Member Info for wasarunner

My prediction (I guess I meant when equity gets announced) for the prevailing shareprice is starting to look pessimistic. I would be super happy if equity gets done 8.5-9p area as a discount to prevailing, maybe we can get to 10p now? Probably some of that will hinge on the offtake - what component that provides.

Still think the cornerstone will be a re-rate event in and of itself but of course if the cornerstone entity is announced at the same price as the equity they are buying then it won't lift the price ahead, which is of course how they want it. Very very interesting now to see how this plays out here...

I had thought $25-50m ECA therefore the announcement is super positive in my view. When SR talked to me about ECA he said 'long tenure at low interest rate'. My reading of this situation now is it massively improves Horizonte's cashflow in the first few years of production. My read across is that they can get stage 2 financed more quickly - if they are mainly covering the debt from the banks in the first few years, but the bank debt now is only slightly more than half the total debt.

So todays announcement for me brings forward Stage 2 somewhat. Wonder what other gems we have coming? If we get offtake taking out some remainder of the capex (either via the cornerstone, or any other offtakers) and equity gets done at a higher price than we'd envisaged, these are all going to be huge re-rating events. The market has been pricing for a duff deal. I really don't think we're going to get one of those.

As I said ahead of the news, who is going to sell? Surely now everyone waits for finance package complete so those on the sidelines are going to keep buying higher. And once the finance package has landed, institutions start buying. This is the easiest hold now, ever. Its simple - don't sell your shares now for 3-6 months until institutions have taken their positions then consider your slice. Maybe slice on a spike but I don't necessarily think we'll get one. GLA

I agree. In my experience holders don't tend to talk their investments down especially when the indicators are, it is going to do well. You should always treat all opinion on BBs as just that - opinion. I like a reasoned counterargument and absolutely fine with it, or even pessimism 'equity will be done at 6p' but there are two types of de-ramping - the not so subtle 'you're all fooked equity will be done at 2.5p with an addition 3bn shares' or the type we see on the Pensana board 'you're all fooked the stuff is radioactive and can never be shipped', and the less subtle type. I've seen it on other boards where people clearly sell, then disappointed it keeps rising. If you sell that's the chance you take - that Glencore isn't making an offer for the whole company in October at 25p/sh. All IMHO. You have to have no regrets when you sell. I sold EUA at 11.5p and didn't regret it because I prefer Horizonte. Surprised it kept going strongly to 40p but that's all - no regrets. The only way to guarantee you are part of any ongoing rise is to keep hold of your shares and hope they do that.

understood sprinter have to confess I don't think I've held a share 8 years - maybe barclays or BP. Yes expect that has been painful hopefully you are close to rewards now (well relative to the time already invested that should certainly be the case!)

>>Who do I have to visit to get your funds released sooner?...Ha
Sadly not the Ms if only it were so easy :) It's with lawyers at the moment and apparently they take just as long as they please sadly.... meanwhile all the buying opportunities are rising!

Also just to add - I am very aware this now presents a challenge to Matt Bull and the company because they have to try to bridge the value gap from £25-30m to £50-60m before they do the equity. This would of course be much much easier if we were already higher. So it is definitely not great for the company that Kabunga has been selling for a long time BUT I do think they can make this happen.

I'm expecting a staged financing deal to give confidence to the market that the deal will complete on good terms, and this will build confidence and find buyers. Also an indication that it will complete relatively quickly - next few months. Finally some appointments - we hopefully get some big hitters for the operations and finance roles. The offtakes of course will also help.

We will see but I expect the value gap to close in this calendar year, at least to a level which is much more reasonable. We can fully catch them up when producing as our product is at least as good as, if not better, than the competition.

Also another thing - if we know debt completes, we KNOW the other bits will complete because of what JM told us - banks won't sign unless they KNOW the offtake is thereabouts as is the equity. Therefore the debt signing off, with a holding position on 'offtakes just fine as is the cornerstone' tells you 100% deal is going to complete. So for me, debt closing is the signal the deal is in the bag barring the final tweaking of numbers. What's that worth on the SP? +1 to +2p? Should be easily?

