Horizonte Minerals Share Discussion Threads

[strow] 16/5/2018 10:03

I honestly think the free float is very low-I would think that even the larger holders just on this board between us are likely to hold in excess of 7-8% of the shares and thats just on this board.
Things are likely to get very tight going fowards as holding/adding now thankfully seems to be the norm rather than trading

[jailbird] 16/5/2018 08:53

I think the the spread is to deter buying

[jailbird] 16/5/2018 08:31

Can sell over 500k still onlineMaybe we have a buyer as well

[strow] 16/5/2018 08:15

Thanks guys-your sharing always appreciated-great info

[charles clore] 15/5/2018 23:42

Just to reiterate thanks to Salmonn and uapatel for sharing the AGM info.

[cgequityinvest] 15/5/2018 22:54

Thanks for the comprehensive notes from today's AGM - much appreciated.

[jailbird] 15/5/2018 22:31

Salmonn and uapatel,

Fantastic summary of the meeting....positive updates..thanks chaps

I am glad the BoD share the frustration in the share price...compared to peer junior miners..it is undervalued.

We need another II on board to move this higher.

[salmonn1] 15/5/2018 22:05

Thanks Twigs and uapatel as well. I don't know if Raymund or anyone else has anything to add?

[twigs3] 15/5/2018 21:49

Salmonn, thanks for the detailed notes from AGM, always look forward to them at this time of year.

[salmonn1] 15/5/2018 21:35

Thanks uapatel, not that it's a competition, and it's uncanny that you seem to have picked up on a lot that I missed, much appreciated.

[uapatel] 15/5/2018 21:31

salmonn,

Much better set of notes, by far. Thanks for posting them.

[salmonn1] 15/5/2018 21:19

Re permitting the company have invested time and funds to ensure the process is moving forward. The Preliminary Licence is in place, the Construction Licence will be in place for Q1 2019 and the water permit obtained. Permitting is an iterative process, nothing else is currently being permitted in Para, and the southern region of the state with an average income of just $2 per day is a priority for economic development for the state government. HZM are aware of the forthcoming elections and are taking account of the possible slowing of the process as a result. I get the impression permitting is on track.

The ore grade for the first ten years at 1.9% is at the top of the grade curve. The PFS is now historic, today's Ni price is higher with the result that for example the FS assumption is likely to be nearer $13k/t.

Re Vermelho, power lines and other infrastructure are very close by. The VALE spend closer to $300m than two, lots of drilling down to 25m, giving a very good understanding of the geology. The limonite resource will be via the HPAL route. The first attraction is the high grade saprolite, we are looking at stripping out the high grade ore at the edge of the hills. VALE can see the synergies with HZM, hence VALE, sale and the royalty where they will get the majority of their value. HZM PEA will be looking at a smaller name plate capex for HPAL?, PEA due in Q3/Q4.

How does Vermelho compare globally? Comparing to CleanTeq and Sconi Vermelho has no added value in the market at the moment, JM thinks it should add $100m extra value to the company. To reiterate, FS published in Q2/Q3, construction permit, Q4/Q1 and first metal at Araguaia 2021.

HZM is now a pure Ni play that can supply the whole Ni space. Looking for an off-take JV for Vermelho, and if someone wants production of 40-50k tonnes per year we have the capacity. Owen pointed out that the current plans allow the space for a second line to be added.

JM made the point that HZM have a strong shareholder base including two major miners, TECK and Glencore and have £10m to finance the rest of the year and 2019. Also pointed out that the team have been very cohesive and long term. Some discussion re sellers of shares. JM says he is in monthly contact with major shareholders, not easy to know who is selling, we have to accept that fund managers have a job to do which includes trading shares if a profit is available.

I made the point that it might well be the case that the FS is already priced into the market cap and that publication may not increase the share price immediately. Yes the BoD are equally frustrated re share price but it is important that the FS is in a finished state for the market. JM seemed to agree when I said that in the past the majors had paid some silly prices for acquisitions and were now committed to returning value to shareholders but they are likely to return to acquisitions as there is a shortage of new projects and there should be more interest in HZM in the future from the industry.

