The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
... with 245Kt rapid output ramp-up... (per year)
Initial (optimistic) NPV8 was £250m (as per prospectus, with 245m rapid output ramp-up), let's adjust it for real risk in this sector and put higher interest premium lowering to more realistic valuation of £170m
now ramp-up postponed/delayed (lowering short-term output volumes) and increasing debt (incl. cost of this debt via higher interest rates, esp. living within covid realities and economic disturbance/instability it introduced)
effectively increasing the risk and depressing potential NPV valuation down to £110m
If financing plug is pulled-off then it's belly up, admin, hoping some shark would step in for TO at cheap.. (£60m max)
Realistically (some might think it is rather pessimistic) it's:
15% admin and probably 15% of value recovered on fire-sale (with secured creditors taking on most of a good stuff),
20% take-over for 50m-60m (nobody takes over for a fair value, there's always profit premium in mind, thus discount),
25% of expensive secured debt emergency financing with NPV down to <£90m,
25% equity raise (dilution) via share-printing - how much extra they need? 100m? (that's current m-cap),
10% all goes fine and valuation stays within £100m~£120m+,
5% reserved for miracle to happen
It's in the interest of funders and management with shares to get this running 'properly' and the sp higher again.
But the risk of some kind of 'default' has increased, or that profits will be servicing debts for a long time and further expansion difficult. ~7p, when most investors have averages >19p, is now the carrot to accept this situation. Or await more info and decide.
A market value reduced by 55%+ because of an unknown amount of further funding needed for a plant at its final stage to production.. the shares where trading higher then this level when this was at the start of build process now just before completion the shares are reduced significantly. Buying power was also strong over past couple of days, wouldn’t be surprised if the directors/insiders and topping up at these levels.
I'd rather they put up the cash to cover the emergency funding requirement. Correct their errors so that the investors don't get shafted with excessive cost/dilution that should never have happened.
The prospects are excellent it will probably drift lower and then shoot up once the directors have had a chance to buy on the cheap
No need to poke then mannnan.........!
really, is there.........! 'n if ya looking for a bargain............?
All the best (read the posts........... :)
Well. Now I see
Bunsenburner. Is here.
Chesh
I saw this yesterday. Dropped more than 50 percent. And it’s continued. Who ever in here. Nightmare for them
Have a read mannnan............!
or dyor.......... :)
All the best (still in that Indian oiler bud, dropping like a stone........ :()
Chesh. Was it excellent
Nope...........!
"Salt Lake Potash Limited (SO4 or the Company) is pleased to present its Quarterly"
All the best (pleased at >50% ...........! :(
The problem remains, Financing and by how many shares, to whom and by how much per share. Right now it's a gamble, but a good one albeit... for a small punt.
??????
Just out. Rerate back to double figures could be on
Agreed @1eyed.
I'm waiting to see what (if anything) they pull out of the hat. The hat may well prove to be empty, though.
Options:
1) Some sort of emergency funding cobbled together. It will be ugly and expensive and will likely impact profitability once production starts and will make funding for development of other lakes difficult.
2) Current II's get serious, put up a line of credit but with their own team in place to get things back on track. Where this will leave PI's is anyone's guess!
3) New CEO appointed and full review of operations/funding by the new man/team.
Don't get me wrong, this is a great project, great product with a good market ready to buy. This is simply a poorly managed operation falling at the very last hurdle. It can be rescued, but I have little confidence with the existing team being able to find something workable in the mythical magician's hat.
The latest update provides more confidence that the fundamentals are not are bad a some say and that S04 could still have a solid future.
https://www.investi.com.au/api/announcements/so4/907cde81-e47.pdf
Good luck to all long term holders, I believe this share is now oversold and happy to stick around.
Well as the intellectual G. Bush succinctly said during the prime lending crisis as the economy tanked ‘this sucker could go under’
Where on earth could you pitch a share issue?. With the current MC it wouldn’t raise a great deal anyway. Surely the funding has to take the form of a (probably unaffordable) punitive loan or loan to be repaid in stages with discounted shares with the sp dropping at each issue?. We will find out soon enough, perhaps I might buy a few (more) if the mc drops to 10m. I buy a lottery ticket after all.
Generally Good humour on this board considering though. It’s only money after all!.
I'm tempted to get in.... however recently all my investments in Australia have been negative, I attribute this to the political madness... So I will pass.... I'm starting to boycott some risky juridiction and prefere Africa and KP2 will have my preference for Potash
7p match
Bargain share price......potentially. Cowboy management.....certainly.
Up to you if you wanna get involved with these ******s. I've got a bit of skin in the game at around 20p, I won't be selling but invest with caution, things are not as they seem on the surface with these guys. Its all smoke and mirrors.
Absent any further news about this emergency funding round there will be little appetite for buyers.
Until we know the cost and quantum of this, along with a credible plan with updated forecasts, this will simply drift lower and lower.
A change in leadership plus a full financial and management review would help, but IMO rudderless ship for now (and not far off the rocks either!).
If your investment strategy is to actively seek out companies with poor management who deliberately mislead shareholders then you've come to the right place. You may want to consider that the clock is now ticking for SO4. They must secure finance before the end of the year. The would be lender has the whip hand, the longer they drag out negotiations the lower the share price drops and the greater share of equity they can grab for their funding. The share price could very well spiral downwards from here. At the very least I would wait to hear how much cash is needed.
I’m new here and only briefly researched this company, however the plant looks to be nearly completed albeit requires some further funding (unsure of amount) the company hasn’t advised this will be done with shareholder dilution, this could also still be done with repayable loans perhaps from Lombard Odier Asset Management or another existing share holder?The price of this share has remained constantly high even during the build process, to me the share is worth far more then 8p and the 50% drop was too dramatic especially now the plant is not just oj the drawing board stage but a almost completed project I presume the plant has over come some difficult stages to get to where it is today.8p bargain entry price?
Perhaps I had braced myself for worse but the actual problems encountered are nowhere hear as bad as I feared. Rather than any fundamental flaw in the infrastructure, it strikes me as an operational miscalculation regarding salt feed rate and requirement. The failure here is one of contingency and poor planning combined with borderline criminal communication to shareholders.
These issues, if encountered by a competent management, could have easily been planned for and funds raised well in advance at sensible market rates. The fact that the issues encountered are not wholly unexpected during a production ramp up makes this all the more sickening.
As I said, I was braced for some fundamental design flaw or a list of snagging issues as long as your arm. The fact that we are now over a barrel, having to accept lending terms way beyond what could have been secured in the previous fund raise (or the one before that; there's been so many) is a bitter pill to swallow.
In fact, I think I would have preferred to hear there was a major fire/explosion/design flaw; all these things can be fixed. Poor management, on the other hand, is less easily put right.