Sprinter - don't disagree with anything you say BUT...

...the flipside is it provides opportunities for someone like me , who only found Armadale in the last year or so, to build a position. Just checking my trades my last buy sup 4p was 2nd March this year. That means in 6 months I was able to generate a 50% upside. This is the attraction of AIM of course. Because of the sellers, because of uncertainties etc.etc. you have the opportunity to profit from that.

I'm not saying that is great for long term holders to be stagnating SP or worse, underwater, but I experienced it too on Horizonte - I was £300k down at one point with RG selling. You need to be firm in your research and of course have spare change but my solution to that problem was to keep buying. I'm relatively new to AIM (3 years) but the clear opportunity it presents is very much a feature of the imperfection of this market.

Anyway FWIW for my money now with where Armadale is, the Kabunga factor is a vanishing thing - with the remaining holding and the new liquidity and the newsflow expected he can be taken out relatively painlessly.

If we're still at or around 6p when my funds land I'm buying. My first target is 100% upside from that number at finance complete. No intention to sell any at that point but 12p fully financed would do me just fine with then the target 25p ish on production. GLA

Big caveat - I may be 100% wrong.

Debt will complete this month, but the other bits will come later. This is not necessarily a bad thing (I certainly won't view it so any more knowing now what I know about how these finance processes work) because I DO think it can work in our favour to improve the equity price.

We have had it from JM that debt needs to see the equity and vice versa but these deals can be materially negotiated then finalised I think once one or other component is in place. Particularly if the cornerstone is very keen on the deal as I expect to be the case here - they will be somewhat malleable - certainly more so than the banks.

My expectation is offtake & equity end sept/october with the build starting later in Q4.

The above gives us a very realistic ambition that the equity will be done:
a. certainly at or above the last raise price 7.5p and
b. with a bit of luck a decent chunk higher, as people say, maybe double digits (though personally I doubt it, but higher than 7.5p would do just fine)

So there will be a bit of a wait here IMO still, maybe 5+ weeks till everything in place but that is still not a long time in grand scheme of things. I suppose a question is how high will the market go before the bits complete. Well debt secured is a big de-risk step and with what we know about the cornerstone I would argue pretty much 100% de-risks the finance as the cornerstone seemed happy to put up most if not all the rest of the capex. So debt funding should provide a boost to SP - 1p+ at least? They can then negotiate the price on equity from a position of strength perhaps even factoring in some discount and be left with numbers which are more than palatable to existing holders as well as the cornerstone and other IIs.

What we know is, with nickel now solidly through$20k/t, all parties will be very focussed on getting this mine into 'build mode'. Exciting times indeed. Will I top up next week? Don't know yet, see where the price takes us and if any news lands inbetween. GLA

You absolutely need sellers because otherwise there is never a bargain to be bought. Special thanks to Mssrs Kabunga (ACP), City Financial and Griffiths (HZM) and of course PIs who bailed early. Absolutely nothing against sellers and everyone needs their money for something else, other investments or whatever. Nobody holds Armadale shares because they look pretty. As a buyer with long term hold ambitions sellers provide opportunity and I am grateful for them! There is nothing wrong with a 10-20% profit either per se I just never understand it when the much bigger profit is imminent.

"oh dear the debt is taking a while but your offtake just went up by $250/t. And the shareprice is up a bit so the VWAP just got higher" I think Horizonte in a very very sweet position with nickel crossing the $20k/t -> we are looking at 10 year highs soon. GLA

My thoughts are - the basket is understated in the NPV but it didn't get upgraded in this presentation (but could have done). The peer comparison for pricing used in calculation Armadale is the lowest. When this gets to production (or even offtake?) I expect a revision. I'm expecting NPV more like $600m in due course...and lest we forget, it is still only 1/4 of the resource.

Lawrence I do agree with most of what you say (I don't know about $35k but definitely much much higher nickel prices ahead - esp due to inflation) except the 'Mr Market Always Prices Future Value' - this bit I take issue with mainly because I find it odd how imperfect the market is. The market seems to price 'here and now' and this is why we, the lowly PI investor, have the opportunity to buy ahead of time knowing what we belileve will take place then. Woodmac already had quite juicy forecasts for the next decade when I started buying Horizonte in 2018 at 3p and I was thinking 'why isn't everyone buying Horizonte'.

