Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I will say my dad never minced his words so poo wasn't the word he used ?????
I must say I'm getting a bit fed up with all these articles not putting sxx media portal to good use , why would you say " a hole in the ground in North Yorkshire " and then use a very old photo of the tunnel ?????
we are making unbelievable progress and they show a picture from months ago ???
Myo I have not sold a single share but you have got to admit getting the SP to increase is hard work.
Haha. I'm going to have to remember that one FFC
Naaaa sorry Myo but I'll with me dads old saying "life's like a poo sarny , the less dough you got the more poo you have to take"
Been out of the loop for 4 days, but ratings of B and B- from Fitch and Moodys is pretty damn impressive
Thanks chaps, hopefully that's one of the mystery conditions solved.
I thought the same regarding the TorP with ADM. I am sure CF mentioned it at some point in one of the Conference calls.
I'd read somewhere, most likely on this forum that there needed to be changes to the adm torp.
If memory serves, it was around a penalty clause for sirius not delivering the polyhiye on time (pro tip - don't use yodel)
Not sure if that is relevant (and without a source true)
mjkismgs
Pretty sure the second secured bond will be needed about 2nd quarter 2021 - based on figures in independent report attached to the May prospectus ( do your own sums?)
If the other conditions attached to the RCF are not technicalities we will probably find out in the RNS announcing the result of the bond issue.
Only a few more weeks:)
The SXX motto has always been "patience - then a lot more patience"
Verde
Thanks very much for the calm supportive response casapinos, and to others who have sought to engage with issues I raised in my last post rather than taking offence. Yes I am trying to take a balanced view.
My basic point was that selling $500m of Initial Bonds successfully is not sufficient to gain access to the RCF. That's a fact, not a matter of opinion. Three more conditions precedent have to be met first, as set out for example on pages 12-13 of the Prospectus. Condition (iv) ie. receiving the further $50m from Gina that you have referred to should be no problem provided the first three conditions have been met. My continuing concerns about RCF access are not to do with that $50m payment but with another aspect of the continued involvement of Gina's company, and also with the offtake agreements.
The relevant wording from the financial documents issued in May is as follows: ".. drawdowns under the RCF will be subject to conditions precedent, including....(ii).... amendments to clarify certain specific areas in some of the Offtake Agreements, (iii) entry into intercreditor arrangements, including an intercreditor agreement with Han****..." (see eg. pp 12-13 of the Prospectus). Now it may be that the Offtake amendments and the intercreditor arrangements required are little more than technicalities that will be readily sorted out, and naturally I hope that will prove to be the case. I don't know, maybe the substantive actions have already been agreed and Sirius just hasn't got around to finalising the documentation yet; or there is something in the recent flurry of new Stage 2 documents that addresses these concerns and that I have not picked up; or indeed, I may have missed relevant information already posted on this board. However, as things stand I find it hard to judge whether the conditions I have quoted above are something to worry about, or not. And of course I am not demanding that anyone else on this board should even share this concern, let alone address it.
Separately, I have been unable to estimate to my own satisfaction how far Sirius can get towards first production in 2022 (on the assumption that progress is as currently scheduled) before it is faced with having to refinance its initial drawings from the RCF. To set against that, I am very optimistic about the prospects for beating the planned schedule - as I said in an earlier post, I thought from the start of my investment in Sirius that construction was a much lesser risk than building the market for poly4 and raising sufficient finance, and so far (cross fingers) that's looking like a reasonable judgement.
Hi MJKI..... First may I offer a warm (if somewhat belated) welcome to the board to balance the ire directed your way by some. If, as I hope, you continue to offer your input , you will become aware that a balanced view is a not always welcomed by some here. There are though. others who will judge the content of your posts independent of your longevity or your failure to sing from the SXX hymn sheet.
Now to turn to the issues you raised.
I agree that there are concerns about the offtake agreements IRO their wide range, ramp up gradient and the economic strength of the counterparties (particularly those in China). I think SXX will be actively reviewing and hopefully reinforcing some of the arrangements promptly. For balance though , it should be noted that , at full sales run they represent a substantial portion of production , while leaving some for hoped for, higher sale prices.
The Gina issue is set out in RNS's of 25 Oct 2016 and 14 sep 2018 and boils down to a sum of $50 mill to be paid "once ST2 is settled"(I paraphrase slightly)and that the full sum of $250 mill is secured against the companies assets but this will be "subordinated" again as part of the ST2 settlement. Read the full RNs's if you want more detail.
As to where SXX stand IRO cash available I set out a simplistic view(based on the scant data available) in a post on 16 july at 17.09 which ,I suggest illustrates that SXX assets , at the moment at least , are adequate security for the bonds.
