Sirius Minerals Share Discussion Threads

[johnwise] 20/1/2020 07:19

20/01/2020 7:00am

RNS Number : 2420A

Anglo American PLC Recommended cash acquisition for Sirius Minerals

[johnwise] 20/1/2020 07:19

20/01/2020 7:00am

RNS Number : 2420A

Anglo American PLC Recommended cash acquisition for Sirius Minerals

[kreature] 19/1/2020 21:19

? :

'Even if it bids, Anglo won't be committing to develop the mine, making this an option of sorts.'

[holidayfunds8] 18/1/2020 20:22

I did say I would not post again but, hey, we are now into the end-game, so that warrants "special occasion" status.

As before, it is very difficult for us non-insiders to know what the background dynamics here are. So it is important to think for yourself, and judge how this may now play out:

1. For those lucky enough to have bought in before Xmas at around 3 pence, the safe option now is the sell and take a substantial profit;

2. But we were told that 'multiple parties' were involved, and we do not know at all much on those multiple parties; but there must now be some chance that a counter-bid will be made;

3. In fact, my feeling is that we needed at least TWO actively competing parties to trigger any deal which would be substantially above the 3.0 - 3.5 pence share price we had late last year; i.e. IF there were ONLY A SINGLE interested player then, as was pointed out repeatedly, they could just wait a while longer and save themselves 5.5 pence per share;

So I will continue to hold until at least the 2nd half of Feb, in the hope that we could see an improved offer price.

I also notice that there is hardly any mention of the Project Values here in the media or pretty much anywhere else, which feels odd. But reading the RNS put out by AA, it did sound awfully positive about the POLY4 product and the 50% EBITDA margins expected for a long-lasting asset.

So the bottom line here is that AA, and possibly one or two other players, do indeed see a substantial Project Value here:

- as an upper marker, we could use the numbers put out by Sirius in November - which effectively said $3.1bn of investment, followed by $14.1bn free-cash-flow coming back in = $11bn; some may point out that was based on 13mtpa, and that output could be substantially increased beyond that level in the future, but that is of no real import at this point in the game;

- and you might guess that AA would not be getting so directly involved here if they did not sense that they could generate a substantial amount of cash here;

- so, you can knock the Project Values around any which way you like;

- for example, maybe AA are thinking $3.1bn capital cost, and then getting back maybe $5.1bn in positive cash flow once the mine is up & running = $2bn net, so they think paying $500 million for that flies OK;

- but I would not personally invest $3.1bn now, to get $5.1bn back later; my sense is that a balanced & risk weighted view might be for sums of $(3.1)bn now, + $7.1bn coming back later = $4.0bn NET.

The above is just me playing around with some big numbers, but the main point here is that:
a) AA - and possibly one or two other players - will now have assessed how much cash the whole Sirius mine project can generate over the coming years - maybe they feel the project is a marginal one, maybe they judge they will end up clearing $2bn, or maybe they think a risk-weighted outcome will be much more than that - maybe, say, $4bn; that's still a fraction of the $11bn put out by Sirius themselves;

b) As a shareholder, my feeling is that a $4bn project value does not appear foolhardy, and I accept that any bidder will want to keep the bulk of that value for themselves. But - IF there are at least TWO players active here - then my own feeling is that SXX shareholders might expect the secure a slightly bigger slice of that overall $4bn pie.

I was 80% sure that buying SXX shares at 3.0 pence was a good idea, but my confidence that we will see a (materially) higher bid is, I'd say, maybe around the 50:50 mark. But that's enough to keep me holding until close to the end of Feb.

Anyway, think for yourself, and remember it aint over till it's over.

[kreature] 18/1/2020 17:36

Everyone seems completely lost here (or perhaps it's just me). The only certainty was the 5th Feb, until someone said actually it might be sooner. So now there's nothing but limbo. Investors can't be certain of 5.5, and shorters can't be bothered in case they get stuck with 5.5. Better off just suspending the shares. The uncertainty is off the scale. imo

[sentimentrules] 18/1/2020 09:03

SS shorts down is not really that straight forward . Example they reduced dramatically in periods in KIE MTRO and even Carillon

Every circumstance unique. Haven't drilled down its relevance here but a general template of shorts reduced doesn't always mean price goes up

[cpap man] 18/1/2020 09:00

shanew4817 Jan '20 - 20:13 - 241 of 245

Will a definitive date of when the mine will be up and running be possible at some point this year? presumably if finance is due to be raised towards the end of this year then prospective investors/partners will want to be given an idea of when the mine will open before they pledge to invest?

