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(HZM) Horizonte Minerals Share Chat

Discussion in 'General Share Chat (HZM)' started by Stabilo123, Feb 20, 2016.

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    Advfn 14/11/2019 cgequityinvest:

    Just attended the HZM presentation at Mello which was done by Jeremy Martin and Simon Retter.

    Jeremy presented well - as usual - to an audience of circa 12/15.

    Nothing new in the presentations but some interesting questions and had a useful chat afterwards which provided some additional insights. Will provide additional detail later.

    Some further feedback from yesterday's presentation at Mello.

    Most of the background is known so i won't repeat that. Most of the additional insights came from Q & A plus talking to Jeremy Martin and Simon Retter after the main presentation.

    In no partic order and based on my notes/interpretation:

    1/ They are frustrated with the lack of recognition within the market place for the significant progress made/potential and confirmed that the equity markets are tough. Jeremy reiterated the desire to get the market cap up to £100m asap but some fund managers are "watching and waiting" rather than committing due to a combination of Brexit, trade war, issues with illiquid stocks (Woodford) etc. The fund managers are effectively waiting for evidence of offtake agreements and delivery of debt.

    2/ There were asked about Teck being a more major investor/acquiror. JM's feeling is that they are unlikely to want to acquire HZM as they are not a primary nickel producer but they could be interested in a more strategic role/stake.

    3/ Simon Retter advised that his and Jeremy's short term focus is to explore all the fundraising options/avenues and determine the optimum route that maximises shareholder value.

    4/ Since the Vermelho PFS they have had significant interest from private equity groups and EV manufacturers and have effectively put together a data room of information. One of these interested parties mentioned is Tesla (I got the impression their private equity arm).

    5/ JM was asked about the possibility of selling the business now - his response was its not for sale as mgment believe they can generate much more shareholder value by progressing both projects.

    6/ Orion's royalty has provided credibility - partic with the banking for Araguaia. Some of the banks will effectively piggyback on the DD completed by Orion. I got the impression that they are looking for Orion to take a significant stake in the debt/equity for Araguaia - with JM suggesting that the overall size of the deal is not far from their average investment. So my interpretation is that the Orion royalty is very much a starter position and they will be a cornerstone/majority funder on Arag going forward.

    6/ As part of the financing package for A - they also see interest from stainless steel producers - i guess this is the offtake element.

    I asked whether how confident they are about getting the financing in place - the response was robust - it being more a case of determining the optimum route. The team are very busy at the moment meeting interested parties and working through all the options to determine the best way forward.

    Apart from the above I asked about the market premium attached to nickel sulphate for the EV market. JM said that the premium of $2000 a year ago has now turned into a deficit of $1000 - i.e. producers have ramped up production before the market has really started to motor.

    A list of key shareholders was provided in the presentation - have not had the chance to check any changes. What is shows is:

    Teck 14.5%, HL 11%, Canaccord 9.9%, JP Morgan 8%, Glencore 6.1%, L/Odier 4.1%, R Griffiths 4%, HSDL 3.2%. JM did say they have a significant number of private investors but that some are fickle and do trade the shares!

    Those are my main observations/interpretations. Pls DYOR. Disclaimer - I am a shareholder.

    ....
    yes there was some feedback re personnel at Arag but i can't remember the detail! I asked whether they felt they had the expertise to take Arag forward all the way thro production rather than selling it as an oven ready investment opportunity to a major. The response was that the board had strong operating experience (Owen Bavington and the Teck Operating VP guy Alexander Christopher were mentioned). At the same time they mentioned the recruitment process going on in Brazil which is well under way - some figs were mentioned but i can't remember the details.

    Some other points while i remember :

    1/ I had not realised how close the Vale operations were to Araguaia - they are just to the north - the inference being their is a pool of local expertise available and secondly the infrastructure is largely in place.

    2/ The scale of the opportunity - if both A and V are developed and are producing the combined output will make it the 8th largest nickel mine in the world.

    3/ Both mines are in the lower quartile in terms of costs - we already knew this.

    JM stressed that the Orion money gives them the luxury of being able to take time to ensure they pick the right financing route/build shareholder value - they are not under pressure to raise any more equity and are in a stronger negotiating position re offtakes/JV's/private equity funding etc etc.

    I came away significantly more confident than i have been that both mines are attracting strong interest from third parties and are seen as attractive assets in the market. There are a number of moving parts that make estimating the end value tricky ... but its a lot further north than their current £55m market cap.
     
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    Blackstone forms alliance with Korea’s largest EV battery cathode producer as nickel market readies for next boom

    Blackstone Minerals (ASX: BSX) has entered into a memorandum of understanding with Korea’s largest cathode manufacturer, Ecopro BM Co Limited, furthering its EV-focused strategy.

    Ecopro BM (listed on the KOSDAQ stock exchange, market cap US$930m) is a world-leader in the high-volume cathode material market, with major
    customers including some of the world’s largest battery manufacturers. Based on the future growth potential of lithium ion secondary cells such as electric vehicles, electric energy storage systems, uninterruptible power supply, smart grids, aerospace, medical and military purposes, Ecopro BM will grow into a core material company and leader of the next-generation battery market.
    https://www.asx.com.au/asxpdf/20191202/pdf/44c63335qwblh6.pdf
    05E3CFFF-2927-440F-9D10-A088AA78AE42.jpeg
     
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    Vale to exit New Caledonia, eyes Indonesia to boost nickel output
    4th December 2019 BY: REUTERS
    LONDON – Brazil's Vale plans to exit its troubled New Caledonia assets but still aims to ramp up nickel output ahead of rising demand for electric batteries, executives said on Wednesday.

    The planned divestment of nickel operations in New Caledonia comes after Vale said last month it would write down the mine and incur a non-cash impairment charge of about $1.6-billion in the fourth quarter.

    A year ago, the world's top nickel producer unveiled plans to invest $500-million in the mine after failing to find a partner for the operation.

    But on Wednesday, CFO Luciano Siani said Vale had decided to exit the operation, which has been beset by technical setbacks, a chemical spill and violent protests.

    "We realised we don't have the competence to raise the production levels with this technology to where we want it to be. We realise that others may have this competence," he told an investors' presentation in London.

    Siani said Vale was examining all options in how to exit the unit and would make a decision in the first half of next year.

    Last year, Vale's New Caledonian operations produced 32 500 t of nickel, down from 40 300 t in 2017.

    The company remained bullish on nickel. It aims to boost production of the metal by about 70% in coming years to 360 000 t/y, mainly by expanding in Indonesia, said Mark Travers, Vale's interim executive director for base metals.

    "Nickel is poised for dramatic change," he told investors, but did not specify a date for the higher production target.

    While there is an oversupply of high quality nickel, the market is due to tighten in coming years as electric vehicle sales climb, Travers said.

    The metal is currently mainly used as an alloy to make stainless steel, but it is a key component in electric vehicle batteries.

    Vale has two nickel projects on the drawing board in Indonesia being developed with joint venture partners, Travers said.

    The Bahodopi project is due to produce 70,000 tonnes a year of ferronickel and is being developed with Chinese partners.

    Vale is also working with Japan's Sumitomo Metal Mining in Pomalaa for a processing plant aiming for 40 000 t/y of nickel output suitable for batteries.

    Travers also said Vale aimed to increase copper output to 480 000 t by 2023, up 20% from an estimated 400 000 t next year. [​IMG]

    EDITED BY: Reuters
    http://m.miningweekly.com/article/v...to-boost-nickel-output-2019-12-04/rep_id:3861
     
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    Last edited: Dec 18, 2019

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