Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Given the Qatari’s have investment in the mine at stake, could they not simply be signing a supply agreement in the hope that it attracts other investors. I.e. Continue to demonstrate there is demand for the product. Rather than the implication that they themselves will provide additional investment.
Basically there is a long way to run on the funding, 5 months and 1 week according to the 17th Sept call. It’s clear there have been actions taken by the board as per the call to reduce outgoings and prioritise spend. Review of various different options for funding. Let’s hope it’s addressed much sooner and the speculation of an announcement by the end of the month holds true.
No doubt CF will also be in the office complaining about BB’s speculating on what’s next, but he knows one sure way to fix that and it isn’t another positive expectation RNS claiming ‘planned funding by debt’ or interview in the papers, we need confirmation of a deal done. I don’t necessarily think that the first deal or a quick deal would be the best deal, but equally as with every other financing stage running the clock down is not going to result in a good deal. IMHO, a deal in 2019 is needed, but a deal in October unless it makes good sense isn’t mandatory. Just hope something actually gets sorted this time and news doesn’t leak it to his buddies at Citi. I like every other LTH would appreciate a nod though to help recover losses from our support through the end initial phases.
GLA
Let’s get the Qataris to buy £400 m of polyhalite up front job done :-)
One thought that has crossed my mind in moving forward from where we are at present should funding not arrive in time is this.
Protection of the rights of the already agreed TORPS and current existing shareholders.
How can we as group of shareholders protect and take ownership of the TORP agreements (Yes we own them as of now but......in the event of being under the threat of 'Administration' and then a new owner walking off with those agreements for a song that card has then been removed, ie, can we take control of them in advance of such a scenario?)
Just thinking abstractly , maybe I am way off the mark here, and it is a totally non sensical thought, not sure, but shareholders need to have something, ie a bargaining chip, in order to be able to prevent some other company from taking those agreed TORP contracts away from us shareholders for next to nothing.
How do we ensure that from not happening?
At the end of the day, the 13.50m tons of already agreed Torps are worth a lot of money, and the ownwership of such in the scenario of a Admin situation might well be a powerful bargaining chip?
ups, missed one line: YORK POTASH INTERMEDIATE HOLDINGS PLC
Yep, it would be quite easy, SM is already parent company for at least 10 other Ltd's only on a surface (another level of searches via directors or accounts I guess would reveal much more):
SIRIUS MINERALS PLC
SIRIUS MINERALS FINANCE LIMITED
SIRIUS MINERALS FOUNDATION LIMITED
SIRIUS MINERALS HOLDINGS LIMITED
SACH 1 LTD
SACH 2 LTD
YORK POTASH HOLDINGS LIMITED
YORK POTASH PROCESSING & PORTS LIMITED
YORK POTASH LTD
YPF LIMITED
SIRIUS RESOURCES LIMITED
SIRIUS EXPLORATION LIMITED
SIRIUS POTASH LIMITED
So generally - yes, allocating some rights/assets to another entity and selling it is quite simple technicality.
Myo, best case for LTH's I'm hoping for is a package with equity-type raise (strat investor) for the higher-risk requirements esp. shaft sink and the rest debt.
Hopefully well find out before we're out of EU...
Jack1988 - yeah, was sleep-typing..
Yuri, 80p would be a cool 22 bag from here pal ;-)
The business case in my eyes is very compelling, hopefully too compelling for just 1 interested party, that’s what will be the SH value saviour in my opinion.
SM NPV estimates are starting from £5.5B up to £12B (even considering royalties/expensive finance costs)
with 7B shares at present it's SP 80p~£1.7 (so ~6 bagger min)
but obviously situation suggests dilution is eminent
so if we're up to 14B shares (50%) then current SP target is around 40p~85p
for 35B shares (our fraction goes down to 20%) current SP valuation is 16p~34p
Taking into account different outcome probabilities/PDF E[SP] realistic estimate I would say is approx 25p
Myosotis - NPV of this royalty (5% on first 13, then 1%) is at least £650M+ at 11%, so quite a bargain assuming they reasonably derisk.
