Sirius Minerals Share Discussion Threads

[blueball] 10/5/2017 12:02

John wise is best ignored an attention seeker not to be taken seriously.

[fez77] 10/5/2017 11:47

Thanks PPVN. Amazing depth of knowledge and understanding that you have of the various processes involving SXX. Many thanks!

You don't need to worry that I would rely purely on posts on this (or any other)thread as to whether to buy a share or not. I like to take a sounding from all possible sources and this thread is of assistance in that respect. My principal current holdings are in RRS, ACA, HIK, JRP, RPC, and BT.A so I am well diversified and have only dipped a moderate toe in SXX. However I am quietly confident of making an ultimate profit from SXX. I like the fact that a raft of Directors bought in November and are "putting their money where their mouth is"!

Incidentally I have taken a punt on XAR also. An interesting share which goes up and down on a regular basis and is in and out of favour. It specialises in 3D printing which is as likely (in my opinion) to be as important in the future as the multi-nutrient products of SXX.

[mr.oz] 10/5/2017 11:28

haha ...
good thread with the odd exception now

[coolhandfluke] 10/5/2017 11:21

PPVNDon't beat yourself up about it. You lost me after Hi.Cheers.

[ppvn] 10/5/2017 10:53

Hi Casapinos. Well that is quite some reward... Stick the kettle on, strap yourself in, and get ready to be bored to tears. The summary is yes, you have everything correct. Each loan note has a par value of $200k, with the conversion price being $0.3076, thus representing 650,195 shares. The $350k figure means that if the underlying shares become valued the sterling equivalent of $0.538 for 20 consecutive business days, Sirius would have the ability to redeem the bonds (since if the shareprice goes above that amount they could simply issue the appropriate amount of shares at market rate, sell them, and pay off bondholders with just over half the amount of equity being issued). This scenario however will not in my view come about – since the funds with the bonds are selling off our shares as we trade above the conversion price. If the price did rise that high, the funds would either sell as quickly as possibly thus bringing the shareprice down, or convert into equity and sell at their leisure going forward. It’s really just a safety feature effectively – I would hope the reason the clause has been included is that should a large investor be attracted to the Sirius story, they will of course be aware of the outstanding convertible loan notes. In order to buy a sizeable position, where is the majority of supply for shares coming from at this point in time? The convertible loan note holders. So if the noteholders were to get wind that someone with rather unusually deep pockets was buying, they’d stop selling shares at 24p, or 26p, or higher – they’d hang on for dear life. This way, if the price gets really very high (it probably won’t – large buyers will be well aware of what is going on), but the funds can be prevented from pursuing this path. Which leads me to believe that the convertible fund holders are just recouping their investment and effectively distributing shares on our behalf. I also think it a fair assumption that the Stage 1 financing was partly funded by convertibles because investors were “only” really prepared to stump up c.$800m rather than the full $1.2bn upfront. Which leads me to my next tangent. All companies will have to release a balance sheet each year – I don’t know about you but I really rather like going through these as it is a snapshot under the bonnet of corporate veneer that all companies will attempt to build. I’m sure that you’re familiar with them, but for clarity’s sake let’s consider a balance sheet to be a seesaw that needs to be level at the time they are produced – that is, with the assets on the one side and the liabilities on the other cancelling each other out thus justifying the valuation (and therefore shareprice) of any company. Anyway, if we consider Sirius’ balance sheet as of last summer – on one side of the seesaw there will be the assets; so planning permission, mineral rights, any property / plant / etc that Sirius own. Really, there wouldn’t be too much in terms of physically tangible assets that are readily accessed, right? (I haven’t done this exercise for last year – it’s just an example). On the other side would be the liabilities – debts, staffing costs, etc etc, and the liabilities must equal the assets thus justifying the valuation. So let’s assume that in order to get to the market cap that Sirius had last summer, the plans, rights, all the work up to that point had culminated in