Parob18 Jan '20 - 07:39 - 242 of 245

I would have thought they will have a better idea of timelines once the DFS is finalised. We are told this is on schedule for H1. In fact HL said they are ahead of schedule in the most recent interview (from 2 mins, 8 seconds) so I think we are looking at April or May for the DFS news and hopefully timings for production will come with it or soon after.




Parob18 Jan '20 - 08:11 - 243 of 245

Worth noting that in March 2019 Shard Capital had a share price target of 22p on completion of Feasibility study (see page 10 in this research note):

hxxps://www.emmersonplc.com/wp-content/uploads/2019/03/Shard-Capital-EML-21-3-2019.pdf

This was BEFORE news on the two additional projects.

Preliminary studies on two additional projects:

Sale of salt by product and the production of sulphate of potash.

Including these projects takes the total attributable NPV10 for Emmerson to over US$1.8bn, with life of mine average annual post tax free cash of around US$300m.

And BEFORE the 72% Resource Upgrade news in October:

(27/10/19) Emmerson Plc, the Moroccan focused potash development company, is pleased to announce an upgraded JORC compliant Mineral Resource Estimate ("MRE") for its 100% owned Khemisset Potash Project in Northern Morocco ("Khemisset" or "the Project"), delivering a 72% increase in total resource to 537 million tonnes ("Mt") of potash with an average grade of 9.24% K(2) O. To view the press release with the illustrative diagrams please use the following link:



mad foetus18 Jan '20 - 08:36 - 244 of 245

Also remember that EML is eligible for government subsidies that reduce project cost by 10%.

Parob18 Jan '20 - 08:42 - 245 of 245

Yep that’s right MF, that news came out in December, again after those share price targets were released in March when Shard had a target of 106p on first production. Would love to know what that’s gone up to following all these developments.

[cpap man] 17/1/2020 16:10

Dump SXX and buy EML

Simples!

[dp1umb] 17/1/2020 13:10

Kreature The price is bang on it is telling you the market is about 80% sure the deal will go ahead at 5.5p with about 10% that AA will walk away and the company will then enter administration, it also allows about 10% for a higher offer to come along.

[kreature] 17/1/2020 12:11

Why wouldn’t AA lower their ‘discussion217; to say 1p? They could probably name their price, and the share price would probably follow. The current share price feels highly artificial to me. Isn’t the current share price only built on a ‘maybe’ ?

[cpap man] 17/1/2020 09:25

The extremely exciting prospects @ EML are obviously attracting investors to EML

The Uber bullish chart patterns @ EML must obviously also be really rather helpful to EML

[kreature] 16/1/2020 23:55

Thanks for the link, have to make plastic heavier.

[kreature] 16/1/2020 01:17

AA probably a good fit as they have previous experience of tunnel boring an even wider tunnel in 2015, see youtube.

[beeezzz] 15/1/2020 21:28

Some you win and some you lose...I'll wait for AA to pick my share on the cheap...

[dp1umb] 15/1/2020 20:56

11 percent where’s John gone?

[11_percent] 15/1/2020 19:24

dp1umb
13 Jan '20 - 10:33 - 46629 of 46662
0 2 0
I see there’s a proposed bid of 5.5p
To my detractors (you know who you are)
Just check my post on Dec the 5th!!
John Carla any thoughts?

========

John / Carla any thoughts?

Definitely not......low IQs.....incapable of any thought.

[amaretto1] 15/1/2020 14:47

It was the diagram of how deep those Shafts have to beMind boggles.

[amaretto1] 15/1/2020 14:46

i for one listened .. saved me a small fortune.... traded it ever sinceCheers MS K under pressure.