ShoreCap's Verdict30 Apr 2019 14:15
Sharecast News) - Sirius Minerals narrowed total losses in its last trading year as a result of a fair value re-measurement of derivatives associated with its convertible loans.
The company was aiming to raise $3.8bn via a mix of $400m of new equity, $644m of unsecured convertible bonds, $500m of senior debt and a $2.5bn revolving credit facility.
Company boss Chris Fraser said: "Today's announcement provides a clear pathway to a fully financed project in the months ahead, while enabling us to progress construction at full speed."
Be that as it may, the miner had priced the equity portion of the cash call at between just 15-18p per share.
Despite that and the ensuing share price reaction, Yuen Low at ShoreCap was effusive, telling clients: "The next few weeks represent THE crucial juncture for the company.
"Successfully securing the Stage 2 financing is effectively the key to unlocking Sirius's vast potential, and we expect should catalyse a major re-rating of the shares.
"Beyond that, while Sirius would still be some years from becoming cash generative, an investment in the company should become progressively de-risked and enjoy significant value uplift as it advances towards production, we believe."