Horizonte Minerals remains on track to reach production at Araguaia. Buy says Gary Newman...

BREAKING HERE: Harcus Parker update on its Neil Woodford case against Link

As rare as is it to see an AIM mining minnow with a large and potentially very valuable resource in the ground actually make it to the production stage whilst retaining ownership of all of the project, Horizonte Minerals (HZM) now looks on the verge of achieving that. Most of these AIM companies that boast of a big resource will never actually mine any of it, as usually the economics of doing so are far less impressive than the quantities of the minerals themselves that are stated and even more so when the initial Capex cost of actually getting any mining operation off of the ground is prohibitive and has to involve debt funding. Horizonte looks on the verge of proving that it is possible though and especially if you acquire the original licences at a time when there is little interest in the commodity and it is only borderline economic at best. That is exactly what has happened with its Araguaia project in Brazil, which it acquired from Glencore some years back at a time when nickel prices were low and the economics of the project didn’t really make it an attractive investment given the amount needed to reach production and the rate of return that would have been generated for investors. Now though things look very different.

Abingdon Health after the corrupt deadwood press pump when’s the placing dump? Read HERE

This is with nickel in high demand and that likely to continue going forwards, although there will continue to be some choppiness for prices – as we’ve seen in recent weeks with low inventories in China, quickly followed by reduced demand at stainless steel mills as a result of shocks to the property market due to the Evergrande debt crisis. But the general consensus seems to be that nickel will remain in high demand in the coming years. So it shouldn’t really have come as a big surprise that the company delivered on its goal to receive the credit approvals for its senior debt facility by the end of this quarter, and it announced that it has secured $346.2 million in total, which is actually around $20 million higher than had been mentioned previously. The terms of this debt also look very good to me when you consider the size of Horizonte and its lack of credit history, with an initial tranche of $146.2 million which is guaranteed by export credit agencies and was previously announced a couple of weeks back. That will be used to purchase equipment and engage contractors to build the mine, and it carries an interest rate of LIBOR plus 1.8%.

Read HERE: LPA Group – “Year End Trading Update”… so why at 11:53am?...

The second tranche of $200 million is being provided by a syndicate of international banks and has a rate of LIBOR plus 4.25-4.75%, which again I think is very good and suggests to me that the lenders are very confident in the project to be risking that amount at such a low rate. What will likely have surprised investors here though - including myself! - is the lack of share price reaction to this news, and at the current price it is actually trading at lower than where it was a week or so ago, and means there has been no real reward for those who risked holding for this news. Unfortunately that just seems to be the way the markets are these days, and that situation won’t be helped by the fact that Horizonte still needs to raise further money, likely somewhere around $80-100 million. It is already in discussions with parties for a potential offtake agreement to cover at least part of that, as well as with a cornerstone investor that would come onboard via a subscription, which would provide the rest of the money needed. Private investors seem to have been stung so often by placings on awful terms in so many companies recently, that they now seem to automatically assume that any equity raise is bad news and that the share price will drop to around whatever price level the placing is carried out at. What I think people are missing here though is that any equity raise will be the last piece of the puzzle in financing the company through to production, which will of course add significant value – the economics of the project at $16,800/t suggest it would generate total revenue of $7.2 billion and with an operating cash flow of in excess of $3.1 billion, and an independent study suggested an NPV(8) of $740 million. It also points to the project being very robust compared to some of its peers, with a C1 cash cost of $8,200/t and NPV(8) breakeven level of below $11,000/t.

Read HERE: Gooch & Housego – “slightly ahead of expectations”…but what does that mean?...

On the basis of all that, and given that is what any equity raise will be moving towards unlocking, I’m not convinced that people will actually be able to buy in at the same share price as any cornerstone investor comes on board at. That could well be the spark which actually sends the shares much higher post-placing. Of course there is still risk to the project even once it is financed, both in the construction phase and also once it is actually producing, if the reality of that doesn’t live up to the modelling, but then that is something that is the same for all miners and something that you accept if you are going to invest in this sector. Personally, I am more than happy to continue to hold and believe that the company is in the best position that it has ever been in, in terms of getting Araguaia through to production and unlocking the value of it. I view the current share price as a good level for new investors to come onboard at - should they have been sat on the sidelines waiting for the financing risk to reduce - and I may well be tempted to average up again, as I have done in the past as the pieces of the puzzle have started to drop into place. Buy.

Bacanora Lithium - is there enough additional upside to risk holding until deal completion? Read more from Gary Newman HERE

Filed under: Horizonte Minerals, Neil Woodford, Abingdon Health, LPA, Gooch & Housego, Bacanora Lithium

easyJet - full-year results, I remain a believer writes Chris Bailey...

