really obvious though - fir eg a huge trade below the bid or above the ask.

Welcome onboard! Going to be an interesting journey.

Hi Smoggy, I'm not an accountant either :) So an accountant may correct us both. I think the reason your calc looks high is you are using EBITDA. So the definition of 'profit' is ambiguous here - EBITDA ignores tax, and it ignores interest payments. There is still a wedge of interest to pay on all this debt, but of course the terms are quite good. So NPV corrects for those factors because it factors them in which is why I think often it is used as a benchmark to say 'what % of NPV is this company trading at'. So your number looks reasonable if we didn't have to pay debt interest and Brazil didn't charge corp tax. The difference between the 50p and the 30p could account for those factors.

Reality is these calcs are all based on how the market _should_ value a co based on normal market conditions. We are all hoping of course that it's panic stations Mr Mannering by the time 2024 arrives and nobody knows where the next load of nickel is coming from and maybe we can be valued above NPV who knows.... the market is very irrational - as we have seen with todays sell off.

Smoggy, your analysis makes a lot of sense and agree with a lot of your numbers, I too am hoping closer to 2.5bn now than 3bn - it looks very doable and the BOD have played a blinder (so far).

The production figure looks high to me unless you are factoring Vermelho in. It is maybe safest just to base a production figure on Araguaia for now - 50p would equate to $1.75bn USD so quite a substantial chunk of A1+A2 NPV (bearing in mind that miners rarely trade as high as NPV), would the market give us that before we've financed/constructed A2, I suspect not.

My own target just on A1 is a more modest 30p which is close to 100% of NPV of A1 at $20k/t but I am expecting a much higher nickel price by early 2024. I am expecting A2 to figure in the calculation by then that the market ascribes, but not obviously at the same % as A1. So 30p may be reasonable middle ground.

Vermelho as I've put on another post can add an awful lot to the SP in coming years. Even if we only retain a % of that particular pie, it is a mighty big pie. It can easily double our SP in due course.

There's two way of viewing institutional sellers, as is the case here with the warrant conversions and in paricular Kabunga's position. We saw the same on Horizonte with Griffiths, JPM, City Financial.

1. They're all bar stewards. They don't understand the need of the common man, that they should be the backbone of the stock, reduce liquidity, so on every positive development gets bought by new investors and the shareprice only ever goes up.

2. They are the gifters of cheap shares which for substantial periods of the juniors lifetime allow cheap entry (vs level of development) for investors with sufficient time to wait them out.

I tend to view them as the latter. I have already benefitted to the tune of god knows how much on Horizonte from this kind of activity and in a year or two I think we will look back at this and say 'gift'.

I agree it doesn't help financing too much but if MB can get this done without serious equity (which must be the plan, given the lack of news to suggest we need a much higher SP to get it financed) then so be it. I'll wait 18 months, Kabunga will be gone, and we'll be 20p+, and every single share I bought at 4.x, 5.x or even 6.xp will be 'well in the money'.

This is currently my no1 target share with new money. Now I just need that new money.
GLA

Finally had time to look at the DFS. Interestingly the detail on A2 is removed in the updated document.

Original: https://horizonteminerals.com/news/en_20181212_araguaia_ni_43-101_technical_report.pdf
Updated 2021: https://horizonteminerals.com/news/20210401_HZM-Araguaia-Project-NI-43-101.pdf

Section 25.3.2 retains the high level blurb but the subsequent costings including capex for S2 are no longer there.

I guess this is fair enough - it wasn't prepared to 'DFS' standard that was specifically noted in the original document. I guess the original study being completed in 2018 will need revision if S2 construction commences end 2023 / early 2024 and that's fine. What we need to know is - capex will be much lower than A1 (the main infrastructure all gets built in the first stage), and that there is sufficient nickel at sufficent grades to support 29kt/annum, as the nickel grade was from proven reserves. All good. We will get more precise costings as they start to limber up to financing that project.

Thanks Rover
>>So for someone with 20 million and the BOD giving $5,000 that’s a dividend of $1 million.
Indeed I've done that calculation myself :)

Did we mention - that's without Vermelho :) :)

fulmar - and indeed - he who I won't name I suspect has lost money on both sides of the trade. The old adage wealth being transferred from the impatient to the patient. All IMHO. The big boys will start buying here when the full financing terms are known, no doubt about it. And this idea that selling now you can pick the date of the RNS is nonsense - you don't know that the equity isn't being announced it could equally be likely next Monday as a Monday in November.

Or, if you are a conspiracy theorist, VWAP starts now CA has landed and our seller needs a lower price for it :)

I can. Many 'invest' for the opportunity to trade out on news. I know one such person must have sold a pretty reasonable chunk and put it elsewhere yesterday. I shall not name him - no point anyway and many will do the same.

So - you have to accept that and if you are investing for the long term ignore it. I am trying to do the same with ACP where our relentless seller is selling down one of the best prospects for (now permitted) graphite mine perhaps in Africa. The price there is less than the pre-permit high. And permitting was the key milestone there, just as credit approval was probably the key hurdle here, to getting full financing agreed.

So trading and traders notwithstanding, today is a far better investment opportunity than 2 days ago (when ironically the price was higher, with more risk). I think once you get your head around that, you realise that these are the opportunities seasoned investors wait for - less risk - plenty of reward. Horizonte is no arguably a much better investment 8.5p -> wherever it is going on production than 3p -> 8.5p because the path from was very uncertain we didn't know when and if it would happen. We will soon here have a very specific mine build with dates on it and you can start factoring your multiples of SP with a pretty good degree of certainty.

I am seeing both Horizonte and Armadale as excellent opportunity at present - low risk, high return. And a couple of others. AIM generally at the moment seems quite weak on sentiment - I like such opportunities for entry. Now where did we get to with that business sale again....

Oh and BTW as I posted on twitter, I think a lot of people don't really understand the credit terms or just aren't interested in them and that smacks of trading it for the news. The credit terms are excellent. As a seasoned veteran pointed out there are Moody's rated miners not getting such terms. That the banks are prepared to lend at these rates - immediately improving cash flow at production - is testament to the project economics and the BOD for securing that deal.

SJ really like your posts you post it how you see it.

I think you can expect a lot of news in the next 3 months. The fallow period for news is over. From my conversations with SR, over the last couple of years. the banks were the 'problemo' - in terms of their pace, and appetite (during Covid). Apparently the financing centre is NY and the Horizonte BOD not being able to travel also made this more difficult. We have to remember nearly half of the debt is underwritten by the ECAs so further parties into the discussion. The most complex, and definitely the most time consuming bit, is done.

I'm expecting not just financing news in the next 2-3 months, I am expecting to see engineering news and plans. The newsflow is going to ramp up - I think we are guaranteed that. A very very good time to be invested, fasten your seatbelts. But relfect that the BOD have delivered _probably_ the most complex piece of this very complex deal.

I think that is so significant it is worth repeating.

The company yesterday got credit approval for just under HALF of the total $711m required to build both lines of Araguaia. A mine which would produce $720m gross turnover at nickel $25k/t. Half of the TOTAL CAPEX. Who would like to bet they won't get the other half sorted? I wouldn't take that bet.