Accepting all that, I share your view that for the short/medium term and assuming a successful bond sale SXX is on more stable financial ground than for a long time and its prospects are sufficiently bright to merit investment.
All IMV only!!
mjkismgs... "That's notwithstanding the interest cost of the outstanding bonds and of RCF borrowing , which of course reduces the cash available for capital and operational expenditure."
https://www.fitchratings.com/site/pr/10083060
Both the USD500 million bond and the RCF will be senior and will rank pari passu with each other. There will be no amortisation of senior debt, apart from the planned cash sweep of the outstanding RCF balance once the project reaches completion...
...As the debt is non-amortising, Fitch also considered the PLCR at completion as an indication of the project's capacity to repay the debt, assuming a 25-year mine life. The PLCR under Fitch base case is 3.2x, which underscores the strong economics of the project after construction is completed.
(Note - Breakeven Status: We run breakeven scenarios to a PLCR of 1.0x at completion to test the project's capacity to pay off the outstanding debt. Polyhalite prices can be 46% lower than Fitch base case, while the maximum production rate can drop by 55%.)
Firm Placing and Placing and Open Offer - Prospectus (May 2019)
12.6.4 Stage 2 Debt - Commitment Letter {pg. 275}
The RCF is expected to include a cash sweep mechanism that will require a semi-annual sweep following completion of the Project of amounts standing to the credit of certain operating accounts, less a maintenance capital expenditure buffer and an expansion capital expenditure buffer sufficient to achieve production of 13 mtpa of product. Such amounts are to be applied in permanent prepayment and cancellation of the RCF.
i totally agree, looking forward when production and profits are doing very well, the company should consider share buy back to reward shareholders who are currently suffering.( a dose of nasty medicine now, great health later on!) people go on about dividends etc, share price is paramount. the company will not fail us.
In fact forget that as actually I'm on the 18th already
but I don't think it's quite: slam dunk, all future finance through to production secured, high five.
—-
Whilst you think it’s not slam dunk, I know it’s not slam dunk, high five.
mjkismgs there are still hundreds of hurdles to overcome but reducing our loan cost in the future is not as important as getting the xxxxxx money in the first place !!!!! Might I suggest you take a chill pill and enjoy the moment ???? personally I feel like Mr Lowery going down the 17th yesterday and am looking forward to the 18th which is imminent I feel ..
I suggest that some fellow posters are getting a little carried away in their enthusiasm for the news of the imminent HY bond issue. It is indeed very good news that this vital debt raise is in train, and that increases my personal optimism about Sirius - but I don't think it's quite: slam dunk, all future finance through to production secured, high five.
Stage 2 financing is only unlocked fully once four separate conditions precedent have been met, and only one of those four is the successful raising of $500m of Initial Bonds (as they are called, for a reason). So what about the other conditions? Nobody (that I have noticed) has commented on this board in response to my earlier query about the condition precedent which invokes changes that are required to existing offtake agreements. And it's also quite unclear to me what still has to be agreed with Gina Rinehart but the conditions precedent imply that there's something of significance outstanding in that respect.
And assuming that all the conditions precedent are met, in good time, what does that actually unlock, for certain, going forward? The number I would suggest is $1,790m, a figure that's exclusive of ongoing interest costs and which adds up: the net amount Sirius said it raised from its latest equity issue (ie. $405m); the net sum Sirius said it raised from the new convertible bonds (ie. $385m), to be released from escrow; the final $50m due from Han****, and a further sum of $950m which assumes that fees alone reduce the amount available to Sirius from a combination of the Initial Bonds sale plus the first $500m drawdown from the RCF, by a slightly outrageous $50m. Is that going to be enough to see the Company through to Q1 of 2022 on the planned schedule under which positive operational cashflows would then be achieved? That's notwithstanding the interest cost of the outstanding bonds and of RCF borrowing , which of course reduces the cash available for capital and operational expenditure.
Partly because of uncertainty about debt servicing costs, I do not feel confident that Sirius will not need to launch at least one further bond issue of $500m (and maybe two), in order to refinance its borrowing from the RCF, before we get to the stage where positive operational cashflows have kicked in. That's if the planned schedule is achieved. To my mind, the Company is now actively promoting the prospects of getting ahead of schedule because build progress will have a critical impact on the ease and cost of access to the RCF going forward, as per the Prospectus (p 37): "...the Company believes that its intended capital structure once the Stage 2 Financing is in place will provide the opportunity for reduced financing costs through refinancing and an improved credit profile over time, as the Project progresses..."
Which is not to say that I am pessimistic about the future of the Project, far from it, I'm just not so gung-ho as some!