Owen Bavinton, Ni is like Al, an energy intensive process, it must have cheap hydro power to be economic. Brazil has a surplus of hydro power. I said there must be an incentive then for the power companies to want HZM to come on stream, JM, yes and there is a deal to be done re power infrastructure. Owen, said Brazil is a mature market for Ni, the assets are known and the region is already exploited to a large extent, where as HZM is as yet unexploited. JM, the FeNi is likely to go to North America or Europe. Owen, China is very interested in Brazil, for example, recently bought up a third of the power network. They are definitely engaged in purchases of assets in Brazil, not just Australia.

As usual, the above is as I remembered it and may not be totally accurate. But the general point is that HZM is continuing to increase its asset base, de-risk the project and hopefully moving forward into more benign market conditions.

Ends.

[salmonn1] 15/5/2018 21:19

Good to see other shareholders today, and I thought we had a very positive discussion. uapatel, I think you're spot on with your notes. I will add my bit, as usual, it's from memory so it might not be totally accurate.

To sum up this year’s AGM, A certain amount of frustration all round re the share price but the progress since last year’s AGM and the fundamentals of the company looking better than ever.

David Hall, a major year for HZM, two assets, tremendous year thanks to JM and the BoD, good also to see the Ni price up. Ni presents a tier 1 commodity with strong demand and Vermelho an attractive source of Ni and Co.

JM gave a presentation, more than a short up-date, covering much of the same information as given recently in other sources, but welcome confirmation that the company is progressing and markets are moving in the right direction in line with the company’s time table.

Nice start to this year’s AGM. Last year one asset, Ni at $8/9k/t, market cap £30m. Now two assets, Ni at $14/15k/t and market cap £66m. Araguaia in final stages of FS. VALE spent almost $300m on Vermelho, bought for $8m HZM now have one of the highest value assets in the junior mining company sphere.

Update on Ni, total world Ni consumption currently 2.2 m/t per year, 70% going to stainless steel. Main driver of Ni is stainless in the short term and the market is not factoring this in. Stainless steel growth in China was 9% last year and is forecast to be 7% this year. The market in batteries has concentrated on Co but with Tesla for example announcing that 80% of its battery content will be Ni there is going to be an increase in the use of Ni. EV penetration is a grey area, 1% penetration currently requires 70k/t per year, 4%, 220k/t and 20% 1.1m/t. Taking just 4%, 220k/t per year is massive and Ni companies starting from scratch have a ten year cycle from discovery to production and there is not the product in the pipeline. There is strong demand and on the supply side not the projects required. Equally it is important not to be complacent, we want to be at the bottom of the cost curve, to be economic even at $12k/t.

Vermelho is adjacent to the Carajas mining district with all the infrastructure suitable for mining available. The acquisition of Vermelho, Gap and Araguaia effectively consolidates a nickel district. Acquiring Vermelho was a function of the nickel market, a good deal for HZM and VALE could see the synergies with HZM, and with their royalty they have a stake in the success of the project. Everything is 100% owned by HZM bought at market lows with the intention to monetise on the way up.

Showing the test pit slide, JM said it’s 200m square, the trial mining reconciled the drill results to the actual ore content. Many companies do not go through this step, meaning if the mine is not as productive as predicted there is nothing that can be done. We have a very large saprolite resource that we know from testing can produce FeNi.

Re the FS the time frame has been re-set, nine months was too aggressive and we want to make the study complete and ready for the market. Also need to reassess certain aspects, for example, thermal coal has risen from 40 to 75 dollars per tonne, look at trucking high grade ore from Vermelho, and revisit grades given the higher Ni price. We now have an asset to support a fifty to eighty year mine life, or a big enough resource to support two RKEF lines for a good period of time. Barro Alto is similar and they are making money. Whenever the Ni price rises there are new technologies that promise low cost production, but the reality is that the RKEF process is well understood, the process flow sheet equipment can be purchased off the shelf and production can be ramped up from the start, a de-risked process. The major infrastructure is in place, just need twenty miles of highway and the power line. More follows...

[death by donut] 15/5/2018 21:17

Thanks for that , appreciated. DbD

[twigs3] 15/5/2018 20:54

Thanks for that uapatel

[waterloo01] 15/5/2018 20:37

Thanks for the feedback. Very much appreciated.

[uapatel] 15/5/2018 20:26

Some of my takings from the AGM

Firstly, no NEW news was issued or divested as far as I know.

Anyone else reading beyond this point, these are my comments/observations from the AGM. Hopefully others that attended might correct, clarify and add their views.