the company being worth £800m (I don’t know the real number so again, just an example) and really that’s what our assets were – ideas and permissions that need a huge amount of cash injection but they nevertheless were valued at that. Now let’s consider our current situation (and I have briefly pulled some of the figures on this one). On the balance sheet, on the one side we have our assets – cash and cash equivalents of £611m. Exploration costs and rights had a YE valuation of £201.9mm in the notes, however no value assigned in the consolidated statement. Our convertible bond holding is listed as a liability under the “loans from subsidiaries” since I assume we drew down that as cash to bring it onto our balance sheet and the subsidiary will be wound up as the bonds are converted. As a little aside, I also note (with piqued eyebrows) that we have £9mm “goodwill̶1; that was acquired in 2011, no prizes for guessing what will happen to that value in the coming years... Anyway, feel free to go through it in more detail, but the summary total is assets and liabilities of £836mm balancing out – we had c. 4.2bn shares in issue, the price was about 20p, so £840m and everything is balanced and all is well in the world. But notice this – instead of our plans / permissions / etc etc being valued at the value assigned to them last summer, – essentially at year end it was our assets that gave the valuation and it was tangible in the form of cash. My point is this. Our seesaw now has bags of money on one side, and as the mine is built we will shift it from being bags of money to a physical, tangible asset in the form of a mine. At this point in time, our plans / permissions / etc etc are fundamentally in my view undervalued and indeed are not even assigned a value on our balance sheet. Its meaningful. Our shareprice is where it is because we have 1.1bn shares to sell around this price, and we won’t be moving anywhere fast until we do. I’m sure by this stage you know where I feel the price will go next, but I can’t say when for sure. Actually, I’m sure by this stage nobody is reading anymore, but that’s my fault for being so full of hot air.
Which brings me to the Stage 2 financing – it is larger than Stage 1, however, we will have physical assets that any loans or other capital structures can be secured against. This is a huge difference. Consider the interest rate or amount you can borrow on a loan when its unsecured or secured from your bank, for example. That being said, people need to keep in mind that this company needs to raise an awful lot more cash and how that happens is anyone’s guess. I hope it will be debt, and with any luck it will be, but that is a big unknown at this stage. Anyway, someone asked if I was a significant holder. I’m not, in the broader sense of the word. I have a proportionally larger share of these erm shares in my portfolio, but that’s because it’s important to diversify your holdings and always keep in mind every share can go to flat zero. Please do not make investment decisions based on anything in this post, or previous missives I have made. I’m not accountable to anyone reading this, and you have no recourse to me should you lose all of your money. I personally probably own a few too many of these shares, but the reason for that is another matter entirely (more due to my opinion of macroeconomic factors), and I’ve already gone on far too long.

[ccr1958] 10/5/2017 09:39

Hear, hear, hazl !

[hazl] 10/5/2017 09:26

Fez that's interesting and as PPVN states,marketing is what it is all about just now and that includes interest on billboards.
Clearly then each and every post is relevant and of value.....some of course being of more value than the next!.

So what, if some people here are just copying the funds and buying and selling on the dip?
It provides liquidity.
I am more a macro person myself and all the pointers look to agriculture being more and more important in the future and this appears to be valuable stuff.
How refreshing in this day and age for it to be a natural product instead of the chemical 'nasties' that have been used, ruining our environment.
I hope Sirius do well.
They seem a good company to me and after all have attracted a lot of attention from those with 'big pockets'.

IMO

[not my real name] 10/5/2017 09:15

Mr Oz,

My apologies. An unforgivable error!

NMRN

[ccr1958] 10/5/2017 08:54

Daaaaaaaaaaaaaaaaaaaaaaaaaaaaaave, what price you buying back ?

[mr.oz] 09/5/2017 22:36

NMRN, and I'll second your most recent insightful post and intelligent reasoning.
I see the term bigot is missing, however

[fez77] 09/5/2017 22:29

Some great knowledgeable and helpful posts here, esp from PPVN.

