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(SXX) Sirius Minerals Share Chat

Discussion in 'General Share Chat (SXX)' started by mart101, Jul 30, 2015.

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  1. Timeshare

    Timeshare A Legendary Member

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  2. Wilko

    Wilko Demi God of BlueShare

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    Two choices:

    Either you are correct

    or CF is somewhat naive in the world of newspapers/PR - "loose quotes sink ships" to paraphrase.

    Open minded here - not enough information to form a view. trying to avoid confirmation bias.

    GLA DYOR etc
     
  3. Wilko

    Wilko Demi God of BlueShare

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    For me - don't hold your breath for government intervention.

    IMO FWIW there will be a free market solution somewhere - maybe one not good for existing shareholers!

    GLA DYOR etc.
     
  4. Wilko

    Wilko Demi God of BlueShare

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    [QUOTE
    Why would the DM print such an article -taking comments out of context in such a manner. With Sirius I have seen some tricks in my time but .........[/QUOTE]

    Because their job is selling newspapers - their's in particular !
     
  5. Wilko

    Wilko Demi God of BlueShare

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    For completeness no one seems to be commenting on a couple of OBVIOUIS factual errors in this piece:

    1) Shafts are not 2 miles deep

    2) receivership/administration comes before liquidation.

    Poor journalism sadly.
     
    hocks likes this.
  6. hocks

    hocks Beer Connoisseur

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    This article just doesn't make any sense to me.
    If Sirius went private CF would wipe out most of his personal wealth and he would be out of a job as he is a financial specialist which is a skillset not required if its a private company fully funded.

    Shorts are at a reasonably low level so hardly worth a stunt like this to be rid of them and would backfire anyway.

    Trying to gain government guarantee backing by threatening to go private doesn't work either as from a government perspective the project goes ahead. Its also the worst timing to get any sense from the government at the moment.

    It must be market abuse if this is a true article CF would be in heap deep trouble with the FCA.

    Baffling and depressing.
     
  7. Groucho

    Groucho Member

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    Sirius Minerals 'won't quit the stock market' after chief exec comments 'taken out of context'
    The company says its focus is to continue with a strategic review to get the huge mining project over the finish line.

    Sirius Minerals says it won't quit the stock market, as its search for finance to complete a huge mining project continues.

    Thousands of jobs in Teesside and North Yorkshire will depend on the polyhalite mine and processing centre, which failed to to secure the £400m in funding in September.

    It slowed down construction at its sites and laid 300 night-shift workers of f as a result.

    Reports in a national newspaper suggested that Sirius Minerals could go private, with chief executive Chris Fraser reportedly saying: "‘Where we are now, I think we might be better off being a private company, because sentiment, short-sellers and all those sort of features are just massively distorting the value of the company."

    The report said the comments would worry the 85,000 small investors - many of whom live on Teesside or in villages in the Moors surrounding its Whitby mine.

    However, in a follow-up statement published in the local media, the company claimed Mr Fraser's comments were taken out of context and said: "There is no intention to take Sirius Minerals private. Our focus is on completing our strategic review and unlocking the value of our project for our shareholders, our community, and the UK as a whole."

    Sirius' share price sank last month after the business failed to secure the complicated financing package.

    Local politicians and business leaders have urged the government to think again and support Sirius by underwriting the loan.

    https://www.gazettelive.co.uk/news/teesside-news/sirius-minerals-wont-quit-stock-17114743
     
    Richard Faraway, JJ15 and ardent like this.
  8. Groucho

    Groucho Member

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  9. Wilko

    Wilko Demi God of BlueShare

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    Uh Oh - doesn't look like we have to wait until the end of November !

    RNS Number : 6183Q
    FTSE Russell
    21 October 2019







    Further to the FTSE notice released on 14 October 2019 in relation to the demerger of M&G (UK) from Prudential (UK), please note the index changes as a result of the ranking for the removal of the smallest constituent from the FTSE 100 and FTSE 250 following the demerger of M&G.



    Please see updated notice below:



    Prudential (UK): Demerger of M&G (UK) - Update
    Changes in FTSE UK Index Series

    21 October 2019

    Further to the FTSE Russell notice released on 14 October 2019 and following the demerger of M&G (UK, constituent) from Prudential (UK, constituent), please see details of affected indexes and effective dates below:



    Just Eat (UK, BKX5CN8) will be removed from the FTSE 100 Index and added to the FTSE 250 Index.



    Sirius Minerals (UK, B0DG3H2) will be removed from the FTSE 250 Index and added to the FTSE SmallCap Index.



    M&G (UK, BKFB1C6) will remain in the FTSE 100 Index.



