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HCO, HYLEA METALS LIMITED
blacksheep
post Posted: Jul 23 2019, 08:43 PM
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Posts: 6,409
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In Reply To: blacksheep's post @ Jul 21 2019, 12:30 PM

Extract from today's announcement. Grant Davy appears to be Owner & Sole Director of Matador Capital Pty Ltd - he's involved with BOE & SUP a couple of BW Equities other recent transactions

QUOTE
Underwriting arrangements
As announced on 24 June 2019, the Company has received a firm commitment letter from BW Equities Pty Ltd
to underwrite the above capital raisings up to $8 million (meaning that $0.5 million of the Second Placement is
not underwritten). This underwriting commitment will terminate if each of the following has not been satisfied by
5.00pm (Perth time) on 28 February 2020:

1). the Company obtaining all necessary shareholder approvals for the acquisition and the capital raisings
(other than the first tranche of the First Placement);
2) satisfaction of the following conditions precedent to completion of the acquisition:
(i) all Malawi government consents necessary to complete the acquisition being obtained;
(ii) all consents and approvals required from Nedbank Limited (provider of Environmental Bond to the
Kayelekera Mine) necessary to complete the acquisition being obtained; and
(iii) all consents and approvals required from the noteholders of Paladin Energy Limited to complete
the acquisition being obtained.

The Company has agreed to pay an underwriting fee of 5% of the amount of the firm commitment, payable on
settlement of the relevant parts of the capital raising.

Matador has agreed to sub-underwrite up to $4 million of BW’s underwriting commitment. The underwriting
commitment and Matador’s sub-underwriting commitment have been reduced by the amount of the
Convertible Loan, such that the remaining underwriting commitment is $7.5 million of which $3.5 million is subunderwritten by Matador.

Convertible Note Agreement
The terms of the Convertible Loan Agreement include the following:

(a) Subject to shareholder approval, the Convertible Loan will be converted for the issue of Shares at the
deemed issue price of $0.02 per Share (Conversion Shares);
(b) Matador will also be issued 1 free attaching Option for every 2 Conversion Share that is issued;
© Conversion will occur automatically subject to and conditional upon Shareholders approving the
Acquisition;
(d) Matador’s Conversion Shares will not be issued until after the record date for the Rights Issue, such that the
Conversion Shares will not be eligible to participate in forthcoming Rights Issue (as defined and further
explained above); and
(e) Matador to receive a 5% capital raising fee on the amount of the Convertible Loan pursuant to the terms
of the sub-underwriting arrangements referred to above. Otherwise, there are no fees or interest payable
in relation to the Converting Loan (other than default interest in the event of late payment.




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Jul 21 2019, 12:30 PM
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In Reply To: nipper's post @ Jul 21 2019, 11:40 AM

Let's hope the shareholders of Kaylekera Mark II hemorrhage less money than Mark I

QUOTE
During operation the Kaylekera mine was not only secretive, plagued with industrial disputes and allegations of not providing safety gear for workers, the mine during operating failed to deliver any dividends to their shareholders despite record breaking production. Concerns about cost cuts meaning safety and environmental cuts were raised at Paladin’s shareholder meetings for many years in a row, but these concerns have consistently been overshadowed by angry shareholders who have been hemorrhaging money from the dropping share price.


Will be interesting to see how new management will address the issues that plagued the previous owners.

http://www.mpi.org.au/2015/03/paladins-cur...saga-in-malawi/





--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Jul 21 2019, 11:40 AM
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Posts: 6,213
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QUOTE
A small but tantalising $8 million equity raising by uranium play Hylea Metals has become one of the most sought-after in town, and the firm running the raising is taking full advantage of its new-found leverage. Hylea announced last month it would raise $8m at 2c a share as part of its deal to buy the mothballed Kayelekera uranium mine in Malawi from Paladin Energy. Those subscribing to the equity raise will also collect one free option for every two shares purchased, with those options having an exercise price of 4c.

The raising looked pretty attractive when Hylea shares spiked on the back of the Kayelekera deal. But their desirability went up another notch altogether this week thanks to US President Donald Trump, who decided against introducing new tariffs and restrictions on uranium imports into the US. The stock touched a fresh high of 7.3c this week, meaning those lucky enough to get a slice of the equity raising face a handsome immediate profit, not just on the new shares but also the options.

Melbourne boutique BW Equities, which is running the placement, and its executive director Ben Kay are telling interested parties they will only get a sniff of the raising if they’re willing to go substantial with a stake of 5 per cent of the company or more, meaning a commitment of at least $600,000. Those parties will also be expected to immediately exercise those free in-the-money options. The requirement to go substantial should hopefully discourage those new investors from dumping the stock, given any further trades will need to be announced to the market.

https://www.theaustralian.com.au/business/d...fe4e664247de767

(- still sounds like a pump!!)



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
blacksheep
post Posted: Jun 26 2019, 10:12 PM
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Posts: 6,409
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In Reply To: nipper's post @ Jun 25 2019, 12:24 PM

Looks like the next BWEquities pump. CR @ 2c and excited punters paid up to 9c on Monday's announcement!!

BW raised $8m for fellow U miner BOE back in March 2018. Grant Davey (part of the HCO team) was involved with BOE's Honeymoon project (has left the company) and is also a director of another of BW's "tranactions" - SUP. HCO has all the hallmarks of Tolga Kumova coming on board as a sophisticated investor. Already love heart cdchi1 is "promoting" the stock on HC - cdchi1 is a mate of TK and Ben Kay of BW and promotes most of their stocks. Just needs love heart shimmer to come along for back up support biggrin.gif

QUOTE
CAPITAL RAISING
The Company is proposing to fund the acquisition with capital raisings to raise between $8M and $8.5M as
follows:

1) a placement of 150,000,000 Shares to sophisticated and professional investors at an issue price of
$0.02 per Share to raise $3M (before costs), together with one free attaching option to acquire a
Share exercisable at $0.04 each on or before the date which is 3 years from grant (Option) for every
two Shares issued (First Placement);

2) an underwritten non-renounceable rights issue at an issue price of $0.02 per Share to raise $1M (before
costs), together with one free attaching Option for every two Shares issued (Rights Issue); and
3) a further placement of between 200,000,000 and 225,000,000 Shares to sophisticated and professional
investors at an issue price of $0.02 per Share to raise between $4M and $4.5M(before costs), together
with one free attaching Option for every two Shares issued (Second Placement). Settlement of the
Second Placement will be conditional on satisfaction of the key conditions precedent to completion
of the Acquisition.

The capital raisings are proposed to be carried out in connection with and to partially fund payments to be
made by the Company under or in relation to the proposed acquisition of an interest in the Kayelekera Mine by
the Company.

The First Placement will be issued in two tranches:
1) the first tranche of 25,034,585 Shares will be issued under the Company’s available placement
capacity (15,020,751 Shares to be issued under Listing Rule 7.1 and 10,013,834 issued under Listing
Rule 7.1A), with the attaching Options to be issued subject to shareholder approval; and
2) the second tranche of 124,965,415 Shares will be issued subject to shareholder approval.
If the Proposed Acquisition does not proceed, the proceeds of the first tranche of the First Placement will be
used by the Company for expenditure on its existing projects, to pursue further acquisition opportunities and for
general working capital purposes.

The Company has received a firm commitment letter from BW Equities Pty Ltd to underwrite the above capital
raisings up to $8M (meaning that $0.5M of the Second Placement is not underwritten). This underwriting
commitment will terminate if each of the following has not been satisfied by 5.00pm (Perth time) on 28 February
2020:

1) the Company obtaining all necessary shareholder approvals for the acquisition and the capital
raisings (other than the first tranche of the First Placement);
2) satisfaction of the following conditions precedent to completion of the acquisition:
(i) all Malawi government consents necessary to complete the acquisition being obtained;
(ii) all consents and approvals required from Nedbank Limited (provider of Environmental Bond
to the Kayelekera Mine) necessary to complete the acquisition being obtained; and
(iii) all consents and approvals required from the noteholders of Paladin Energy Limited to
complete the acquisition being obtained.

The Company has agreed to pay an underwriting fee of 5% of the amount of the firm commitment, payable on
settlement of the relevant parts of the capital raising.

