Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I agree leyedman with everything you say in your post. It is looking very grisly & if I was an Aussie holder I would be spitting tacks with frustration.
At least I had the choice to hold, not my best decision and now down over 92%. Ouch!
If Australian market was open to SO4 investors they would have a choice about how they manage their shareholding buy, hold or sell.
It has crossed my mind that those holding SO4 on the ASX will justifiably be a bit nipped if this goes under without them having the chance to sell. At least we have been able to do so on AIM. As things stand it’s starting to look if I might have to re-examine my (at the time flippant) statement that I might consider buying at a market cap of 10million (sterling),
Is it any way possible that a rights issue could happen above the current AIM sp? Who knows?. I won’t be betting large on it though!. Administration followed by low ball takeover to pay off some of the creditors and nothing for share holders is looming large in my mind now.
Thank you for the range of comments re my post re doubling down, all of them fair, interesting and civil. So far it has proved to be a rash move! I am not going to sell... having held this long I would rather go down with the ship... but hopefully not!
Falcon - this might be a bit off topic but of interest to you going by your name.
Did you know that this part of WA was settled by Welsh immigrants c 1900? I visited a household 20km away from Wubin whose family had cleared land with horses before WW1 to grow wheat. 5th generation Aussies with Welsh surnames & biblical Christian names served up beetroot sandwiches and tea as though they had never gone out of fashion. They talked fondly about "back home" when their grandparents had not even been there. It had been a really harsh place to live over the generations from what they said because of the isolation and local knowledge needed to get by (I guess the same is relevant for the Salt Lakes project & what ever went wrong there).
yes, doesn't look good, what a risk.
The last extension was a short one, so might have implied that the were close to an agreement. But now yet another extension! Ouch.
This is heading rapidly to predatory takeover or receivers appointed. They've had enough time to negotiate a rescue package, but nothing yet.
Remember the new CEO's appointment is conditional on the ASX listing resuming, so this is still all the 'old' team's work.
Much machinery & salt beds have been set up, management was unreliable, we don't know what dilution is planned but at what point this is worth a punt. I wonder? The sun is still shining in Wubin.
Yes Tobin, yet another extension to suspending trading SO4 on Australian market.
If the management team of SO4 were confident of their plans and trusted all their investors to make their own decisions about investing in SO4, they would have both markets open for business.
If Australian PIs where keen they would be buying SO4 on their own market, at a price dictated by the market, higher or lower than the London market.
That's what happens when the CEO constanlty bleats about being fully funded, when in fact he should have been saying fully funded till the next raise.
So suspension pushed out further.
I still consider this a company with a great future but with such a low market cap I can not see how they can raise the cash they need by fundraising from PIs.
If Australian PIs where keen they would be buying on the AIM at these prices.
I suspect it may get bought out by a bigger player, or taken private.
There would have to be an offer, it looks like sirius minerals all over again.
Investors would want both markets open for a reasonable time before considering any Rights Issue offer price on offer. So really I would like the Australian market open ASAP, before I consider adding to my shareholding in any way. Because with only the London Market open the Australian market SO4 is in hibernation and we have no indication of the Australian sentiment of SO4.
Reasonable chance of RI is most likely below the Sp now, going of previous RI on the market. 10p is wishful thinking but I hope for PIs sake it is. But hold your breath on it!
Bit about the flotation tanks in this article.
'The potassium grades extracted and evaporated from Lake Way were lower than hoped and a floatation circuit within the processing plant also delivered underwhelming results.'
https://www.afr.com/companies/mining/salt-lake-potash-begs-for-one-last-chance-20211001-p58wfp
Interesting post DonJules and replies Ed & Leyedman. I’m sitting on a 90% loss and made a bad judgement in not selling once the bad news hit.
I take your point about the demand for potash. Too late for me to sell now, so I will hang on and see what happens. Not sure if I want to commit further funds, once bitten twice shy etc. Hopefully your strategy will come good and in a few months will prove to be a really good decision. GLA
@DonJules
I admire your positivity and do you know what?. I genuinely hope you make some decent money from your throw of the dice. Your comments about the strength of the potash market are not in dispute.
My personal (and hopefully incorrect) view is that funding is going to be extremely painful if it is forthcoming. There was very limited PI interest in the last round of funding, indeed the underwriters spent a long time off loading the shares they had to buy due too the lack of PI participation. And this was all long before the plant problems/production issues were in the mix. I guess it is possible that there might be buyers if the issue price is cheap enough but this of course is massive dilution for current holders. Interesting times or a bit of a mess depending on whether you are glass half full or half empty I guess. GL
Problem with this is making the decision about when you think the bottom has been hit. SO4 could go a lot lower maybe even halve again. So you could end up doubling down a number of times. Also many investors have a high average price.
I have doubled down... possibly throwing good money after bad but these are my thoughts. What if it is all fixable and simply a delay to sales, the market for potash is strong and the resource is huge. I don't think it is realistic to think that the company won't be able to raise the capital needed... it is just at what price. The rns mentioned a rights issue, which would be a fair way to refinance as one can pay up to avoid dilution of ones overall stake in the project. My average price is now under 8p, the last raise was at 20p... so I am thinking there is a reasonable chance the rights issue price will be above 10p, that's a 50% discount to the last raise. Crispen Odey still has a 10% stake and with other institutional investors may take a long term view and back the company to turn things around.
I don't disagree with the doom and gloom on here or the mess that the company is in but, at 3.5p a share, it might well be cheap enough.
I'm still quite curious about how much of the known problems have been admitted to. The flotation cells look like an important part of the extraction/separation process and clearly they aren't working properly. It seems almost implausible that the plant has not produced anything after all this time, I'm still wondering (as I posted before) whether product has been made with a load of impurities present and accordingly with low assay. Also the mention of a write off of inventory (feedstock) as having 'nil' value so not much chance of a chemistry solution likely here it would seem. Its still all about the funding I guess. As expected production has now moved until next March there are obviously some very serious problems here. A bit of a mess I'm afraid.
It's paper NAV, ok - they don't have intangibles/goodwill gibberish per se but "mine development" is hardly salvageable in reality on open-market.
I can even turn a blind eye on screaming red-flags with their liquidity (current assets vs current liabilities) because it was in a process of financing..
Just saying, it's very dangerous to reference NAV without knowing what's actually behind it.
Not saying it's total doom and gloom, still potentially viable business model despite tribulations but might be worth be cautious with expectations of financial value / NPV attributable to current capital and at right risk discount factor (these 8% NPV they calculated project valuation at is clearly not an appropriate measure).
Er no.
New plant. All new kit. Flotation cells being replaced before that have even been fully commissioned. Announced quietly in an unrelated RNS. All in the middle of an emergency fund raise with shares suspended on ASX for two months now!
No, not overthinking anything.
I think you might be overthinking it there mate
The sneaky little ....?
"The Company also announces that it has paid the first instalment for the purchase of Denver flotation cells ordered from Westpro to replace the existing flotation cells"
That was quietly hidden in the RNS... So how much are the new ones? How much was wasted on the old (only just installed) ones? Is there a refund due? If not, why not? How long for delivery / installation / testing??
There is so much not being said by OUR management.
Very poor.
Good point. Looks v cheap in fairness. NAV outstanding relative to mkt cap. Can’t see it failing personally
If we don’t get an extension RNS by the end of today I’d be expecting finance news next week. The fact they are placing as part of this makes the current SP a screaming by at 1/6th of the price before initial shortfall was announced