Horizonte Minerals Share Discussion Threads

[divmad] 13/8/2016 07:35

The jury's out on how the share price will react to forthcoming key developments in HZM's life cycle - the PFS and BFS.

Earlier, strow indicated hat HZM would need $8-10mn for the BFS. Let's say it will be $10mn, to cover corporate overheads and other expenses. That's £7-8mn, compared with the current MC of £13mn, so about 50% more equity required at current price levels, a significant dilution.

It can go two ways. Either a straight equity placing, presumably after a positive PFS with some share price uplift, but in any case done at a sizeable discount. Could be 1.5p. Could be 2p if we're very lucky. Could be 1p if we're very unlucky.

Or, management can think outside the box with unconventional ways to arrange finance. A part equity, part offtake agreements, part structured finance type arrangement is possible. The role of cornerstone investors here is vital. Some allocation of equity by one of them would boost the sentiment on raising equity by IIs or HNWIs to complete.

As management has given no indication of how they will proceed, investors should be prepared for all possibilities and greater volatility.

[strow] 13/8/2016 06:37

Possibly Twigs(at that Nickel price)-I am trying to be extra conservative so I can't be accused of ramping this.
I don't claim to know everything about share structures,but there seems to be a lot of concern from some people about the absolute number of shares in issue.
What I believe matters most is the comparison between the market cap pre fund-raise for the construction,post bfs and the NPV of the project.
A large number of shares can always be dealt with by a share consolidation,say 10 for 1,if one wants to improve real earnings per share once in production.
It is the relative MC valuation to the NPV at that time that will give us an idea of our absolute upside both for a production scenario and a take over bid.
Please anyone,correct me if you think otherwise-I'm just trying to put some more rational perspective about the share dilution side of this into the mix.

[twigs3] 12/8/2016 21:56

Strow, I would hope for a NPV of about 1b taking into account a nickel price of £16000 per ton and cut off at 1.9 % ni first 10 years of enlarged project and the fact of exchange rates. Time will tell

[divmad] 12/8/2016 21:37

Will the financing for the BFS come concurrently with, or shortly after, the PF disclosure? Or many months later?

[strow] 12/8/2016 21:27

My guess fwiw is that HZM will manage minimum to get $5m in off-take/royalty and will need up to another $5m in equity for the bfs fundraise.
If they achieved this at say 2p per share,that would be an extra 166m shares.We will also need more working capital,so I think we will end up with 1B shares before capex requirements.

[strow] 12/8/2016 20:31

Twigs-the NPV takes account of all capital costs including the equity component of the fundraise,so the fundraise for production is not really relevant,its all the dilution before that point that matters.
We are just about to be presented with a project with an NPV of at least $500m over 20 years at only 15,000 tonnes per anuum that will be scaleable up to 40,000 tonnes per anuum that will have a secure route through to production and may have up to a 60 year LOM.We need to remain objective and focus.

[twigs3] 12/8/2016 19:22

It probably should be, I think it's probably the case that nobody thinks a company with such a low market cap can bring this to production! It will be difficult for them to do this, but as strow said so far JM hasn't put a foot wrong and it's all down to commodity prices.

[jailbird] 12/8/2016 19:15

The question should be asked to JMWhy does he believe the Co should be worth £100m by end of this year ..15p

[salmonn1] 12/8/2016 19:05

look at the Proactive Investor video where JM talks about "A,B and C routes" and the Tip TV interview were he talks about the capex finance through "debt and equity with off-take plus other options". I agree with strow.

[twigs3] 12/8/2016 19:05

Ps I hope I'm wrong! And after PFS it goes viral!

[twigs3] 12/8/2016 19:03

I am a believer in HZM and have been here many years so don't get me wrong just a balanced view, if Henderson are going to keep selling then we are not going to move up are we? Why they are selling is anyone's guess and strow could well be right,my point is that we need to raise say £10m for BFS and operation cost for next 12months yep ok we are now valued at 25mil jailbird, however we are still not a producer that will take another £350 mil ? Every one will take there bit then nothing left for us?

[jailbird] 12/8/2016 18:55

Found Strow's post "$8 to $10m divmad, but hoping they will pull one out of the bag again with mix of off-take/royalty/equity."so my figures are probably spot on or a little pessimistic

[jailbird] 12/8/2016 18:50

Ok then I was right.. £8m.. For sake of argument .. Might be dollarsI believe it will be part dilution and part debt or something else Let's say £5m at worse case at 1p500m dilution.. So we 1.1b shares in issue .. Approx twice as much At current price market cap will be £25m.... give or take Now is that what you believe the Co is worth when it will be a producer ?

[strow] 12/8/2016 18:47

Come on have faith and stop panicking-they havent put a foot wrong yet and certainly havent shafted us yet.
Remember despite some dilution the bfs will be value adding taking us from what should be an overall valuation of 5-6c/lb to over 10c/lb in terms of value accretion.
Dont bow out too soon Twigs you might regret it.We have all known this information for several years why get so shy now.
My guess is that Henderson are keeping the price down to get as many shares as they can in the bfs fundraise (the cheaper the share price the more they get for their money).
Lets wait and see what happens-these scenarios always happen with development stage companies.

[twigs3] 12/8/2016 18:42

Usd? Not so bad then but not good with exchange rate as it is!

[strow] 12/8/2016 18:40

$8-10m guys

[twigs3] 12/8/2016 18:40

A lot of money when your only a 14m market cap!

[twigs3] 12/8/2016 18:32

I asked that question a few weeks ago and strow replied with that figure I think.

[jailbird] 12/8/2016 18:21

How must do we need for BFSwas it £8-10m?

[twigs3] 12/8/2016 16:59

Yes very disappointing and now we have Henderson selling into the market to what extent we don't know? we could and should have some very compelling figures from the PFS but the opportunity for a higher share price could well be lost if Henderson keep selling and hold it down. If this is still hanging around this level after PFS I think its time for me to move on as the dilution will be to big for BFS and I don't see another way of raising that sort of money when we have a market cap of just £14m.

[jailbird] 12/8/2016 16:34

License granted, PFS due and nickel on the up and the price has factored none of these positives.In the market fallout, the Best Buy price was 1.75pSeems MMs now do no want to buy

[twigs3] 12/8/2016 11:05

Reported spread 22%! Could be to put people of doing a T20 with news so close.

[jailbird] 12/8/2016 10:08

1.95 / 2.15p is what is being offered for 100k

[jailbird] 12/8/2016 10:04

Spread is getting wider MMs do not want to play ballThat 225k trade @2.15.. and then it dropped

[jailbird] 12/8/2016 09:08

Can someone post that link to JMAnd say do no do there.I would be surprised if they go that route to be honest AMC used this vehicle, luckily HZM has never needed to use this type of facility