See KOH, it wasn't that difficult was it, doesn't it feel better to concentrate on what may very well go right this year as opposed to always being full of negativity.
The sp was 14.60 just before the bonds were pulled for the first time, of course the uncertainty of finance has brought the price down put presuming finance is raised even in an incremental fashion and not too damaging to current holders coupled with the fact the the construction of the mine is ahead of schedule, everything put together could bring an sp of 15-20p + this year in my opinion.
Moving on with funding in place SM must be worth £1000m market cap or around 15p per share - about what it was on the 1st August.
Selling equity means sharing so if 50% of the equity is sold that would bring the existing shareholders share of the market cap to £500m or 7.5p per share.
If SM raise funding without giving away equity then the SP would probably be back to 15p in no time.
Then it is just a case of how fast the market cap grows.
JonesRichard
Ok, you convinced me. I'm feeling super positive at this point too, the news and we are due funding news one day within the next 14 trading days which will more than likely send the sp back into the teens and it just a matter of a couple of months or so for 20p+ buyers to be in profit again (450% increase for the current buyers). I will hold you to your word.
For now and since the world is so great and our future rosy - let's party!!! Heeey! Heeey! Heeeeeey! The next round's on me!
KOH
Scotman I think motor racing is a waste of valuable resources and never drive over 70 MPH - though I have to confess that 30 years ago I was done for doing 33 MPH in a 30 zone ! Bitter? you bet I am!!
Scenario prediction.
-Partner identification process underway provides appropriate funding package from ‘expanding’ Asian ,Mid East supporter. Giveaway 30-40%.
-redefined package produced with with-5% spend. Acceleration of key areas as already sought.
- Post Brexit new elected gov. support provided.
- market increase from new ‘partner’ opportunitys
-result?
- share
-
KOH, we get it, you don't have faith in this project rewarding LTH's, I disagree that 20p + holders will be waiting years to be in profit, in fact I think at some point this year they will be.
There, some positiveness to counter your constant negativity, it was a great news day for LTH's on Friday and the press since has been generally very positive on the back of the news and we are due funding news one day within the next 14 trading days which will more than likely send the sp back into the teens or down from where we currently are, I'm feeling super positive at this point, fair enough if you want to continue to post negatively, I thought you were waiting for a little spike to sell the rest of your holding? surely you won't be holding for too much longer as doom and gloom news is on it's way so the remaining shares you hold will be worth much less then won't they? we have had a rise of 25 % recently so wouldn't that have been the time for you to get out with something?
Cherokee
I'm not sure. It could mean nothing. And even if, it doesn't necessarily mean a good news for existing shareholders. Even taking the positive approach and excluding the "no deal" scenario for now and whatever the solution will turn out to be, it will likely be highly damaging to the current LTHs. We just don't know the scale of damage yet. That's the reality, we will get hit again. I'd consider amazing any deal where the current holders with averages at 20p+ would have an opportunity to breakeven one day (e.g. in a few years time providing they keep holding) considering the circumstances.
KOH
“Casa used to work in IT not finance.”
—
Don’t go upsetting the fella LITC.
He went to the F1 at Silverstone and now thinks he’s Lewis Hamilton!
KOH
You are stating the obvious here. The share price has fallen 90% this year, which means the market is getting ready to hammer the final nail in the coffin.
The company needs someone with deep pockets and vested interest in feeding their population... y know, should you be fighting desertification and depleting oil reserves...
Any ideas?
"It is impossible for rational investors to assume that SXX CURRENT financial position can support a debt anywhere near what is required."
