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I'd love you to be right, and there are merits to it, regarding confidence of funds driving the sp also.
I like the warrants idea too though, as it also adds funding down the line, assuming the sp continues upwards and onwards. And, as an invstor, you can plan for the expenditure.
Am I missing something here?
Why would anyone buy into a placing at 2.2p, if they could be buying those shares at 1.2p?
One way I might be tempted, is if there were warrants attached, say 2 for each share at 4p each, that could be exercised up to 3 years beyond the placing. Therefore i've got a great future gain if the company thrives.
To be clear, I am already heavily invested here, I'm not trying to be negative, and i'm not selling. Partly because I've missed that boat if i'm honest.
It wouldn't be very succesful I guess.
Wasa. Understood. To be clear, I wasn't doubting HZM's ability to raise the required finance at all. I am talking also of share buying investment, to allow companies to operate at fair, or fairer market value's, which in turn aids their ability to raise funds and grow their business.
The LSE's header for their AIM website says "Welcome to the world's leading growth market", and I think they should make renewed efforts to ensure that remains the case.
Unfortunately, my lofty targets for HZM, and other AIM stocks, appear to be irrevocably damaged by the woodford situation. I think we all know this is a good company, with huge potential, and is massively undervalued. It will also move up when news of funding for Araguaia and a partner / sale for Vermelheo are announced.
But it's, and many others, ability to reach a fair valuation will be reliant on new investment. I see many comments here, and on other boards, that once the selling down is complete, there will be a rerate.
The fact remains that, whilst the woodford sell off is a known quantity, the Liquidity rules imposed on the market is now precluding the ability of funds to move into the AIM space without great restriction.
And that is surely a large loss, that will prevent these predicted rerates, without new money coming in.
There are so many millions sitting in cash accounts earning negligable interest, and personal ISA's, SIPPs etc that could feed this market, if the owners were aware and had some confidence in the opportunities currently available. Of course, the percieved and real risks involved would prevent many, but it would not take too many to shift funds to make these sp's move in the right direction, which in turn would feed a confidence for others to follow?
The alternative is a bit grim, with funding being tight, and many companies in a position whereby their current sp's make placements unnatractive to say the least. I feel for them, and us PI's.
I am completely behind HZM, and heavily invested, but worry my early retirement plan is not coming about as speedily as desired.
Thanks, and yes I agree about how difficult it is to predict SPs on AIM. I have certainly made bold predictions based on what I see the value of HZM, but the market is not in the mood to value promise, even proven resource in the ground.
And then the MMs will play their games.
But allof that will change in time, if the resource is there, demand is there, and the company has the right management to bring that resource to the market.
I'm confident on HZM, but don't know enough about ARCM, so would be grateful for a potted history. I've bought in on reading a bit of chat, and seeing a few investor recommendations.
I'm new to this share, having previously been solely on HZM, but decided this may move quicker in the coming weeks, so have moved 20% of my portfolio here for the short term. Bit of a punt, but looks like there's value to be outed here?
'I ain’t buying anymore of these, lost faith. I’ll stick with what I’ve got. My money’s going into ggp, they seem pretty good at investor relations'
Understood Joey, but it's not investor relations that will have HZM producing revenues and profits in the future, it's the finance deal, partner deals and compilation of construction teams and plans, that I believe JM and his team are hard at work on. I don't need a weekly bulliton from him to tell me 'we're still doing that', but i'm looking forward to the real news announcements when those tasks are finalised.
Joey, you certainly get some stuff right. I certainly didn't foresee the sp getting to 4.1, let alone where it is now.
But i've just run a 10 year nickel average price chart, and it shows £13.7k as the average?
But aside from that, the price will be dependant on supply and demand ultimately. The demand is forecast to be more than robust, and the supply will only be there to meet that demand if it is profitable for the miners to obtain it. Hence, I think the price will rise.
