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I'm no expert on potash production but i was a bit concerned with the details provided on the RNS on 24th May - see below.
Lower 20201 revenues due to lower evaporation rates and changes to the pond model?? I did wonder if they knew what they were doing. However, 2022 full production levels were re-iterated and the BOD did participate in the last round of funding, so this gave me some confidence.
Anyone got any ideas why production will be significantly lower??
Lake Way project update
The Lake Way Project is on schedule for first SOP production in June 2021 and first SOP sales very shortly thereafter. Commissioning is substantially progressed with 26 of the 34 Plant Process Units now commenced and 17 of those Process Units now finalised to Practical Completion. Overall plant commissioning is more than 50% complete. The target for full scale production of 245ktpa remains the June quarter of 2022.
Revenue expectation in 2021 has been reduced, driven by expected slower harvest salt ramp up due to a delay in receipt of EPA Part IV until late April following the recent state election, a lower evaporation rate incorporated into new dynamic pond model and a larger than expected impact from harvest salt production cells being taken offline during peak salt formation from December to February to prove harvesting methodology. Train 3 pond cells have been repurposed to reflect revised pond design. The reduced revenue expectation for 2021 was a key consideration in determining the additional funding required.
I think the next RNS will have to set out a clear strategy with full disclosure on reasons for the delays. Any institutional investor handing over fresh cash will insist on that and imo that information must be made public. If anything good comes from this sorry affair, it is that management will be very clear that this is the last chance saloon.
For these large mining projects, I'm actually quite a forgiving shareholder. I understand delays and setbacks come with the territory; which is why I take a 5 to 10 year view. I also understand that moving into production is one of the most critical steps in a project that has taken many years to complete. For this reason I have been tolerant of past delays.
However, my issue with the latest announcement is that it comes literally days after a succession of tweets on twitter to the effect of "all systems go", "pedal to the metal" or some such junk. I think these tweets are highly misleading and unethical.
Any thoughts from anyone on when normal trading will commence on ASX and AIM. ASX appears to suggest normal trading could start again tomorrow, Thursday 29 July 2021.
It is interesting comparing the recent RNS from ASX and AIM, with ASX being more informative than AIM.
Good luck to all those invested in SO4. I hope the next RNS is crystal clear about a strategy for a way forward that supports those invested in SO4.
Think it sees 10p soon.
Not a big position but nice profit so far. Will close at b/e if it rises.
Just my view which is not worth much as buying into all this shows I’m a poor investor on AIM. But yes I can see sub 10p easily enough. The current main lenders did not release the remaining loan until PI had been tapped. I can’t seem them having any enthusiasm for this other than (as I previously alluded to) they could lose the lot if the company goes under. At that point it would be worth whatever you can get in administration and that would go to the debtors, you can count on the shareholders getting nothing.
Still we aren’t quite in that position yet, let’s see what bedraggled rabbit might be pulled out of the well worn hat!
Unfortunately I definitely think sub 10p. I’m not sure I can see much demand either for a fund raise, the II’s have also been carpped on, unless it’s at a really massive discount.
Bought in at 19p, topped up again at 23p when the management participated in the placing and they were spouting BS about production being weeks away (this was many months ago)...how bad dyou chaps think this could get? We thinking sub 10p...if i'm being honest I feel like we've been lied to but thats what you get with AIM I guess. GLA
JD427, are you saying they not suspended trading (RNS1) and have not issued a follow up statement via (RNS2) of a material downgrade in production?
Just found this comment on ADVFN from 21/7 - if they set up for fast track production and lower levels are being produced maybe the equipment in it's current form is not fit for purpose.
Tony S's credentials as CEO are now shot. Noticed he's been very quiet on twitter for over a month now
Don't hold your breath on this one. The plan to fast-track production has failed. I'm guessing they now have a hungry mill that can't be fed with the lower level of salts being harvested than expected...this will subsequently place the balance sheet and cashflow under more pressure. They are not out of the woods yet...one of my worst investments. Ever.
I wonder what the management are going to announce and the timing of next RNS. I guess they will publish next RNS in out of trading hours, considering both trading markets. Whatever the problem is they must also propose a way forward, at least I hope they are still thinking in a positive way about their business. I am an investor in SO4, so I am very concerned with the suspension and hope for a speedy solution to SO4 problems whatever they may be.
I wonder if ‘substantial downgrade’ might even mean no production until towards the end of the time period stated as there is a major plant flaw that needs addressing, hence the spectre of a fund raise being mentioned. Guess we will find out soon enough, the suspension is obviously to give time to try to find some sucker to underwrite funding. The only glimmer of hope is the old saying that if you I’ve the bank 1000 pounds you have a problem. If you owe them 100million the bank has a problem. And boy do SO4 owe.
what a joke - first production was only weeks away and now this. Unbelievable.
Lootgaloot. Agreed. Zero credibility and it’s hard to see the so called ‘sophisticated investors’ wanting more exposure to this unless they are virtually giving the shares away. Hard to see where the appetite is going to be in fact.
May I just say though in all of this Milton.8rice your research via forums has shown to be pretty much spot on. Good on yer, I hope it saved you some money!
No intra trading RNS released. Ignore the above .
No intra trade RNS . So ignore the above post.
Fund raise will be at a huge discount as management have zero credibility now. Can't say the warning signs weren't there.
This is going to be very ugly. My fault and responsibility for my own stupidity. What a company.
Looks like the reason for the drop to mid teens is about to reveal itself.
Looks like the post above can now be ignored. Intraday RNS released which pretty much states the reality is far worse than we imagined. Significant downgrade in production for this year and a fund raise.
Oh ••••!
Due to no Telegram group that I aware of for this share, I do far more looking and a research for news on this share than on most of my other LTH’s.
The prevailing (if unconfirmed) conversations across social media and other forums is that whilst plant commissioning is complete, there “could” be an unforeseen technical issue holding up production. Best case this could further affect investor sentiment if/when RNS’d, worse case, if the delay is long enough, questions are being asked about the need for another raise.
Personally I don’t a raise happening but this is AIM and more recently SO4, so who knows.
Personally I think we are in a perfect storm of missed deadlines, poor investor confidence and a downward market overall. This being the case the sell off is still significant from the mid 25p we were at for so long.
Let’s see how this plays out.
I too have learnt much about AIM over many years and have 2 golden rules.
Rule one: Don’t but AIM listed stocks
Rule two: Refer to rule one
Yet here I am once more hoping a speculative gamble might pay off and make some money. I have to confess to getting a little nervous at the delay and it has to be said conflicting timescales given out by the CEO on Twitter over time. I’m even more concerned that at one point I thought that if in the seemingly (at that time) unlikely event the shares hit 15p I ought to sell up or buy more. So called averaging down on AIM is yet another mugs game in my humble opinion yet here I am thinking about it!.
Even the best performing AIM shares hover round the same price or drift lower for years. Most price rises happen over the course of only a few weeks. If you could time those short periods of rising share price you would be very rich. This is why patience is so important.
Another 4.8% fall today. Management has history with unexpected announcements and that doesn't help sentiment. This has been a bit of a disaster for me but production is always just around the corner.
(Got the answer for the reason for the SENX difference on the other board - essentially very small number of shares +/- different rules on WSE).