The AGM was held in room around a large circular table (knights of the round table, lol). Not too many shareholders, but did allow for an easier approach to ask questions and get a personal feel on the Directors/business. Nice to have met Raymond and a few other shareholders there.

Prior to the formal proceedings, JM came round and I had a brief informal one to one chat. (Very impressed by him and his enthusiasm). I asked a few questions...

Nickel Market for Araguaia - JM said he felt that China (having just been there) was predominantly EV focused and they would get there Nickel pig iron from Indonesia. He felt we would be looking to the rest of Aisa (Namely Japan & Korea) and Europe for our non EV nickel. JM (during the meeting) pointed out that that Chinese were prolific in there presence in Brazil.

Nickel Price - I asked JM if he felt we may end up with a two tier price band because of EV market (Class 1 & 2 Nickel). He felt not for sometime. Especially as EV market was still a small percentage of the market and its in our interest to have an equal price for all our Nickel rather than a small premium for a smaller market.

Off takes - JM said that it was a point of discussion in China and there was clear interest. Clearly he wasn't really interested in giving the Crown Jewels away yet. (Good man!)


The AGM, (voting all done and RSN issued)

JM essentially went through the Q2 presentation, so no new info.

Some of the points/questions raised.

JM highlighted our relative mine proximity and ease of trucking. Essentially all product traverses one main road upto the port. I asked if there would be any issues in terms of a log jam with others using this route. Not that they were concerned about and they could once the scale of the project allowed train products to the port (scales of economy). So no real issue.

The Power supply for the project was really good (hydroelectric). In fact it was suggested by one shareholder that we actually would act as a key customer and assist the power company being an anchor client. JM felt that was plausible.

Other nickel prospects. JM stated they had looked at other prospects, but they had now two tier 1 projects and this was sufficient.

HPAL/RKEF. JM mentioned that they were using the RKEF process as this tried and tested and seen as economic. He mentioned that new technologies were always coming forward, but they hadn't seen any new techniques that proved scalable or economic. (Apologies I'm not sure of my ground here so if anyone else wants to comment, much appreciated).

Share price and the Seller. The board agreed the low share price was very frustrating, but he was at pains to stress they really didn't know who is behind the current selling. JM pointed out they continue to monitor the share trading, trying to establish what is happening and liaise with key shareholders.

Dividends. Yes this was raised by a shareholder. (Nice to think we would still be around for it). Although JM did suggest if and when this was paid it would be good one!

BFS and Vermelho. JM pointed out that they were looking at taking on board an element of Vermelho in the BFS. This was the hope and needed to be reviewed to see if provided optimised value as this stage.

Someone suggested that the share price may have the BFS priced in already to some extent and that we may have to wait for a further uplift in the share price JM felt we were undervalued, but couldn't really say more than that.

I left the meeting feeling very positive with my holding and look forward to seeing the progress in the months ahead.

Anyway, hopefully others will add their views.

Good luck all holders.

[nowenterprise] 15/5/2018 16:24

Any interesting feedback from the AGM?

[maverick247] 15/5/2018 15:53

Buyers back - will pop at some point - meanwhile im going to focus less on share price and more on the fact im invested in the next Tier 1 High Grade Nickel mine to come online globally'CEO's own words

[charles clore] 15/5/2018 13:59

jailbird - the chart looks quite bullish. The only thing that doesn't is the MACD starting to turn down. So for me, despite the seller continuing to sell I think the series of rising wedges in the chart tell the underlying story. The penultimate rising wedge could be interpreted as a bear flag. Like this one, they can break down at the top and trigger a bit of selling, only then to turn and carry on in the upward direction. No advice intended!

[nowenterprise] 15/5/2018 13:56

jailbird, suggesting that someone "Read the RNS" is not very useful (and comes across as a bit rude actually). I have no problem with you having the opinion that JM knows what the selling is about, but I suggest you don't state it as though it's a fact without some kind of supporting evidence or reason. Also, you are openly implying that he's just lying to his investors.

[jailbird] 15/5/2018 13:47

You better explain that Charles

[charles clore] 15/5/2018 13:26

The share price tends to move up sharply when the time is right. Could we be looking at another move soon?

[nowenterprise] 15/5/2018 13:20

Jailbird, you said "JM will know who the seller is", but in the investor call he said he did not know.



Edit: FYI the exact spot in the call where he addresses the selling: