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I think that’s obvious to all of us but the rest of us all had and still have a choice-filter or ignore-free speech and all that.
He/she is certainly knowledgeable from someone who is longs point of view and I have made my thoughts known about defamatory and very unkind comments about a CEO who has had most likely one of his best friends and co-founder tragically die in the last few months.Beggars belief.
But I think that may have been noted.
Everyone wants to make money and if you can do it shorting then good for you-the option is available and retail shorts are highly unlikely to bring a company to its needs and can provide opportunity for the longs.
I’m actually agreeing with everything publican is saying right now,so definitely a talented trader
I took a degree of comfort that the three cornerstones wpuld all have to agree a bad deal and thry wouldn't as the thing that saves us I still feel that. Apart from the fact that they have 3 wallets thry also don't want the other to do better so they will all want a slice (if the deal is done). Then the only really bad outcome is sewing it up between them but hopefully doesn't come to that, not if thry want to maintain liquidity and stock market listing etc.
My position is c. 600k+ I bought at £1+ average with 100k odd at 70-75p area. Breakeven may seem far off and might have to be happy with lower than that but baby steps we need the company to get through to q1 and do a deal - I think/hope they will. Personallly think anyone buying this range up yo 20p+ is going to do very well (unless they lost it all first of course!)
Now I converge Publican.
I never buy into hypes nor glooms. Fear and gloom spells. I always try to solve puzzles with reason. I am a professional logician. Trying stuff with logical propositions.
(You should see how great I do with the wife — self-glorified-sarcasm here)
But seriously not about me this. But I would love in a conversation is to always be able to be as propositional as you can with the fact and not fiction presented, process, and see if that leads to anywhere you can call sensible or even probable.
My unchartered conclusions is that admin is plausible albeit how improbable .
I see this finding an equilibrium value between 50-80p soon and I will hold to that if I don’t dare to gamble more on it.
Wasarunner thanks again!
I might think one or more if them won’t cut it.
Instead I would think it would have to be all of them to bid/agree. Hence my relative comfort for a non extreme low ball bid.
It sounds by your calcs that the two scenarios break at par at a bid price is for 165mil as that is where the stock is at 60p.
So I wonder who may be tempted for that.
But i get the more comforted now..
You see that is the utility of ‘just’ 65-115 more on the bid. So if you had to as a bidder still pay that 300 for the debt, then your overhead as a bidder to entice your bid as compelling is a mere 20%- 30%.
It all is very hopeful sounding to me.
And before I raise suspicion I am happy to state my history here.
I first bought at 147p. Managed to sell the lot off at 52p and bought it all back with what proceeds at 20.
Then did the whole thing again at selling all at 14, buying it all back at 11, with another 50% cash added at 11.
So whilst I started at a position at 147p, I am now 9x bigger the position at 8p with 60% cash value down, roughly breaking even at 24-25p.
I don’t want a low ball bid, nor a consortium dilution, nor admin… and hence my line of thoughts and questioning :)
Unlikely and I think you may be looking at $15,000 as your low at best as it always overuns on the downside too
If you get a bid for $100m (and thr buyer is settling the $300m debt) then they are only paying for what has been spent because $400m+ has been spent. A lot of what has been spent is Orions and La Manchas money. They won't agree to it (unless one or more of them is the bidder) and will want more.
Thr consortium/dilution to oblivion is probably the worst outcome, assuming a sale can be negotiated ie the sale option is preferable.
I have thought through and even all equity at the nominal price 20p - 1bn shares issued plus effect of diluting convertibles would end us with c. 1.5bn shares. I used to think A1 would get £2.50/£3/sh at production so this scenario gets me to 5x shares so 50p/60p at production. I'm hoping that's worst case....
Unfortunately nickel prices are falling through the floor. I thought $17000 would be the low but currently $16787. I read that Russia supply is also starting to come back online. We need Indonesia to make some serious supply cuts with export taxes, I think there is due to be an announcement on this at the end of the month. It’s difficult to go into a project if you don’t know I’m what the final price of the product will be. Hopefully a reversal will take place before the end of the year.
Not so much as a suggestion - a bit of an overstatement. More trying to gauge worst plausible scenarios.
So far in my mind I am eliminating the intentional admin. But I still see that as the default position to be at in the accident of no solution found.
So thinking on the nasty low ball bid scenario I see that as a possibility - yes. In the lack of no other alternative, a bidder coming knowing you have no options, and say without terribly deep pockets, and seeing that the only alternative is to bid that low, then i see the 50-100bid on equity as plausible.
This is saying in the scenario of just some bidder else definitive admin, then the bid can be that low. This is what i might be suggesting: highly contextual to such a rather specific scenrio.
I'll throw for completeness my worst feared scenario as well. A consortium of the 3 cornerstones and then agreeing to dilute us to oblivion. Of the three plausible scenarios I fear this the most.
Then seeing a number that is needed.
Them then coming back and saying:
Here's allll the money but lets do it on an apportioned rights issue to what we previously held, and a crazy dilution ratio.
So you are suggesting somewhere between 17 p and 34p per share-interesting
Don’t think any of them would agree to that nor retail
Thank you Mumbles. I feel the more positive all of a sudden in the event of a bidder coming along.