12/01/2021

More reasons why I am still a Headlam Group fanboy says Chris Bailey...

11/30/2021

Triad Group - further share price upside as strategy further plays out suggests HotStockRockets...

11/29/2021

Coral Products - Haydock property sale completes and adds to cash backing, Buy...

11/26/2021

Horizonte Minerals - secures funding package. Remains a long-term Buy says Gary Newman...

11/25/2021

Cranswick is about much more than just sausages. Buy says Chris Bailey...

11/24/2021

Prime People - interims show encouraging trading recovery we anticipated, Buy...

11/23/2021

Wishbone Gold - drilling potential excitement as preparations underway. Buy says HotStockRockets...

11/22/2021

Red Rock Resources - DRC & projects updates, interesting potential and a Glencore legal bonus?...

11/19/2021

Time to re-buy Wood Group? Chris Bailey writes...

11/18/2021

Johnson Matthey - share price plummet on battery materials news a buying opportunity?...

11/17/2021

Burberry & Aviva - what to do now? Chris Bailey reviews...

11/16/2021

Pharos Energy - timely progress in Vietnam. Buy says HotStockRockets...

11/15/2021

Coral Products - demonstrating its profit opportunity. From HotStockRockets...

11/12/2021

I am warming up to Tate & Lyle says Chris Bailey...

11/11/2021

The Asiamet deal with Delta Dunia is better than the market is valuing it at says Gary Newman...

11/10/2021

Nice to see BT shares back above 150p and there is more to come considers Chris Bailey...

11/09/2021

BP - Q3 results, positive cash generation and shareholder returns...

11/08/2021

Essentra - Q3 update, adds corporate excitement potential...

11/05/2021

Stop watching constant COP26 and start looking more at Ibstock suggests Chris Bailey...

11/04/2021

Petrofac - issues resolved in time to take advantage of oil & gas boom? Gary Newman reviews...

11/03/2021

Serica Energy - Buy, the market has overreacted to slight delay considers Gary Newman...

11/02/2021

Zytronic - a significant improvement in trading Buy says HotStockRockets

11/01/2021

Kefi Gold & Copper - security concerns being resolved, upside ahead...

10/29/2021

Johnson Matthey should see recovery with also green energy potential says Gary Newman...

10/28/2021

Stock selection is always fun - Reckitt, Whitbread & Essentra. Chris Bailey writes...

10/27/2021

HSBC deep yawn. Take a look at Prudential instead suggests Chris Bailey

10/26/2021

Metals Exploration - Q3 update, project improvements and more coming...

10/25/2021

Tharisa - Q4 update delivers as we expected, looks more to come...

10/22/2021

Centamin - a buy for yield and production recovery says Nigel Somerville...

10/21/2021

Asiamet Resources - a speculative buy suggests Gary Newman...

10/20/2021

Playtech - what to do following agreed bid writes Chris Bailey...

10/19/2021

Atalaya Mining - Q3 performance sees increased production guidance, further share price upside

10/18/2021

OptiBiotix Health - interims, much more to come...

10/15/2021

Barratt Developments & Vertu Motors - more progress says Chris Bailey...

10/14/2021

Orcadian Energy - good farm-out and direction of travel. Buy says Peter Brailey...

10/13/2021

Central Asia Metals - Q3 operations update boosts shares, looks more to come...

10/12/2021

Imperial Brands - full-year trading statement, Income Buy...

10/11/2021

Headlam - still a Buy following CEO change? Chris Bailey reviews...

10/08/2021

Tesco is a boring Buy and Imperial Brands shares still look good also writes Chris Bailey...

10/07/2021

Panther Metals - a more drilling speculative buy says Nigel Somerville...

10/06/2021

Horizonte Minerals remains on track to reach production at Araguaia. Buy says Gary Newman...

10/05/2021

Jadestone Energy - new well onstream further boosts shares, more to come...

10/04/2021

Anglo Asian Mining - interims, remains a Buy...

10/01/2021

Good news for both easyJet & Smiths Group shareholders says Chris Bailey...

09/30/2021

United Oil & Gas - potential upside far outweighs the risks considers Gary Newman...

09/29/2021

Metals Exploration - interims, more to come as access to further resource is developed

09/27/2021

Tandem Group - positive interims & outlook...

09/24/2021

PZ Cussons - a bad day Buy suggests Chris Bailey...

09/23/2021

Touchstar - interims & expects full-year ahead of expectations, Buy says HotStockRockets...

09/22/2021

Kier Group will undoubtedly like more government spending says Chris Bailey...

09/21/2021

Jadestone Energy - interims, production and cash flow growth to come...