The brilliant thing about the market imperfection is, when the market realises it got it wrong, we overshoot. We see this in every bull run - uranium, commodities, gold, crypto etc. You just need to hang onto your hat (or shares) when that happens. I guess the question here is, are we there yet. My guess is a couple of years away yet but it doesn't matter - the main thing is Horizonte is a solid independent entity when it happens then the buyers (of either shares, or the company) will be paying premium premium - far more than the 3p or 7.5p we paid.

You would think majors would take early positions but apparently not. I might be surprised and we might get sold this year (or early next). Myles Mc on twitter certainly seems to think so.

>>The ceiling for value added news is now 6.
>>Not enough momentum to push this over, unless finance is agreed which should super charge the SP.
>>As their is no official finance timeline I anticipate this will trickle back into 4's.

Therein lies the fallacy of watching the historical chart and this is a traders way of looking at it. Traders sold Horizonte at 2.5p arguing that the rise from 1.7p had run its course. A year later we are at 7.5p and probably a rerate into double digits next quarter.

I think this view misses 2 important points - we were at 4p BECAUSE OF KABUNGA and also because we didn't have a mining licence, which creates uncertainty, doubt (over at least timescales if not outcome) and people got bored. The two material things that have changed are: 1. Kabunga is still around but in smaller size and the volume/mcap is now higher and if he wants to sell, he will be taken out 2. We have the ML, the rest is entirely in the company's control and we WILL have updates in the next 3 months - plenty of them.

There is a place for historical charts but after gamechanging news isn't one of them. I think if Kabunga keeps selling, he will get churned - we have enough buyers and the company will provide enough news in the weeks ahead to churn him. As for other sellers - they may take their profits and move on. Or, they can wait 3-6 months here to double (or more) their money. You takes your choices.

Glencore sold shares (and their resource in fact) to Horizonte at the low point in the nickel cycle when china had flooded NPI and we were ~$10k/t and lower at times. As did Teck as did Vale. We are entering a whole different market now which these entities will be positioning for, ironically, re-buying resources at many multiples. Of course, Horizonte did a lot of work in the meantime on the permitting et al which of course these entities will have to pay for if they take a stake here (or more).

I don't think we will see sellers of nickel resources in the next few years, certainly not majors, we will see buyers. I expect a major to be the cornerstone and we will see what transpires then. Lawrence's estimate might just come in in that scenario!

Assume he meant beer but I have no beef with beef either... I like both.

BOJO - have to confess being not a seasoned investor in 'junior' markets I didn't really know about this phenomenon but it certainly seems real and I have heard it from other sources too. With FTSE investing I tended to ignore it anyway as I was sitting in positions for years not months (and always assumed it was a dividend driven thing - many FTSE stocks decleare divs Q1 early Q2 so I assumed the lull was ex div anyway).

It is worth knowing for future years as it definitely seems to be a good time to put fresh funds in. Always buy when there is the lull so to speak.

Agree with your comment too about not knowing future pricing all we can do is estimate based on facts we know or anticipate - the one I have never got to grips with is that amorphous blob 'sentiment'. The more optimistic (than me) on this board are telling me that sentiment will be high after financing and that drives the SP further north than perhaps otherwise would. Being from a maths background I can't easily quantify 'sentiment' but I definitely find NPV / asset / P&L calculations easier.

I think everyone who is invested here will do well, probably both short and long term! GLA

Just on Brazil - yes there is some political risk - elections and next year and Bolsonaro is clearly a d**k. The US also handled covid badly and (probably) their president lost the election as a result of it. But business continues in the US, and I think business will continue in Brazil and mining is a huge industry in Brazil. I'm reasonably relaxed about it but freely admit it is the aspect I understand the least about the investment. Where is owlo/bluebudgie when you need them with the regular political updates....

>>In terms of the shareprice it is hard to call it undervalued
sorry overvalued I meant.