By power of a bad analogy. If I was to be looking for a car then the difference is like this:
If I could merely afford a 50k honda but I am eye balling a 100k porche then it is a big big leap to buy the porche.
But if in the other hand I could outright afford a ferrari at 150k what might be to me to through in another 20k for the premium ferrari red paint.
In the grand scheme things, the red paint is the equity and the asset with the debt is the ferrari. And we don't want a honda bidder.
To be clear where I am getting a bid of hope here, is that should a bidder appear in the horizon they most certainly have to cover for the deabt. Which is such a disproportionate lion's share of the pie from where the mcap implied by the share price has gone.
So if they are willing to put a good 300mil for the debt the extra 50-100mil for the equity sweetener may not be that extreme of a feat.
For what is worth i am thinking that in a scenario of a takeover the bid will be between 50 and 100mil on the share.
They wouldn't automatically get the previous debt arrangement. A new one would need to be negotiated and the old settled in full (or whatever they agreed on). Or they woud have to make an all cash offer, including the outstanding liabilities, which would include the already drawn down portion of the debt faculty and and any costs assosciates with it.
I meant 350-400 where I wrote 350-450 in my post earlier. So pay of the debt, plus the bit of either 50 or 100 mil on equity essentially.
Folks I have some questions on the dynamics of offer.
Say there came someone to bid to buy us fully. With some bid price. What would that price actually have to pay around debt. What are the rules in this case.
Say we have a 300 debt facility and used up 200 of that.
If I am a bidder, do I just bid on the equity leg, and if I win I assume the debt situation AS IS at time of purchase?
Or does my bid have to pay off the debt fully? Or whats been spent?
What does actually apply?
Reason I as is this: what is the minimal cash I would have to pay upfronts to make a successful bid.
I think if you have to assume some debt buy off along with equity buy off (and not just the latter) makes the proposition for a better bid more probable and I will tell you why I think that.
If I was to try to bid on just equity. Say bidding between 50mil and I get the whole thing vs bidding 100mil ( 16p vs 32p roughly) has an 100% spread for me as the bidder.
But
If I had to pay off the existing debt facility with my bid, say 300m plus my whatever bids on equity, then it is the diff of bidding 350 v 450 mil which only has a spread of 20%.
Point here being: if I were a bidder, and I had to pay off the debt with my bid upfronts and was prepared for that, its easier to spread to the full extend if the the margin is at a 20% overhead vs 100%.
This really is in the psychology of things when one entity buys stuff if I make sense in the point i am trying to articulate here with my question.
Good find-love Mark as he always gives very informative views but he does we have to remember have his own agenda being ceo of his own nickel development company.
All the same we can’t afford to be short sighted about Nickel-medium to long term now an amazing prospect
All good but when you go short again no sympathy from me 😉
Sorry if already posted. Hzm gets discussed.
https://m.youtube.com/watch?v=hybFLOBnGIc
Yep fear has indeed bred opportunity
Seriously has picked sold ?
That is in my view where people seriously lose money
This always an educated gamble and continues to be.
There is another $2B asset waiting in the wings and if there was to be an offer they would seriously know that.
Horizonte is not just Araguaia
Vermelho is probably the biggest non developed Nickel asset of quality outside Indonesia at this current time.
This ain’t no fading Rose-there is serious valuation there just waiting to be developed..
We didn’t just come on that value by accident-we are holding that due to savy management who made the right deals at the right time and imv they should be cut some slack for this current bump in the road to 60,000 tonnes a year Nickel production.
It ain’t no accident either that they protected the company so well with 3 cornerstones and not less either.
They should be given credit
Well I have it on good authority that that is the case re the 19 mill and yes I guess that’s what the Rns meant.
Good luck with your long and change of heart at the bottom
Fwiw I agree with your entry point
You missed out the $19 m put aside for Vermelho BFS.That is separate from the 34 so the actual figure available as cash in theory is actually $52 m
Curious-the nominal price per share is 20p.
They should not be allowed to raise at less than the nominal price as you will know due to companies act regs
What makes you think they will as that would I think require it to be put to all shareholders not just the cornerstones and voted on ?
"....low chance of a rescue deal....."
The company and its assets will be saved but they will be saved at our expense.
TDT
Trying not to be painful (who knows)
Question-why would a company who had $34 m cash reserves and an extra $19 m in cash reserved for its second project BFS continue to spend it down to zero for “critical pathways” if it thought that there was a low chance of a rescue deal being done and it going into administration ?
Answer-it wouldn’t and that is also why I think that a deal is likely here.
They sure as hell wouldn’t be spending All that money to add “extra value” at this point in time.
Also remember a small company called Teck resources who horizonte have had dealings with in the past (ex-shareholder).They are also probably watching with interest
First massive dilution, then shareholders take up the offer which will be sold to them as the last resort and hey by the way we make it open to the public, you too can be part of the dream.
Then a few weeks later takeover at rock bottom
It would depend on the reason for suspension. Shares can suspend for all sorts of reasons, not all of them bad, but there would have to be a preceding event which is the key part. But if it was due to administration for example, that would be terminal for shareholders.
Spontaneous combustion or something similar