Sirius Minerals Share Discussion Threads

[11_percent] 09/12/2019 16:07

(I hope that I'm right in remembering that this was something to do with coal in East Kalimantan, where I saw lots of coal).

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Yes...that's the one.

[muckshifter] 09/12/2019 15:37

If you invest in anything in Indonesia amaretto1, you do so at your peril. In one year working in Indonesia, I was offered two bribes each of $1million plus for contracts on different elements of my work. They were offered in a totally matter of fact way, with detailed explanations of how the money would be paid etc. Corruption was, and probably still is, so widespread, that the Government of Indonesia passed a law, iirc, which meant that they could not be held responsible for the dishonest actions of civil servants other than actual government ministers. (I hope that I'm right in remembering that this was something to do with coal in East Kalimantan, where I saw lots of coal).

[11_percent] 09/12/2019 15:32

No.....they never owned it in the first place.....Paul Mazak and the guy from Indonesia who did own the KPs (coal certificates)ran a scam (a real one).

[amaretto1] 09/12/2019 15:01

They were swindled out of the Coal.

[kreature] 09/12/2019 14:39

That cavern was also for a conveyer transfer station. So pity about that too ?

Construction conveyor will be re-used and upgraded. Not replaced :

RNS : 'The plan is to now re-use and upgrade the construction conveyor instead of the original plan of removing that system and replacing it with a new large capacity operational conveyor system. The conveyor system, once converted to its operational configuration, would then be progressively upgraded and expanded. '

[11_percent] 09/12/2019 14:32

Churchill Mining......good grief......they did not even own the coal.

[muckshifter] 09/12/2019 14:31

kreature,
I don't care whether it's called drive 2, or Lockwood Beck to somewhere on the way to Woodsmith, or a special outing for our TBM, etc. It's the bit of tunnel which is / was drive 2 - there will not be a gap in the tunnel where what was known as drive 2 was scheduled, as you well know. Pity about the loss of your cavern suitable for lots of underground train sidings!

[kreature] 09/12/2019 14:24

"It appears to be that when the TBM reaches Lockwood the construction conveyor will be replaced by the main conveyor system while the TBM is being prepared at the bottom of Lockwood shaft ready for drive 2"

Muckshifter, try to keep up. There won't be a Lockwood 'Drive 2'.

11th Nov RNS: ' the Company has taken the decision to continue Drive 1 TBM from Lockwood Beck. This removes the requirement for the Drive 2 TBM as well as the large launch cavern required for that machine.'

[amaretto1] 09/12/2019 13:11

Churchill mineing.

[amaretto1] 09/12/2019 12:46

Still a massive risk here, hope they pull it off for LTS .... but .... it's a very very large some of money.Canadians could even screw them with the potash price.BHP Have to come in here, probably dilute by 80%.. a little better than nothing.I've been trading since the 90s.. i noted u MS a long time ago.. on a Coal mine.. can't remember .. in Asia.Or it may have been Jarvis.Any way u have been a good contributor to ADVFN.. I'm under a different name from back then.I'm going to give a tip... a far less risky proposition than SXX.XSG.. u need to take a look, it's on the brink of realising a dramatic change in washing machines etc.. it's taken many years for this Rotherham company to get were it is.But now is infectious point,The rewards will be substantial .. it will be a dyson vac moment.If i held here.. even now u could by 3 times your holding in XSGIt's not a 50/50 bet.....So when .. people say it's not worth selling my investment .. because it 3pWell if i was sat on massive losses here, I'd swap positions .. because SXX .. looks like .. u r going to end up with no more than 10% of the company .. if any at all.AIMO ...

[trev1223] 09/12/2019 12:03

Thankyou muckshifter, I always find your posts knowledgable and worth reading....unlike some that post on here.

[muckshifter] 09/12/2019 09:53

Good Morning all. Some interesting stuff on here, hidden amongst the 800 posts written, and in the “strategic review update” published, since I was last here, so here’s what I think.

