This guy Hauchen is a great guy and very good news for Freeport Teesside and for SXX. He and CF seem to be close buddies. And Hammond , for all of his weak kneed vaccillating attitude to Brexit, is a strong proponent of the Northern Powerhouse.
Hammond needs to score a few points for his CV right now, and a measly £2 billion loan guarantee that cannot fail ( in fact the loan now ensures early success and possible 2021 Poly 4 rolling off the MTS in Teesside ), with all of the attaching fees plus the start of some flow back into the Treasury coffers.
The latest RNS reads well, with lots of confident assertions on meeting targets.
I have to say that I am feeling good about it. And it must be time soon to re-constitute the Mill House Gang for a pie and a pint. 40p plus and I will happily buy my round in.
My understanding that Sirius will pay an amount upfront amount to secure the guarantee.
That's starting to sound like an 'insurance premium', with the Government acting as the Insurer AND lender as well as ultimate beneficiary of increased tax revenue. Nice little side line for the treasury.
On the latter point it wins whoever ends up holding the equity in the completed mine.
Despite the odd cautious comment on Poly4 pricing and St 2 financing, I can no more see this failing to open and meet its planned targets than Jeremy Corbyn launching a nuclear missile or Anna Soubry marrying the lovely Jacob Rees - Mogg.
Just a bit sad we cant complete and open in 2019.
I hope a copy & paste error..."Sirius has signed contracts with a number of big agricultural suppliers, which have agreed to buy a total of 4.3 tons of polyhalite a year when the mine is up and running."
Born: July 15, 1974
Status: married with two children
School: Hale, a fee-paying independent in Australia University: Perth, Western Australia
First job: trainee accountant at KPMG
Pay: £372,000 in 2016
Home: in a Yorkshire village
Car: My favourite mode of transport is my 1953 Harley-Davidson panhead chopper motorbike
Favourite book: product handbook for Poly4 (a Sirius Minerals fertiliser)
Film favourite: Star Wars.
Music: My daughter playing her oboe
Gadget: Herrenknecht shaft-boring machine
Charity: Sirius Minerals Foundation, which supports local community projects
Last holiday: Hong Kong
Chris Fraser usually swims 2½-3km in a pool, lake or the North Sea before driving to Sirius Minerals head office in Scarborough.
The chief executive has no regular pattern to his day. I could be briefing investors in London, Miami or New York, or talking to customers in southeast Asia.
He spends about one week a month abroad. When in Yorkshire, he is usually home by 7pm.
Fraser is an endurance sports fanatic. Last year he completed a half-Ironman triathlon, and he has signed up for a long-distance swim in the Thames this year. Its daunting 14 kilometres of swimming. Its just you and your thoughts.
In a few years from now, Chris Fraser could be one of the most popular men in Yorkshire provided his outlandish project goes to plan. The 43-year-old is the driving force behind Sirius Minerals, which is digging the biggest mine seen in Britain for decades to tap a rich form of potash-based fertiliser beneath the North York Moors national park.
When the company starts extracting polyhalite in 2021, Fraser will begin signing fat royalty cheques. Local landowners such as the Crown Estate and the Duchy of Lancaster are in line to pocket $4.9bn (£3.5bn) over five decades.
For an area whose economic decline is exemplified by the faded Victorian splendour of Scarborough, it is a colossal influx of cash. Fraser, a bluff former banker who was born in Somerset but grew up in Australia, will also create 1,000 jobs at the mine, plus 1,500 in the supply chain.
Sirius, he says, will help regenerate an area where there had been nothing but poor agriculture and very seasonal tourism. He adds that prior to the companys arrival, if you wanted a high-paid job you would have had to leave.
There are several substantial obstacles to surmount, however. For one thing, Sirius will have to drill down 1,500 metres to reach the polyhalite deposit. It will also have to carve out a 36km tunnel to carry the ore to a processing plant on the coast, where it will be crushed, turned into granules and shipped overseas.