    All changes effective from 23 October 2019.



    Full details of index changes are available on the FTSE Russell website.
     
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  10. Wilko

    Wilko Demi God of BlueShare

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    I've been re-reading this and two points occur

    - The references to going private/strategic investor do seem so central to the article that it is maybe difficult to fully believe that it's just quotes out of context.

    - If the refinance referencing had purely been to Strategic partner and no mention of going private would there have been any of this "kicking and screaming" and we wouldn't have learnt anything new that we didn't already know. The most likely outcome now is dilution.

    maybe it would be nice to have some recognition from CF that he tried for too long to get debt to do equity's ( risk taking ) job. But isn't hindsight a marvellous thing.

    possibly as someone said more to this than meets the eye.

    If I can find time I'll maybe try and recall how the Chanel Tunnel and Euro Disney project refinancings went all those years ago - Does anyone else recall other major projects that ended up being re-financed.
     
  11. hocks

    hocks Beer Connoisseur

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    I can see the issue as to raise say £800m with equity to get the project constructed to be sufficiently derisked and at the 4p price we sadly now see, then any new entities will own most of the company. It would be effectively 'private'.

    This then allows much cheaper loans nearer to completion so the finances still work OK in the long run.

    If this had been actioned earlier at the 20p share price level it would have worked easier.

    Maybe they can pursuade four investors to stump £200m each for 15% of the company each at 8p a share ?
    Gina, Qtar, Norwegian fund, BHP and or others
    Seems attractive to me.
     
    Richard Faraway likes this.
  12. Wilko

    Wilko Demi God of BlueShare

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    Hi Hocks
    my estimate was that 20Bn share
    My estimate was 20Bn shares @4p would net approx 67% of SXX after existing CB conversions and leave maybe 8p per share for existing holders for the time being.

    @8p SXX would need to issue 10Bn to raise £800m, CB conversions would not dilute quite so much as at the 4p level. 10Bn would then equate to approx 50% and leave maybe 12p per share for existing holders.

    Nice as it would be to think that 8p were a possibility. I think the reality is we are now in a buyers market and of the two prices 4p is the more likely.

    I'm trying to work out how the mechanism would be achieved, without a competetive environment, of getting an issue @4p ( something like 30% of NAV sunk costs so far ) if the price falls as low as 2p say in the interim. I'm thinking the price would have to be engineered back above 4p somehow.

    The question then is would it be wise to top up/average down @2p ahead of any refinancing news? I'm guessing alot here can't or wouldn't.

    GLA DYOR etc.
     
    Richard Faraway and hocks like this.
  13. Timeshare

    Timeshare A Legendary Member

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    Sums it up I suppose!!!-Great song though

     
    Last edited: Oct 22, 2019
  14. Richard Faraway

    Richard Faraway A Legendary Member

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    It would be tempting. In my case , I could double my holding for only one-sixteenth of the cost of my existing holding, thus halving my average. 'Good money after bad' rings a bell, though!
     
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  15. Wilko

    Wilko Demi God of BlueShare

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    Ouch

    Two problems a lot here will have I suspect is current total volumes of £ exposure is probably quite high on a personal level already, resulting in.

    - Small top ups ie 1/16 of original investment may only do a part job ie reducing an average from 32p to 17p for example.

    - Doubling up previous monetary investment to attempt an overall profitable outcome if funding achieved - for example reducing an average of 32p to 3.76p may put even more of an inappropriate level of overall investment at risk for many and for others is just not an option.

    It's for each to decide based on their own situation.

    Still undecided here - currently looks like we will still be in the 3p range when 250 drop out is effective tommorrow. If there is some sort of update around the end of October, I may well end up waiting to see the re-action to that on the basis that it may be more general and vague rather than specific.

    BUT who knows.

    GLA DYOR etc and decide based on your own circumstances.
     
    Richard Faraway likes this.
  16. warmrain

    warmrain Demi God of BlueShare

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    I have been made aware of this petition now circulating to encourage and facilitate a debate in parliament regarding the dereliction in government loan guarantees to Sirius. It needs 100,000 signatures to go forwards.
    Do consider signing it and circulating the link to any appropriate contacts.

    https://petition.parliament.uk/petitions/269824

    Regards
    WR
     
    Richard Faraway likes this.
  17. Groucho

    Groucho Member

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    Sirius Minerals (SXX LN) 3.0p, Mkt cap £211m – Sirius relegated to the SmallCap index as it falls out of FTSE 250 • Sirius Minerals continues its fall from grace as the FTSE chucks it out of the FTSE 250 index with the stock relegated to the SmallCap index.

    • Press reports in the Daily Mail saying the CEO would take the company private are apparently a misquote according to ‘The Motley Fool’ this morning

    • The company’s plans to build the Woodsmith mine into a 10mtpa Poly 4 (polyhalite) producer collapsed when the company failed to raise $500m in the bond market.

    • A further $400m of convertible funding was also dependent on the $500m to be raised.

    • Even if the $500m + $400m had been secured the funds appear to be well short of the original estimated BFS capital cost bill and were even further short of revised BFS capital cost estimate of >$5bn

    • The Bond market may have refused to take the $500m high-yield Junk bond issue offered for a number of reasons. One issue appears to be the lack of offtake commitments for the Poly 4 product to be produced by the mine.

    • We understand the current market size for this product is around 2.5mtpa so expanding this to 10mtpa is a tall order by any metric. Although slide 9 in Sirius’s AGM presentation shows total peak aggregate supply agreements of 11.7mtpa and a footnote indicating 13.4mtpa including customer options which leaves us wondering how the company fell short on its offtake.

    • Furthermore the company shows a slide illustrating its EBITDA sensitivity at a production volume of 13mtpa, a wholesome ~10mtpa over the current estimated market size for this type of fertilizer product.

    • Sirius also shows slide 16 on their indicative financing and capex funding in the June AGM presentation highlighting its cumulative capital cost of over $5bn based on the SRK CPR with the exception that prices and costs are nominal, inflated at 2% and highlighting that the expansion to 13mtpa will cost a further $367m.

    • The funding plan included $50m from Hancock equity to be received upon entry into definitive documentation for the Stage 2 Financing

    • The killer footnote for us is that the funding slide, proposal is ‘Based on the expectation ofUS$2,500m facility being available with US$1,000m in further liquidity provided after all high yield bond issuances.’

    Conclusion: While we have some admiration for anyone who has the balls to present this sort of financing proposal at an AGM to investors we are of the view that the prospect of raising of this level of funding for a single project company with no production is pure ‘fantasy’ and is something that is best left to the likes of Rio Tinto or BHP Billiton which have the requisite cash flow and more importantly the technical ability to construct this type of mine.

    SP Angel posted on #SXX https://www.voxmarkets.co.uk/activity/158786
     
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  18. Richard Faraway

    Richard Faraway A Legendary Member

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    Thanks WR. I signed this a couple of weeks ago and passed it around. It takes 100,000 signatures for a petition to be debated in Parliament, BUT it only takes 10,000 signatures to oblige the government to acknowledge and respond to it. As at tonight, it has collected 11,268, but please keep adding and passing around. I have to say, it is extremely poorly worded: a few minutes drafting would have made it much more effective IMHO.

    GLA
    Richard
     
  19. Timeshare

    Timeshare A Legendary Member

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    Can anyone find a mention about Sirius on his website for the RT.Hon. Member for Whitby & Scarborough ?
    If you can please let me know. Maybe he is beavering away very quietly in the background or working pt on the TBM
    https://www.robertgoodwill.co.uk/
    His website says:

    "The purpose of this website is to give you an overview of the Parliament and to keep you up to date on news about what I am doing to help the people of the Scarborough and Whitby area. Please feel free to get in touch."
     
  20. Wilko

    Wilko Demi God of BlueShare

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    Sirius commissioned independent technical report for lenders dated 2nd July 2019. It's a long detailed document.

    Not previously seen this myself.

    A bit dated now, but interesting for those with time.

    This CAPEX excluding mining equipment which is to be leased I think is a bit higher than headlined ( I for one had previously thought $3.6Bn included contingency - apparently not) :

    ...The Stage 2 Re-estimate of Direct and Indirect capital cost expenditure required the for Phase 1 construction and development is $3,600 million (excluding escalation and contingency). Contingency and escalation allowances total $456 million, giving a total Stage 2 capital cost estimate of $4,056 million.

    Sirius intends to enter into leasing arrangements with the suppliers for this equipment. The financial model therefore excludes the capital cost for the mining equipment, which is covered by the inclusion of a lease allowance in the operating cost of $2.00/t of ROM ore at the production rate of 10 Mtpa. The leasing cost is projected to fall to $1.62/t once steady-state production of 13 Mtpa is achieved. These allowances are subject to confirmation based on the terms of the lease arrangements (yet to be agreed), however appears to be reasonable based on the Sirius leasing estimate provided to RPA.

    https://siriusminerals.com/downloads/rpa-executive-summary/

    SSG = Sherwood Sandstone Group ie the acquifier.

    Interesting little snippet - ie not 100%

    ..Ore production over LOM (including the ramp-up period) of 543 Mt at 82.4% polyhalite...

