Salt Lake Potash Share Discussion Threads

[elviron] 15/12/2020 08:53

And in breaking news, SO4 CFO has gone over to GGP as their new CEO.

Lucky GGP!

Hmmm, no RNS from SO4 yet...another HUGE red flag from this wonderful company.

[dartboard1] 15/12/2020 08:23

No bank will let a pre-producing resource company take out an fx swap prior to having the underlying debt instrument... I know it's fun to have a dig at everything that goes wrong, but sometimes things just go against mgmt, ... you can't build too much contingency in either as Taurus only want to lend them what is sufficient to get the job done. I'm not excusing all, just some...

[elviron] 14/12/2020 21:08

Dartboard,
To say that this is a major Rooster up would be an understatement. We were told in the summer that the Placing was not only going to fund to production but it was also going to provide a substantial buffer into ramp up. Now where's the buffer gone? There is none.
Regarding the FX, you say that you do't hedge until you have exposure but you are missing that SO4 had exposure to that debt from the point that it became part of the "final" funding package. Evidently, as look what happened! They either should have built a buffer into the debt itself to cover FX fluctuations or they should have used a portion of the placing money to hedge. It's pretty pathetic - currencies change value. At the time, the dollar had had a really strong move for months, who could possibly have forseen that it might have a correction! LOL.
Gas pipeline is another co k up - if there's a material chance that the funding arrangements aren't going to come through on time, then have a back-up plan. Ah sorry yes that's right, good old Tony did have a back up plan - screw investors over with another placing.

[1234gold] 14/12/2020 19:52

No-one knows what the pressure points on SO4 were. It could be related to EPA not having appointed a full time chair yet - their website shows there's no Chair (can they make a finding without a Chair ?), if this is the case does it mean the final result could have been deferred until they find a chair ? If not, then perhaps that would have taken the decision into the WA caretaker period for the upcoming WA election.

Who knows.

[dartboard1] 14/12/2020 10:21

In all fairness also, BHP had to revise up their potash project budget by 10% last quarter.. and they'd have some pretty heavy hitters looking at those costs...

[dartboard1] 13/12/2020 21:39

Agree that Tony is a bit of a salesman and very non specific when he's interviewed... A few months ago I was saying he never mentioned he was on budget and there was risk, but I'm happy to have topped up last week at 24 (should've waited a few more days) and look ahead to what the team can do over the next few months. Can't expect a completely smooth ride on a development like this

[elviron] 13/12/2020 18:58

aja2, appreciate that your post was before the release of the podcast. IMO it does not adequately address the reasons. the gas pipeline was a known all along and only A$18m - if that's all it takes to seriously derail proceedings then you have to worry about management. the majority of the placing will go towards intangibles that are essentially overspend and mismanagement of funds. But it doesn't really matter, because Tony knows he can always rattle the tin again.

The conditions for the final $30m debt are not yet satisfied, and it would not surprise me if Tony comes round with the hat again in February/March. Remember that in the summer shareholders were told that the Placing was going to provide a very significant buffer going into the ramp up phase. Is there any buffer at all now?

[aja2] 13/12/2020 15:48

This is the first project so lessons will have been learnt thankfully. We will soon see if they keep to schedule and the project commences as forecast.

[aja2] 13/12/2020 13:47

The podcast was released after my last message; yes I listened to it on Friday afternoon; it addresses the reasons why the money was raised and when the $30M was raised in the conversation the CEO was effusive when he said he had no intention of raising more funds in the near future and undertook scenarios to ensure that there are sufficient funds for this project and the currency would be locked in next week when the funds are released. Would I have preferred no further dilution? Of course I would, but the gas pipeline was out of their control. Could they have hedged the currency situation? Yes, but it could have gone the other way and they would have had more funds. Will the funds get them over the line quicker? Probably not but they are slightly ahead of schedule and I wouldn't be surprised if they completed earlier given the pace of construction thus far.

[elviron] 13/12/2020 11:45

Aja2, it is not going to get them over the line sooner. If you listen to the recent Vox podcast you will hear that they expect the first product end of March/ early April 2021.