On top of that, Sirius will have to convince farmers that polyhalite is as effective as other potash-based fertilisers. The project is a monumental undertaking, and Fraser has been likened to the 19th-century pioneers at the heart of the Industrial Revolution. Does he ever feel he has taken leave of his senses?
No, he shoots back, with a chuckle. Technology has moved on from the days of Brunel. Everything weve done, people said we could never do.
Last year, Sirius broke ground on the first stage of the mine, which involves boring two shafts 6.5 metres in diameter. To pay for this, Fraser drummed up $1.2bn from shareholders and other backers. The mining and agriculture tycoon Gina Rinehart, Australias richest person, put in $300m.
Fraser needs a further $3bn to complete the tunnel, five metres in diameter, that will convey the polyhalite rock to the processing plant on Teesside. Sirius will use a taxpayer guarantee scheme to underpin the debt, for which it will pay the Treasury a fee.
Now were into the fun stuff. Weve been through the pain of the planning process and getting the stage one financing done was hard, says Fraser.
The chief executive hopes to secure letters of commitment from creditors before the end of the year. Sirius has signed contracts with a number of big agricultural suppliers, which have agreed to buy a total of 4.3 tons of polyhalite a year when the mine is up and running. Winning more of these deals is crucial to getting the banks on board.
Sirius is quoted on the FTSE 250 and has a market value of £1.3bn. Some analysts believe it could be worth several times this figure in the future, if the mine pans out as Fraser hopes.
It aims to tap 2.6bn tons of extractable polyhalite in a seam estimated to be 70 metres thick and to cover an area of more than 775 sq kilometres. By 2026, it should have reached full annual production of 20m tons.
According to Fraser, Sirius will export fertiliser worth £2.5bn a year, cutting Britains trade deficit by several percentage points.
The mines operating costs will be about $30 a ton. Potash currently trades at nearly $300 a ton down from $500 in 2014, but still high enough for Sirius to generate healthy profit margins. At least, that is the theory.
The problem is that no one, not even Fraser, can predict exactly how much farmers will pay for polyhalite, which contains potash, magnesium, sodium and calcium four of the six nutrients that are essential for plants to grow. At present, it is a niche offering, produced in relatively s
I am ideed most gratified that small morsel of bait was deemed worthy of the talking
Your steadfast and enduring position (no doubt always objective - in your views and despite all the evidence) ...........can only be admired.
Since Fraser appeared on the scene, Sirius has grown from a valuation of some £130m to a present value ten times that. For shareholders who have sat on their position over that 7+ year duration, they have roughly doubled the value of their stake.
But as ever and until this reaches (assuming) its endgame of paying back those holders with the much mooted 100y divi stream, there remains valid argument that doubt remains.
Fine, that's what still keeps this speculative. Though now far less speculative - and it is of note that so so many of those repeatedly raised doubts of the past have since been bulldozed under with the panning out of the co's think-plan-do approach.
Those floating clumps of straw flotsam are getting smaller a scarcer as time passes gentlemen.
Prominent risks ahead?
St2: co negotiating with gov to maximize the cover, publicly stating: "essential" I see as negotiating. Get it away - large risk reduction.
Build: primary risk re delay/cost overrun? The shafts. That risk exacerbated for shareholders from significant gearing from borrowings. DMC - history known. Get to shaft bottom - large risk reduction.
good to see us back where we were a while ago, hopefully its onward and upward from here. I think we should get some more news on trade contracts soon, as we have had bits of information for months now talking about ongoing talks potential new customers! that would boost the sp a little more also.
everything seems to be going to plan with this share, and i don't know if that's a good thing or whether i have just jinxed us! but small changes in sp don't really matter when the majority of us are here for the £2 a share.
I don't think that "de-ramp" will have been of sufficient quality to entertain GK!
