Member Info for wasarunner

>>Artisanal nickel mining
Sorry probably shouldn't joke but isn't this how Tesla get their cobalt currently for their batteries? Obviously that needs to change - queue Vermelho...

I'm a software engineer and completely useless at practical things but if the mining is as easy as pickedpeck says it is (i.e. you order a small furnace off amazon, then head over with shovels and wheelbarrow) then if they don't get it financed and start building by Q4 I suggest we book some tickets out and start shovelling it ourselves. Apparently at the moment over $1bn of nickel under the ground is mine and I want it out damn it....

I have no doubt equity will be issued my question is simply - who to. Strategic (only?) Other IIs (as well)? Lowly PIs/existing holders, or even a more general market placing? We will find out.

"then this is the catalyst for finalising the other components of the funding, the offtake, the strategic investor."
There is a notable (by its absence) mention of any further equity component or market placing. Is all I'm saying.

Though the language in the snippet does to me read that the other components of financing news (other than debt) will be later, not in September (perhaps October) as 'you can expect a steady stream of news flow linked to each of these pieces as we move through to the end of the year'. One of the pieces being 'start of construction of Araguaia.

My best guess is - other financing pieces in October, start of construction in November/December. GLA

If they do at discount but the strategic is not all equity (for eg Glencore, 8p equity $70m + $30 prepay offtake) works, especially if as Craig says they do further market placing same price. That wouldn't take Glencore over 30%. By my calcs pure equity $100m strategic and $0/$50m others assuming same price, I calculated Glencore would need 9p if others took equity and 11p if they didnt, to stay under. Personally I dont see Glencore having a particular issue with 11p. We assume they have to have a discount but that ignores what they are buying for that money - immediately $300m shqre of npv plus of course % of future npv for a2 and v.

Watch this space is all I am sating, I could be 100% wrong. The market is definitely NOT currently pricing Glencore as the strategic and taking less than $100m equity. Therefore there is potential for the deal to significantly outperform market expectation.

Do Glencore want to buy Vermelho nickel from Orion? Or from themselves. That is the question I am asking myself, and I come down on the side of 'themselves'. Bearing in mind the lifecycle of Vermelho is best part of 40 years or so.

Perhaps why not Teck, or are they bluffing....no good opportunities apparently.

https://twitter.com/JekyllCapital/status/1440512388294344704

We debated pros and cons of financier vs miner I think in the past. My thinking on this:

Miner is more immediately sp appreciative as the mining space takes note I think differently. Perhaps with a view to funding/building Vermelho as it could signal intent that the miner wants involvement there as the senior partner even if this isn't openly disclosed at this stage.

A financier being involved means if a major wants a T/O down the line they have to tussle for it with other majors who may counterbid? Whereas one of the majors taking 30% now might make it next to impossible for another major to muscle in.

In a way it is a win-win for us investors as there is probably more immediate appreciation in the former scenario (for example for long term holders here who need some cash out in the short term) and for those who are prepared to wait for production or indeed an eventual T/O offer perhaps better terms at that point if the investor is a financier.

We find out in 6 days or so and we're still under 9p! TO be fair we're in the range I called it at the moment so not so shabby. I think on balance I would rather a miner than a financier, not due to short term time horizon but I think we would get more exposure in financial press, certainly mining press. GLA

I only say Glencore because of course they are significant players in the nickel space and I don't know Teck's intents - of course Teck have the bigger existing holding. A surprise to me would be Teck being the cornerstone - but that would be a very interesting scenario because of the existing holding being so high, they would need to take less equity or issue it very high. A win for existing shareholders. Glencore seems more likely but they started with 6-7% or so (forget the exact number post Feb dilution).

Anyway my view is, and hope is, it is a miner not a financier. 6 trading days folks.

Incidentally - still makes me think the strategic is Teck or Glencore, with Glencore more likely. I just don't know why either would agree to another strategic investor taking a significant stake in the project at the equity level. Surely as significant shareholders they would have needed to be consulted and if so what would they say 'sure take 30% of this nickel company from under our noses - we can't afford $100m right now'. Come on. It is one or the other. My money is on Glencore!

>>may just go with the strategic, even at a slightly lower strike price or terms.
Thanks pp - I am hoping this also. NO shares to other insti's through the placing, strategic takes it all. Then if insti's want to buy - they can use the market like us poorer folks. They can have a few of my shares for 30p or so, but only say 10% at this stage. I have no doubt Horizonte will have the terms pretty much agreed on all the other aspects when they announce the debt the question is will they announce it at the same time. Hopefully they will, it has been a long time coming!

I really can't see them going to the market for placing now unless it is for literally crumbs then what's the point if the strategic was happy to fund it all? Would it be to appease us, the PIs? I can't see it myself - for us PIs closing the deal and getting on with the build is surely the priority...

Love it:

"“The energy transition is driving the next commodity supercycle,” said Jessica Fung, head strategist at Zug, Switzerland-based Pala Investments Ltd., which funds mining projects tied to decarbonization. “It is a decades-long transition, but the time to invest and make money is this decade. The time is now.”"

I agree:
- will the terms of the debt make an impact on SP? Probably not?
- we know the debt is 'a given' or the ECA wouldn't have signed. So tranche B is already priced in
The unknowns are the rest - who is the strategic investor, what terms are they offering (equity, royalty, etc.). Not long to find out. How much offtake has been sold and on what terms.
I'm less pessimistic than others here about the build. GE in Brazil next year aside, I think the RKEF build out given the prep time the company have had is very doable. Covid notwithstanding. GLA

Yes I was going to say - you aren't going to learn much from the results. They will show a loss :) Good luck with the investment, definitely not too late to hop onboard!

Burleigh, if you have the time, this is an excellent resource to start. Bit long but you can skip the bits you aren't interested in. Makes the investment case quite clear IMO:

https://horizonteminerals.com/news/en_20210219-investor-presentation.pdf

Cost of production $7k/t and nickel price $20-30k/t is an obvious reason to buy the share - it prunts money at will at production. Sthg like $750m-$1bn ebitda possible on 50kt/annum which is bonkers. I am expecting 5p div a share at some point onwards...

Another effect of minimal equity reqd for fimance which could be viewed as a positive is the sp at which equity is done matters a lot less. That means he can fastrack financing to fit into a timeframe for production and not have to wait around or artificially pump it. I quite like that aspect because it means we can have finance closed here in next 3 months and be looking fwd to build next yead - another derisk step and surely sp appreciation then.

Hi Burleigh. Explorwr about to become producer, forecasr long term nickel at $25-30k/t when Horizonte bought the assets $10k/t combined npv of the projects multi billions $7bn mcap £150m+ and ev is a thing and will need lots if nickel. Thats one sentence, personal sp targets 30p in 2yrs 50p-£1 2025/26.

Enjoy retirement++ then - good luck, close now :)

Hi Strevs well done, think fair to say most invested here are seeing the next few weeks as the final lap or whatever analogy you want to use. I didn't really appreciate (being an engineer) that the biggest hurdle Horizonte faced was not building a mine but raising money to build the mine. Simply put statistically very few explorers make it to producer - some run out of cash some sell the asset. Assuming we don't get sold in the next few weeks then the news last week suggests we are all but there. It is very exciting indeed. Good luck with the retirement planning - I am doing likewise but not quite counting chickens just yet!