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Sirius Minerals Share Chat (SXX)



Share Price: 18.75Bid: 18.50Ask: 18.75Change: 0.00 (0.00%)No Movement on Sirius Minerals
Spread: 0.25Spread as %: 1.35%Open: 18.00High: 18.75Low: 18.00Yesterday’s Close: 18.75



Share Discussion for Sirius Minerals


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JuiceforLife
Posts: 13
Off Topic
Opinion:Buy
Price:18.75
Dilution
Thu 23:39
Please could someone explain in simple terms what we can reasonably expect to our SXX shares when dilution happens?

Does the price go down? The amount of shares go down?

And does this happen immediately on announcement of stage one finance?

Thanks in advance.
 
Clamp
Posts: 3,291
Off Topic
Opinion:No Opinion
Price:18.75
RE: Broker Targets
Thu 21:11
Cheddars

Agree with your point about being tied to a Market Cap covenent - we could also be vulnerable to shorters etc.

GK

Appreciate your points derived from brokers reports. I suppose the question that it raises is whether they see the sp rising gradually over the 5 year period to 138p etc (as project risk reduces through the development). However, the fact that we get funding is a huge de-risking (because it means that the project is actually happening) and the actual building of the mine (oddly) seems smaller de-risking in comparison. For these reasons, I believe that current shareholders deserve something in recognition of the greater risk they have taken. Although the you quote 16.5p as an example price for raising equity, there is nothing to stop them going for a sp of 50p for example?
Clamp
Posts: 3,291
Off Topic
Opinion:No Opinion
Price:18.75
RE: 20p by May Day
Thu 20:58
keable

As pedantry seems to be a requirement for this bb, can I ask you whether you really meant 'if we get a mirror image of today's rise tomorrow it will be close enough to claim a wee victory'? Surely it depends on how you look at this?
Cheddars
Posts: 34
Observation
Opinion:Strong Buy
Price:18.75
View Thread (3)
RE: Broker Targets
Thu 19:03
As an experienced banker I can not believe that CF would agree to a Market Cap covanent as that is totally outside his control - SXX could be on target but caught up in a stock market crash.
Also, I don't see that the thin cap rules would apply - the more debt the better as I see it.
keable
Posts: 4
Off Topic
Opinion:Hold
Price:18.75
20p by May Day
Thu 18:57
Edging closer to my prediction.
Only a few trading hours left, if we get a mirror image of today's rise tomorrow it will be close enough to claim a wee victory.
Steady as she goes.
dinger189
Posts: 230
Off Topic
Opinion:No Opinion
Price:18.75
RE: Broker Targets
Thu 18:45
GK, In those famous words, The lesser of two weevils, certainly food for thought regarding all debt
kspine
Posts: 87
Off Topic
Opinion:No Opinion
Price:18.75
RE: Broker Targets
Thu 18:28
HI GK,
I've had the experience of a startup that was 'taken over' by debt holders when it hit trouble, leaving the common share holders with nothing.
So- excellent point.
GaiasKidney
Posts: 2,182
Off Topic
Opinion:No Opinion
Price:18.75
RE: Broker Targets
Thu 18:23
Hi Clamp.

"But if it's all debt - what do you reckon?"

.....Careful what you wish for.

Re your In-house brokers. Liberum don't disclose that much, however WHI gave a valuation estimate based on the project getting St1 finance and said they put in to that their figure for expected dilution. That figure can be worked out from the 18/4 press report ( http://www.iii.co.uk/articles/310340/sirius-minerals-given-new-price-target ).

That is if you accept that they used the pertaining price then of 16.5p as the price the new issue goes at and also using their estimate of a £12.2bn NPV (£8.6bn), so giving a stated target of 138p NPV per share, it comes out as a rather eye-watering 4bn new shares. But more interestingly they appear to be estimating £650m of the £1.1bn St1 requirement is to be raised from new equity. 60% E, 40% D.

But does that new issue go at 16.5p? The fact that this is rising from then and seems bent on still rising still further above that 16.5p suggests not. For a fixed amount to raise, each penny higher above 16.5 takes 225m shares off the volume of new issue. At 25p it 's not 4bn but 2.6bn. From that the NPV/share is not 138p but 176p. At 30p 2.17bn and 193p.

30p with a NPV/Sh of 5x ? That seems a bargain to me.

GK.

PS: that 'wishing for' (I hope you are not btw)......

If St1 were to be all debt - $1.7bn of debt - and Sirius got into difficulties, even not too onerous difficulties, during the build phase and the Mcap went below $1.7bn, would those creditors file and regardless of all the years of hard work, take it all away from the loyal and patient share holders? Would that be fair? Discuss. Would that be legal? You bet. FMU this debt finance deal is very likely to come from Wall st. luckily there is something legal on lending out there called Thin Capitalization Rules, best hope they apply.
HopefulDave
Posts: 25
Off Topic
Opinion:No Opinion
Price:18.75
RE: Broker Targets
Thu 18:20
Well we are currently valued at 18.75p and ~£430m.

38p = £870m
65p = £1.49bn

According to CF interview recently he was putting us at $10-15-20bn at production. At current exchange rate (0.69) $/

£3.00 a share = £6.9bn ($10bn)
£4.51 a share = £10.35bn ($15bn)
£6.13 a share = £13.8bn ($20bn)

So if my fag packet maths is correct the 38p-65p is still a large downside on production ready price which we would get closer to as the build continues.

I guess then the move towards those figures would occur over time and it would be a matter of appetite for risk during the build V potential growth.

A price of £1 would still leave a 200% upside at the lower end of the estimated valuation.

I'm not sure what risk % would be removed by the markets with complete funding sorted, but if the broker estimates are 38p-65p and include some dilution I'm guessing £1 wouldn't be out of the question with none?

Please forgive my calculations if out, I've just typed this on train home to pass the time!
throbber
Posts: 97
Off Topic
Opinion:No Opinion
Price:18.75
Re: Captain
Thu 18:12
That's very sad news Scottie , I had hoped for a miricle ,but let's hope that he is comfortable at this time and able to imbibe just a little bit.




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