    ..Indicated Mined Tonnes: 257 Mt (47% of total) • Inferred Mined Tonnes: 287 Mt (53% of total) • Granular Product Sales: 409 Mt

    selected parts of RPA's overall conclusions including the shaft sinking part that I view as critical ( some positives / some negatives ):

    ...• RPA has not identified any fatal flaws with the Project design, construction, or future operating plan. RPA has reviewed the technical aspects of the Project and is of the opinion that the Project is based on reasonable Mineral Resource and Ore Reserve estimates that support a long mine life. •....

    ...SHAFT CONSTRUCTION • The main access to the Production Level of the Mine is via two vertical circular, concrete lined shafts, approximately 1,600 m deep and 6.75 m in diameter located at the Woodsmith site. Two other shallower shafts, the MTS access shaft and the ventilation shaft, will also be constructed at the site, and connected underground to the main shafts. • As reported in the Phase 1 Report, the main shafts will be sunk by North American contractor, DMC Mining Services (DMC), using SBR equipment supplied by Herrenknecht. • The SBR equipment is being substantially redesigned and some of the equipment and systems upgraded based on the experience gained by the manufacturer and DMC on the Jansen shafts in Canada. • Based on further information acquired from the latest drill hole, SM14B, the shaft lining design has been refined by Arup to suit the SBR method of sinking and the anticipated hydrogeological and geotechnical conditions. • The final design for approximately 50% of the shaft depth to approximately 750 m consists of a drained cast-in-place high strength concrete lining that increases in thickness with depth. Three types of composite lining consisting of a combination of high-strength cementitious grout or geofoam with Spheroidal Graphite Iron (SGI) tubbing have been designed for the shaft sections through the Sherwood Sandstone Group (SSG) strata and the Carnallitic Marls. • The detailed design analysis, including finite element analysis, has been rigorous and appears to have resulted in optimal lining designs. Arup and DMC are continuing to further refine the final designs. • Following the completion of drill hole SM14B, detailed hydrogeological and grouting studies have been carried out by Arup and DMC to determine the requirements for cover drilling and grouting through the SSG aquifer. The www.rpacan.com Sirius Minerals PLC – North Yorkshire Polyhalite Project, Project #2984 ITC Phase 2 Due Diligence Report – 2 July 2019 Page 1-23 proposed drilling and curtain grouting methods are reasonable and well developed. If properly implemented, the cover drilling and grouting planned should reduce the risk of encountering uncontrolled water ingress into the open shaft excavations and should be effective in controlling water ingress into the shaft during excavation to manageable quantities. • Throughout the SSG, it will be necessary to maintain a cover of probe holes drilled in advance of the shaft excavation, which will be used for hydrogeological testing and to determine the extent of grouting needed in that section. If grouting is required, these will also be used for the grout curtain. Additional grout holes will be drilled as required by the testing. • Using the hydrogeological test work from SM14B, and the latest assessment that the bulk permeability of the SSG is low, DMC has made an assessment that 13 probe and grout curtains will be required through the SSG. Based on this assessment, a reasonable time allowance of 156 days has been included in the shaft sinking schedule for cover drilling and grouting through the SSG. • RPA notes that the permeability of the SSG is considered to be predominantly fracture flow driven, which may make the success of curtain grouting more problematic. There remains a moderate risk, that higher permeabilities than are predicted by the SM14B data may be encountered, requiring more curtain grouting than presently anticipated. On the other hand, RPA notes that should the conditions prove to be better that anticipated, then less grouting will be required. The risk of additional grouting being required has been addressed in the Schedule Risk Assessment (SRA) carried out by Sirius. • The estimated advance rates assumed by DMC in the shaft construction are based on excavation experience at the Jansen mine in Canada. The rates applied in the top 750 m of the shaft average 3.3 m/d. The machines are being designed to achieve these rates, and on paper, the estimated rates appear achievable, with better than the expected average sinking rates leading to a shorter sinking schedule. These rates are high, however, when benchmarked against conventional shaft sinking rates, and RPA is of the opinion that it may prove difficult to maintain such high average productivities, leading to a potential increase in the shaft construction time. • Overall, RPA considers that Sirius and DMC are giving due consideration to all of the foreseeable risks associated with the shaft construction and are taking reasonable steps to mitigate them. Nevertheless, there remains a moderate risk that additional delays to the shaft construction may occur due to operational issues with the SBR equipment, and unforeseen ground and hydrogeological conditions particularly in the SSG and Carnallitic Marls.

    GLA DYOR etc
     
    Last edited: Oct 29, 2019
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