PPVN - are you quite a major holder?

Interestingly from Hargreaves Lansdown website, SXX was Second in the list of Most viewed shares today and First in the list of Buy/Sell ratios with 73.89% being Buys!

[plasticjohn] 09/5/2017 21:55

ppvn, I'll second casapinos' thanks for your insight and reasoning; very informative.

[not my real name] 09/5/2017 21:54

Johnwise,

You have your own thread next door. Please use that one for posting your banal, sanctimonious, narrow-minded cr@p and leave the grown ups to discuss the object of the thread...........Sirius minerals.

NMRN

[casapinos] 09/5/2017 16:25

PPVN thanks again for your insight - as a reward can I offer you a few more observations / questions/clarifications sought. As ever feel free to spend your time doing something more useful.
I have re- read the 2 nov RNS and now thinki understand at least some of it.BUT

Was the recourse to the Convi issue because the company though the market just wouldn't bear a bigger placing/ open offer? ie the bond buyers were willing to buy the bond but not take the risk of owning stock? are these bond buyer fundamentally different institutions?
Can I infer from the para explaining the call value for the first bullet you reference about SXX right to call if the "shares underlying a bond being worth more than $350k" that the bonds were issued in tranches of $200k and thus that the operative share price for bullet 1 is about 42p ie 350/200 x the initial conversion price of 22p ish?(or am I more confused than I thought?)

Can I assume that SXX would exercise this option if the conditions apply and they could fund it with cheaper money, another placing/ open offer?
As you see your helpful and informative posts generate the opportunity for work education of the ignorant - maybe you'll reconsider your posting strategy! _ though I for one hope not.
thanks again (even if you are fed up with me)you have informed and stimulated my thinking.
Reposting in the hope of fixing the formatting caused by the eejit above

[ccr1958] 09/5/2017 16:11

Hey Daaaaaaaaaaaaaaaave , what price you buying back in ? Good call ppvn !!!

[casapinos] 09/5/2017 15:59

PPVN thanks again for your insight - as a reward can I offer you a few more observations / questions/clarifications sought. As ever feel free to spend your time doing something more useful.
I have re- read the 2 nov RNS and now thinki understand at least some of it.BUT

Was the recourse to the Convi issue because the company though the market just wouldn't bear a bigger placing/ open offer? ie the bond buyers were willing to buy the bond but not take the risk of owning stock? are these bond buyer fundamentally different institutions?
Can I infer from the para explaining the call value for the first bullet you reference about SXX right to call if the "shares underlying a bond being worth more than $350k" that the bonds were issued in tranches of $200k and thus that the operative share price for bullet 1 is about 42p ie 350/200 x the initial conversion price of 22p ish?(or am I more confused than I thought?)

Can I assume that SXX would exercise this option if the conditions apply and they could fund it with cheaper money, another placing/ open offer?
As you see your helpful and informative posts generate the opportunity for work education of the ignorant - maybe you'll reconsider your posting strategy! _ though I for one hope not.
thanks again (even if you are fed up with me)you have informed and stimulated my thinking.

[dp1umb] 09/5/2017 15:53

Yaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaawn

[johnwise] 09/5/2017 15:31

14:59 09 May 2017

Sirius Minerals foundation launches community grant programme

First year awards from the foundation will prioritise grants of between £500 to £5,000.

[johnwise] 09/5/2017 15:31

14:59 09 May 2017

Sirius Minerals foundation launches community grant programme

First year awards from the foundation will prioritise grants of between £500 to £5,000.

[ppvn] 09/5/2017 14:15

Ha ha coolhandfluke. Boring myself too I'm afraid to say. Think I'll take some of my own advice and check back later this year...

[squidsgone] 09/5/2017 14:12

People, charts are for when the share is without shocks to the system and relatively benign... some way to go here for that