09/20/2021

B.P. Marsh & Partners - half-year trading update, reasons for confidence...

09/17/2021

AltynGold - interims, results of capex look promising...

09/16/2021

Horizonte Minerals - project funding nearing a conclusion. Buy says Gary Newman...

09/15/2021

Wishbone Gold - further step to exploration progress. An update from HotStockRockets...

09/14/2021

Gold & Bluebird Merchant Ventures a buy? Nigel Somerville writes...

09/13/2021

Asiamet Resources - drilling update highlights further potential, Buy...

09/10/2021

CMC Markets - buy the recent weakness? Gary Newman reviews...

09/09/2021

Still a Headlam lover post its first half numbers says Chris Bailey

09/08/2021

EnQuest - interims, some production disappointment but still clear value potential?...

09/07/2021

Jadestone Energy - long-term attractions from this successful share tip?...

09/06/2021

Essentra - further recovery upside...

09/03/2021

Barclays - acquisition news. Still two quid & out? Chris Bailey reviews...

09/02/2021

Polymetal - value & growth potential? Gary Newman writes...

09/01/2021

Kefi Gold & Copper - more positive news considers HotStockRockets...

08/31/2021

Kefi Gold & Copper - Tulu Kapi funding update. Positive but how much?...

08/27/2021

Touchstone Exploration - Q2 update, remains a Buy says HotStockRockets...

08/26/2021

Anglo Asian Mining - Zafar maiden JORC Mineral Resource adds to potential

08/25/2021

Ibstock - based on broader issues than the Sunday press suggested, but a buy says Chris Bailey

08/24/2021

SkinBioTherapeutics - Business Update, high margin profit potential moving closer...

08/23/2021

OptiBiotix Health - extends Seed Health territories. Strong Buy...

08/20/2021

Jubilee Metals - positive production and prices says Gary Newman...

08/19/2021

BP - Q2 2021 results, creating value now & for the future?...

08/18/2021

When the FTSE 100 dumps next, have a look at Prudential says Chris Bailey

08/17/2021

Empresaria - longer-term upside, but what about the short-term? A review from HotStockRockets...

08/16/2021

Seed Innovations - a buy again? A review from HotStockRockets...

08/13/2021

Ariana Resources - more drilling results & time to buy more? Nigel Somerville writes...

08/12/2021

Still a Rolls-Royce believer says Chris Bailey...

08/11/2021

Gold and gold stocks - what is ahead? Nigel Somerville reviews...

08/10/2021

OptiBiotix Health - shares up on trading & commercial update, much further to go...

08/09/2021

Impellam - half-year recovery but more to come...

08/06/2021

Empresaria - half-year trading update, recovery building says HotStockRockets

08/05/2021

Johnson Matthey - still excited about prospects writes Chris Bailey...

08/04/2021

Rio Tinto - the story remains so much more than just cultural heritage says Chris Bailey

08/03/2021

Metals Exploration - Q2 challenges but a better outlook considers HotStockRockets

08/02/2021

Castillo Copper - further copper intersections & visible mineralisation, Buy

07/30/2021

British American Tobacco shares continue to offer attractive total return hopes says Chris Bailey

07/29/2021

Reckitt - recent share price decline too severe? Chris Bailey reviews...

07/28/2021

Centamin - remains a buy following Q2 report says Nigel Somerville

07/27/2021

Union Jack Oil - West Newton update, clear upcoming catalysts...

07/26/2021

Bluebird Merchant Ventures - operational update shows progress is being made, Buy...

07/23/2021

Saga offers interesting exposure to the travel industry bouncing back considers Gary Newman

07/22/2021

easyJet - ten quid or more share price again by the end of the year? Chris Bailey writes...

07/21/2021

Headlam Group - a recovery buy?...

07/20/2021

Burberry - chav challenges? Chris Bailey reviews...

07/19/2021

Orcadian Energy - a newly-listed AIM oiler Buy suggests Peter Brailey...

07/16/2021

Kosmos Energy - production & share price upside potential says Gary Newman...

07/15/2021

Cairn Energy - a lot to like at this price? Gary Newman reviews...

07/14/2021

DS Smith - further recovery & structural growth potential following full-year results?...

07/13/2021

RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.

Five Free Share Tips?

. . . . . . . . . .

Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.

The Details

Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.

We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.

You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.

There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.

Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?

Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now

The Team

We've put together a panel of top tipsters, including:

Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"

Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit

Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks

Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books

Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers

Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies

Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments

The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view

Sign Up Now

UK Investor Show 2018

Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.

To reserve your ticket, visit UK Investor Show.

Risk Warning & Disclaimer

The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.