I don't think Orion think it is worthless either, and I'm told they know their stuff?
I think we all know we're a couple of years from revenues if the full development is kept with HZM, but they have already declared that that will not be the case.
Therefore, it's as dependant on whether someone else does find value, and personally, i think they will.
But it's all opinions.
Luke - Agreed. Just to note, JM's CV includes that "Mr Martin has established a number of JV partnerships with major mining companies". Let's hope that number will soon be increasing by one.
Wasarunner, i'm sure you're nearer the mark with your numbers, but i was very simplistically thinking that in 5 years, even with a 50% interest across the projects, HZM could be booking 30k tonne of Nickel per annum at £20k per tonne, giving them £600m revenue and £200m+ of GI per annum? That would produce a decent market cap, maybe somewhere between the £750m that 50p sp gives and my dream of £1.5b for £1 sp?
I should definitely stop hypothesising now, i'm sure my numbers must be skewed somewhere in the dreamasphere.
On the current sp, I very selfishly feel a bit agrieved that new investors can sit on the sidelines and watch all the pieces to this story unfold, risk free, and then still buy in at these ridiculous levels?
Wasarunner, I definitely prefer your second scenario! I do remember Jeremy talking of negotiating and awarding offtakes for Araguaia in Q4 / Q1, and I'm hoping that will account for the equity piece of the funding, and save us all from the dreaded share dilution.
If that happens, they will maintain a strong hand for Vermelho, and a straight 50/50 cost and value JV might give them £400m (again at Onca Puma type value), which would cover their side of the Capex.
That would be half of one and more on the other, and I could then dream of £1 sp in 4-5 years, and a 3p dividend.
My predictions have been pretty shocking to date though. I certainly didn't foresee the sp back down at 4p again!
Bloodshot, i'm not sure the timing works for that.
The BFS for vermelheo is months away i imagine, even with the headstart the Vale info will have given them. Was a date given on the conference call?
I'm hoping the finance for Araguaia is substantially in place already.
Agree that there must be a pretty big seller here, the sp just makes no sense.
I try to imagine the absolute worst scenario, say the company decide to give up on finanacing and just get rid of the projects in a fire sale.
Even in that scenario, it would be inconcievable that they wouldn't receive £200m for each mine, and here we are with an sp of £30m, once the cash was given back.
Still, the value will come through, just patience required.
Watched the Crux Interview again. I like the way JM has stated all the options, and that all paths are still open and being considered.
However, I was getting the impression of him suggesting to the market that someone can come and get Araguia, allowing them to move forward with the real jewel in their crown, Vermelheo.
He talked of Araguia as a robust and compelling (favourite word?) project, but dropped a what if sold for £300 to £500m comment, having mentioned a sale of a comparable project for £850m.
I think they know how good Vermelheo is, and are wary that a split in the Nickel market into class 1 and 2, could see the EV nickel price push on substantially above ferro. They admit that they can't build both projects simultaneously, and Araguia is the one that's ready to go.
They will not want Vermelheo to go on pause awaiting revenues from Araguia, so a sale of Araguia at £500m would allow them to push on at speed, and hit the market at the right time. I know that wouldn't be sufficient for the full capex, but would certainly be good enough to allow a finance package to be concluded. Think he said Vale had worked up a capex of £1.2b for a 40k tonne / annum plant, and that they were looking at 20k /annum, so maybe £700 - £800k needed?
Maybe they'd be able to throw a special dividend back to us as well, 2 or 3p maybe?
Anyway, the next six months will definately not be boring!
I have, and whilst I understand the point you both make, I'm not unduly worried. I believe that JM is extremely commited to getting us shareholders a great deal here, and knows he'll do very well as a result too.
Ultimately HZM is his source of income, so any spare money he is piling into shares will need to come out of HZM anyway.
As he stated, they have been running a tight ship to ensure available cash lasts a long time, and that includes not over rewarding themselves until the company is producing good revenues.