Firstly it was good to see that a prediction I made a couple of years ago, that the TBM would achieve 40m/day soon after they got through the weathered mudstone on drive 1, came to fruition. And in this respect the newspaper articles that were recently referenced on here seem, as usual, ill informed. One suggested, iirc, that the 19m/day had been achieved because of softer material, which is the opposite of reality, as the machine had clearly found the weathered (softer) material less extensive than expected. Another talked about good progress because of “harder” rock, but mudstone is just about the softest material “called” rock and because of the lack of sand particles, the least abrasive, ie. it is the ideal tunnel building strata, and is as exactly as expected after getting through the weathered interface with upper layers, imo. Also I still think as posted long ago that the TBM will achieve a maximum in the not too distant future of 45m/day (and iirc, my original 40m/day prediction was made well before the slight increase in tunnel size which many here cling to as the reason for the cost increase – complete bs in my view)

So, now they are through the upper strata and through the weathered top of the mudstone, I reckon that all they have to worry about is fault zones, where they may encounter further heavily weathered (ie. softer and more sticky) material and perhaps water over a few metres length of tunnel at a fault, and the lengthening logistics chain. But I maintain my expectation that they will achieve at least 30m/day average to Lockwood.

Beyond Lockwood the situation is interesting. I notice in the update that Sirius are still talking about using the construction conveyor system as an early delivery system to facilitate early production during the underground build out phase within the poly, but they have given more detail of a “cunning plan”. It appears to be that when the TBM reaches Lockwood the construction conveyor will be replaced by the main conveyor system while the TBM is being prepared at the bottom of Lockwood shaft ready for drive 2, and presumably the main conveyor will then be installed progressively into drive two and used in part for construction as it is excavated. Makes good sense if they can do it without loss of productivity, and perhaps further illustrates my point of long ago that the increase in tunnel diameter pays for itself in easier logistics. That would just leave the extended logistics for all the other parts of the operation as potential production limiting factors, but Strabag have plenty of time to rethink the logistics so I would think they might well still make the 30m/day on drive 2, and removing arisings by conveyor to Wilton where it has a small residual value must be much easier and more economical than lifting it up the Lockwood shaft and handling it into a tip, where they will also have tip costs. You can see why I was enthusiastic about Strabag shares from that performance expectation.

The one thing in that update that surprised me a bit was that Sirius were not launching the first shaft sinker before further financing, as I thought that it was an opportunity for them to show good shaft progress in ideal excavation circumstances, in conjunction with the expected excellent TBM progress. If that had been successful it might have been helpful in financing negotiations, but I suppose if it had not gone well it might have ended up a negative in that context, and perhaps that would have drained the money away by the end of the year.

My opinion, fwliw, remains that Sirius are at the mercy of the big industry groups as I can’t see anyone financing them without involvement of a big miner who has carried out very cautious due diligence of the whole scheme in terms of construction and subsequent production, and still wishes to engage. In that “due diligence” exercise I would expect the NPV to take a hammering, but hope, and just about believe, it would still leave the scheme as an attractive proposition. I still believe for various reasons that whoever “bites” would take the step of provisionally announcing a deal before, and thereby to avoid, receivership, ie. in the next two months to the end of January, imo. But I don’t think that signals a bonanza in share price terms for holders in the short term.

[11_percent] 09/12/2019 09:04

But you will be aware that the nearby ICL operation has invested in pretty quick time to ramping up polyhalite production as far and as fast as they can, and they do appear to be shifting the stuff out without any trouble. I was trying to work out what ICL was getting per tonne, but they do not readily disclose that info, but the overall ICL accounts do not appear immediately inconsistent with the $ prices that SXX has been running with. And, note, as you plug in rather lower $ price assumptions, you have an awfully long way to go down, before the SXX project values get anywhere close to not making sense.

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"but they do not readily disclose that info, but the overall ICL accounts do not appear immediately inconsistent with the $ prices that SXX has been running with"

Can I suggest, the first thing you need to is find out what price ICL are selling at......so that you can plug that into you model for a current "value" of the mine.

Perhaps your "knowledgable and trusted people can help.

[kirtonender9] 09/12/2019 00:35

Get a life.

[holidayfunds8] 09/12/2019 00:03

clotted cream - you obviously have a lot of knowledge on how the fertilizer industry now works, and I'd be delighted if the SXX story would get rather more focused upon how a range of true, industry experts feel Poly4 will be able to break into the existing, established market, where blends and compounds make up such a high proportion of the current market.

I can readily concede there is likely to some resistance to Poly4 from the established blenders & compounders because, well, that's potentially a key feature of the polyhalite product offering, in that Poly4 comes out of the ground with 4 of the 6 key nutrients ALREADY in a compounded form (plus some extras).