A detailed timetable for the First Placement and the Rights Issue will be released shortly. It is expected that the Rights
Issue will be settled at the same time as the second tranche of the First Placement. The record date for the Rights
Issue will be advised when the detailed timetable has been finalised for release to the market.



Some extracts from this report written by Friends of the Earth, so could be a little biased - Undermining Africa - Paladin Energy's Kayelekera Uranium Mine in Malawi
Morgan Somerville and Jim Green, June 2018
A report prepared for Friends of the Earth Australia
Full report - https://nuclear.foe.org.au/wp-content/uploa...-2018-Final.pdf
QUOTE
The prospects are particularly bleak for a restart of the Kayelekera mine ‒ it is a much smaller
deposit than LHM and much more expensive to mine. Paladin has said that a uranium price of
about US$75 / lb U3O8 would be required for Kayelekera to become economically viable.18 That is
well over twice the current long-term contract price and more than three times higher than the
spot price.19 The spot price hasn't reached US$75 since early 2008 ‒ the tail-end of a price
bubble.20 The long-term price hasn't reached US$75 since September 2008 ‒ also the tail-end of a
price bubble.21

Paladin has also said that connection of the mine to the electricity grid is a "precondition" of any
decision to recommence operations.22 That remains another obstacle to a resumption of mining.


Paladin itself said in 2014 that a resumption of production at Kayelekera was not likely in the
medium term.23

Even if the uranium price did rebound and the mining resumed, Kayelekera is a relatively small
deposit and would operate for only 3‒5 years according to Paladin
.24

Sooner or later ‒ probably sooner ‒ the Kayelekera mine-site will need to be rehabilitated. Paladin
was required to lodge a US$10 million Environmental Performance Bond with Malawian banks,
and presumably that money can be accessed to rehabilitate Kayelekera.25 But US$10 million is not
sufficient for the job. According to a Malawian NGO, the rehabilitation cost is estimated at US$100
million.26 Paladin has ignored repeated requests to provide its estimate of the cost of
rehabilitating Kayelekera, and the company says that the US$100 million estimate is higher than
its own. Nevertheless it can be said with confidence that the figure will be multiples of the US$10
million bond.

Paladin's 2017 Annual Report lists a 'rehabilitation provision' of US$86.93 million to cover both
LHM and Kayelekera.
27 One problem is that the funds might not be available for rehabilitation if
Paladin goes bankrupt. A second problem is that even if the funds are available, they are unlikely
to be sufficient. For comparison, Energy Resources of Australia's provision for rehabilitation of the
Ranger uranium mine in Australia ‒ also an open-pit uranium mine ‒ is US$403 million (A$526
million).28 That figure is additional to US$346 million (A$452 million) already spent on water and
rehabilitation activities since 201229 ‒ thus total rehabilitation costs could amount to US$749
million (A$978 million). Moreover, current cost estimates could easily increase as they have in the
past.

Rehabilitation of LHM and Kayelekera would likely be cheaper than rehabilitation of Ranger, for
several reasons including the relative size of the mine-sites. However it stretches credulity to
believe that the cost of rehabilitating both LHM and Kayelekera would be an order of magnitude
lower than the cost of rehabilitating one mine in Australia.


QUOTE
Broader problems

...........Standards at Kayelekera fall a long way short of Australian standards ‒ and efforts to force
Australian mining companies to meet Australian standards when operating abroad have been
strongly resisted. Paladin's Kayelekera project would not be approved in Australia due to major
flaws in the assessment and design proposals, independent consultants concluded.35


I wonder who is required to stump up for rehabilitation costs down the track - HCO (if they go ahead with the acquisition) or PDN?


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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Jun 25 2019, 12:24 PM
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Posts: 6,213
Thanks: 2211


QUOTE
Kayelekera in Malawi was Paladin’s second uranium mine after its flagship Langer Heinrich operation in Namibia.

Kayelekera was put into care and maintenance in early 2014 amid the prolonged downturn in uranium prices following the 2011 Fukushima nuclear disaster.

Uranium prices have shown some signs of life in recent months, prompting several hopefuls to rebuild positions in the sector.
Hylea looking to raise $8 mill at 2c a share, to buy this from Paladin



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 



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