Ramping/de-ramping: emotive terms implying talking one's own book. Most on here are cheerleaders for SXX who believe that Woodsmith will deliver a wall of cash and that the market has not yet latched on to the company's potential. I wouldn't call them rampers. A few, I presume like yourself, don't have a financial interest, but have a professional or personal interest in the Sirius dream and can provide an alternate point of view. And as such will be castigated as de-rampers.
The irony of GK's post of yesterday is that he has been accused of both ramping and de-ramping at various times....
Worries I would cite include the D-walling completion being put back from April to the end of the year, the failure (to date) to find the 3rd party that was supposed to finance the port, the falling out with AMC and Hochtief, and the reliance that Scrimshaw has attached to the Government guarantee. I'm also on the page that the conversion take-up of not much more than 20% of the outstanding bonds, despite the underlying threat of the Dutch auction and "reminder" that any dawdlers would be converted at par, hints at some chinks in the financing armour.
Now I wonder if that passes GK's test of an entertaining de-ramp?
This line from Staley seems like quite firm intention for the route ahead post this CB offer closure:
"We are pleased with the level of participation in our tender process. ...This has enabled us to facilitate an orderly conversion for bondholders and optimise our capital structure ahead of stage two financing later this year."
Expect news on St2 re the commitment from lenders and outcome of the level of gov guarantee in coming months.......and of course, it will an all debt raise......unless the co have decided to waste the last two years!
It such a great disappointment to me that there is just not the quality of deramper here anymore, there's no entertainment value
GLA. This will all be something different with St2 bagged. Build risk is all that will be left between where this then is and where it goes.
The take-up seems remarkably high to me. The convertibles are incredibly attractive to hold (I wish I had some - and if I did I would not have accepted this offer) and surely only a few would want or need to get out promptly. It is clearly good for the company as money is saved and the total number of shares after conversion is (almost) unchanged. Some of the new shares may be sold after 23rd so the could be a dip, but surely only a buying opportunity.
The big news now will be the terms of the second tranche financing. If this is all debt (which is the expectation), there will be a significant boost to the stock. And if there is a bit of dilution this is a very solid company which could stand it easily. Very dangerous to be out IMHO.
And the 47p price before financing was based on nothing but speculation in what was then a minor stock. It is completely irrelevant. The financing was a very substantial achievement and everything has gone right since.
If you have sold go and look for your next investment because your wrong again sell on highs buy on lows my orders and in with my broker and its not quite there yet about 3% since your first posted sell
We will always welcome different opinions and I believe that the 32 sell was so hard to see what would we have done without your post. Thats one example every time sell sell sell I believe along with others you missed the boat if I sold a few days ago on your post I would have missed 3% plus you see when buying out off aim you have to pay stamp duty which depends how much you invest can be expensive. I just dont understand people that sit and type on shares they dont hold what even post on a board, if it was me I would be looking for my next buy dyor as they.
First round fundraising was based entirely on new equity.
Second round is expected to be debt. If that doesn't happen, I cannot imagine a pure equity financing, though there may be an element of both or other alternatives.
The share price may drop, but where did you puck the 15p from?
The project is progressing on plan, on budget, and there are banks lined up to lend the cash, and the government in line to underwrite a chunk. The IIs will not get a say in that, unless the banks change their mind, and equity forms some of the fund raising.
This is what happened when first finance was raised;----
After hitting the phones yesterday, the bookbuild did raise £370 million from new and existing institutional investors, but at an issue price of just 20p. That's a 46% discount to the 37p market price at Tuesday's close.
At a 46% discount to the current market at the time. Any long term holder cannot ignore this information. The price at the moment is 29p I just cannot see how this can be maintened, never mind, how possibly, SP rising to 40 or 50ish until this hurdle is jumped. GLA holders.
Of course it will never mean much difference to the buy and hold gang , but to the more experienced mug who has been taken to the cleaners a few times it is an opportunity to bag a load more shares. We all know this is a winner long term , it's a shame to see profits wiped out when the warning was in the RNS. I was happy to sell at 28.something and expect to reinvest the same amount at about 21/23 for a 30% turnaround , then hold long term.GLA
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