I am guessing you do agree that Poly4 does have those 4 macro nutrients - right?
But that you feel that, even with those nutrient contributions, that Poly4 will not offer farmers enough of an incentive to change away from the mix of products they use today. Or perhaps, you just feel that Poly4 is new, and maybe the industry will not take kindly to any degree of change. If so, that's fair enough.

It would be interesting to see how the bankers did assess the risks here - my feeling is that CF & team were just trying to be too clever here, by trying to get such a high % of the overall funding covered by 'close to normal-rated' external bonds / loans. In practice, a greater proportion of the risk should be on the shoulders of shareholders.

But I guess few of us really know the inside view of why the funding arrangements fell through. CH & team have suggested there were worries about the risks associated with the mine construction itself, but you are suggesting that the lenders saw the real risk that the whole Poly4 end market value proposition would not fly.

But you will be aware that the nearby ICL operation has invested in pretty quick time to ramping up polyhalite production as far and as fast as they can, and they do appear to be shifting the stuff out without any trouble. I was trying to work out what ICL was getting per tonne, but they do not readily disclose that info, but the overall ICL accounts do not appear immediately inconsistent with the $ prices that SXX has been running with. And, note, as you plug in rather lower $ price assumptions, you have an awfully long way to go down, before the SXX project values get anywhere close to not making sense.

So, putting everything into the pot, I get the feeling that the established fertilizer players will not be too happy when Poly4 does come onto the scene, but my recent investment into SXX reflects my view that Poly4 has enough intrinsic nutrient value in it to be able to readily pick up a modest slice of the existing market.

But, as I say, I'd be delighted if the whole SXX debate could be more centrally focused on a more visible debate on whether Poly4 can break into the existing market in any meaningful way (say, up to the 20mtpa level) and what sort of average $ prices the product could command. However, those of a negative bent here virtually never want to get into that side of the debate, but I'd be delighted if that happened.

If I saw that Agri experts at leading UK Universities held a clearly negative view on the outlook for Poly4, then that would obviously be views that any sensible investor would listen to. Equally, though, if the same people were to hold a positive view on the outlook for Poly4, a simple person like me would take such views on board also.

In that regard, I'd be grateful if you could point me to any published material from industry experts who hold a negative view on the outlook for Poly4, either from leading UK institutions or from places abroad, as I fully agree that any such views need to placed center stage in the current SXX share price debate.

[beerboy2] 08/12/2019 21:49

Any serious investor whose done his research knows the product poly is good its all about whether sxx can deliver it , will go bust or find a big investor to allow it to continue until profitability. Its still a massive gamble but the rewards could be immense. Well worth a punt IMO, DYOR.

[kreature] 08/12/2019 20:59

Bit of a pity that there's no need for it in the UK. If there were, they might not need the train tunnel to Teesside

[clotted cream] 08/12/2019 20:47

The more sophisticated angle is to drop seeds of doubt on whether there will be real demand for the Poly4 product, especially in the tonnages that SXX is planning to shift. To be honest, I also had some initial doubts on that score, but I have now done my homework and also spoken to knowledgable people that I trust, and I now trust the evidence that the many Supply Agreements give us. And, keep in my mind that the BOULBY mine has completely moved to polyalite extraction, and the demand for the product is clearly outstripping supply right now (accepting the tonnage is far less that the SXX plan). But I'd say the chemistry is really quite simple here, and many farmers are likely to be attracted to buy this new fertilizer product.

..,........
I hope your knowledgeable trusted people are in the agricultural and fertilizer industry or have a good soil science background because understanding the product is of fundamental importance to an investment here.

Who in the industry would be interested in investing in securing a supply of polyhalite?

Presumably favourites would be those who have seen fit to enter agreements with manufacturing capacity to make compounds and blends. Oh wait, none of those with agreements produce fertiliser, they are just brokers who sell on for a margin.

The chemistry is simple, by weight over half is calcium, impurities or water. Polyhalite is a low grade commodity that dilutes a compound when included. Why is it be transported half way around the world and the European compounders continue to show no interest?

If you believe what the company tells you about the product your have not learnt anything from their recent actions.

[dp1umb] 08/12/2019 18:28

Sophisticated??

[djb3] 08/12/2019 18:23

John has got to be the most childish on any of these boards lol.

[johnwise] 07/12/2019 17:31

"A Story about Attacking Industry

Professor Ian Plimer book launch - Not For Greens

VIDEO

[kreature] 07/12/2019 13:03

First sign of a train. Looks excellent