This placing is due to poor management of shareholder's money. If you look at the wording of the RNS you will see that one of the conditions was an equity raise of at least A$30m - that is not something they snuck in at the last minute - you can't alter term sheets willy nilly. That condition must have been baked into the terms when it was first announced on the 5th of August. I can see no other way, and if that is the case we were knowingly and willfully deceived.

Trust is a HUGE issue going forwards.

[homebrewruss] 11/12/2020 15:40

SO4 on the vox podcast:

[aja2] 11/12/2020 09:25

I'm impressed with their progress thus far; if this gets them over the line sooner then the raise will have been worth it.

[pre] 11/12/2020 08:57

can we trust management going forward? The fund raising at around 22p was a bolt out the blue and will take some time to feed through - let's hope they spend the money wisely

[aja2] 10/12/2020 23:40

A$52M funding agreed which releases the Taurus loan; A$5M open offer to existing shareholders will take place later this month.

[rjmahan] 10/12/2020 14:01

What do you guys think the current SOP price is ? Do you have any good sources ?

[noirua] 10/12/2020 11:11

.Existing shareholders have been cooked by way of a pre-publicised fundraise at a larger % discount than necessary.


May 2018 - Align Research Report to compare how things have gone:

[dearg doom] 10/12/2020 11:05

A placing to raise money favours insiders. Prefer an underwritten rights issue and prospectus. Expect the normal excuses will be expressed by management about timing issues and cost-efficiency.

Meanwhile, shareholders will suffer dilution, while others benefit by a 25% discount. Not exactly a fair outcome.

Difficult to see how management had not anticipated this event in the months beforehand. How come the lack of interest to the share placing at a smaller discount. Obviously, other issues are at play which will be smoothed over by management in podcasts.

What was the extra capital to finish the project and what amount of cash is left over to expedite faster growth?

Had thought SO4 a bit different from the others. Suppose if you meet one kangaroo, you've met the lot!

The first punch is the price of the placing versus what I paid. The second punch is to sell out of the stock now and take a double punishment by missing out on the prospects at a lower rate of return.

No certainty ever in investing in what is read or stated and then taken as fact. Always room for management to backtrack and doublespeak.

We start again from 22.5p in hope.

[adorling] 10/12/2020 09:14

Good to see the finance is all concluded tomorrow and it is full out to 1st production. Huge potential going forward. I have added another 50k this week.

[aja2] 10/12/2020 07:32

I'm not going to make assumptions about whether or not the board knew they would have to raise more capital so soon after the last raise; I don't think they would have wanted to so not sure that trust is at stake. It's always the same problem; the ones who hold the purse strings can change their mind and alter conditions or withdraw finance. Once this first lake is up and running in a couple of months time it won't matter and SO4 will be in a lot stronger position if it needs to raise further capital for future projects; I foresee the share price will also be significantly higher than 22p at that point.

[gisjob2] 10/12/2020 06:59

Aja2,

Agreed, but still a bit of a blow in the short-term to any investor who listened to the board over the last few months and now sees a large raise at a discount of around 30% to the price they invested at. Trust does matter. Hopefully there is a positive spin on this and pushes things on a bit. Around 22p could be a good entry point in the long-term. It looks a cracking project with more to follow.

I've been quite lucky here because I sold before the drop due to seeing another short-term opportunity elsewhere and thought that SO4 was probably going to do very little this side of Christmas. More luck than judgement and didn't expect this drop but it does present a decent entry point now and certainly one to consider if around 22p

[aja2] 10/12/2020 00:45

To me, it looks as if the company has progressed faster than initially expected; as a result more plant equipment has been ordered and installed than expected at this time in the project; the fully funded you alluded to was including access to finance; perhaps the financiers were not ready to release funds earlier than anticipated and/or were concerned at the rate of cash depletion due to the progress. The company is already ahead of schedule; this will ensure that finances won't hold up progress and production in Q1 is more or less guaranteed, perhaps even mid Q1.