___
Of course, I wrote about it some time ago. Some here just choose constant airing about the estimated potential future value of the resources trapped under the North York Moors National Park and from there drawing conclusions that the company is "massively undervalued" which shows a complete lack of understanding of basic laws governing this type of projects. They may have permissions to mine billions worth of resources. They may even know about hidden vein of gold there. But in order to get there and start mining process they need billions too. They need infrastructure and billions of dollars they unfortunately don't have. I've seen fully operational companies making profits and going bust in the same time simply because of liquidity issues. It happens all the time. Let alone some high risk "prospects" with questionable future market and non existing revenue. A TORP or two doesn't make any difference here. And It cost nothing to commit to a future discounted purchase too. It doesn't change the fact that they still need billions to complete the mine and start production. And they need it fast. At the moment the company probably has less than a 100mil cash sitting on the balance sheet, reduced human resources and no revenue whatsoever to support operations. Time's running out. Do you really think the current SP doesn't reflect the value of the business? I don't.
KOH
If I'm not mistaken another side of debt financing in our case - it's convertible (t&c apply),
so from this perspectives it might matter a lot if sp plunges below (converted value).
Although taking out of the current market 100m shares (for only £3.5m) will change situation drastically
(but obviously will very likely to trigger high volume of exodus/profit-fixing because of very low shareholders concentration ratio),
double of this amount - would send a very different signal (and sp/cap response)
But it's sort of the game of allocation alternatives - invest in debt for 17% or in ownership for 25-50%.
Hybrid/Mixed model very likely yields highest result, the only problem is: there are other beneficiaries who will get more from this.
Sorry Lost but your view is at odds with that of all the investing community save for the army of PI's many of whom read or post here . The evidence I call in support of my view is the trajectory of the SP in the last twelve months.I think I get it well enough.
Gotta go I'm cooking .
Casa, sorry but your argument re: the company's current financial position (versus what it was before the big sell-off) is wide of the mark. Whether debt investors do or do not choose to invest has nothing to do with the drop in sp. In fact of course the reverse is of course true - lack of take-up of debt investment has knocked equity investors' confidence and caused the sell-off.
Debt investors are interested in the realisable value of the assets, and the robustness of the company's projections for operating cashflow. I repeat, nothing to do with panicked investors selling their shares. You either get this or you don't, I won't bother to explain further.
HAGW
Casapinos.
What about the value of 13.8 m.t.p.a . At $150. That's over $ 2 billion a year. I dont think I've ever read anything positive you have say about sirious. If j.p.m. had allowed sirius to pay 13.5 % interest the finance would be sorted.
So how can you say the project is nowhere near.
Lost.... you are technically correct, but in truth the book value is now irrelevant , at the last half year report the Assets were (allegedly ) £1.6 billion of which £900 mill were PPE[how much of the kit on-site do SXX actually own? and what are the assets which are allegedly worth almost a billion pounds?, it is clear that the market has a fundamentally different view of what the company is worth.] and £350 mill was cash, the cash will be all gone soon, the £320 mill of escrowed cash for CB's has been returned and the PPE are now clearly valued at much less than they were then. I therefore based my post on figures which which reflect the REAL situation, not what the last accounts show, and that they are not too far from the assumptions being made by prospective lenders, and the ratios I set out are the reason why the SP is in low single digits. It is impossible for rational investors to assume that SXX CURRENT financial position can support a debt anywhere near what is required.
Re: ... People on site are confident that the mine will proceed. ...
TCG?
Re: ... will know that a debt : equity ratio of above 2 is a danger sign, 10 is unheard of ...
TCG? (Negative equity)
btw: SXX has a whole ecosystem of subsidiary companies with D/E > 10
Another note: these D/E reference ratios (by industry) are for trading companies!! So bringing these targets is pointless atm.
And finally SM eq is around £650M (not a capitalization), and current debt isn't that high
I'm not an expert on accounting and ratios - but not sure revolving debt facility falls within definition of "debt" in D/E context, it is a credit - yes (for banks we might put all deposits into "debt" category if follow such method - then it would be 10+ easily)
Re: ...The market cap will sort itself out - probably around the £1000m mark...
Of course it will, the only questions are:
(a) when? - £1B in 10yrs
(b) for how many shares? - it's very unlikely to be 7B, if for 14B (or higher dilution) then it's a different story.