Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi Jim,
the company was targeting 2.5% market share:-
1.3M South East Asia - Partially Done (0,75M)
2.8M China - Partially Done (2.5M)
1.5M North America - Done (1.55M)
0.5M Latin America - Done (0.55M)
0.1M Africa - Done (0.35M)
so in the markets we've gotten a Torp we've got 5.7 out of 6.2 Mtpa, thats 92% of target for those markets.
Markets still being negotiated.
1.5M Brazil - No Deal Yet
0.8M India - No Deal Yet
1.8M Europe - No Deal Yet
0.9M Rest of World - No Deal Yet
Thats 5m, if we were to achieve 92% that would be another 4.6m Mtpa.
Very optomistic I know, but a torp for 50% of either Europe or Brazil would get us to 6.5m and a celebratory bottle of fizz for the sales team
I think the 23p was me... It was based on everything going right for a period of 10 to 15 years which seems a little optimistic. It's more a theoretical maximum based on the published data.
I think we'll hit the £1 in the next 3 or 4 years, but decent dividends will be about 5 years later. If we get to 10p then I'll be more than happy, 5p would be the minimum I'd be looking for in 2028.
Hi gemrusty,
The good news is that it has been shown to improve yields in crops like spuds.
There are currently reports on 9 potato field trials in 4 countries (UK, India, US and Brazil) on the Poly4 website, additionally ICL has 3 more field trials (UK and Netherlands).
Pretty sure more are coming.
He's probably growing something you can smoke if he thinks 4 tonnes of Poly4 = 1 tonne of MOP.
with regards to credibility and career - not really. If it turns out a success it will be in 5 years time, he'll have written numerous other articles some will be right, some will be wrong and we'll have forgotten all about him either way.
The Shard are recruiting, will forward them your CV.
Hi Tony,
Some info on Spreader Testing
Fertilizer is often applied to fields using mechanical
spreaders to ensure an even distribution of the required
nutrients. Ineffective spreading leads to uneven fertilizer
application, resulting in strips of nutrient-deficient crops
and a subsequent loss of farmer income.
POLY4 granules were tested using spreading
machinery set to spreading widths of 24m and 36m,
typical distances for fertilizer application. Uniformity of
application is expressed as the coefficient of variation
(CV). A CV of more than 20% generates stripes in the
crop. Subsequently, uneven spreading increases the
cost of crop production due to yield penalties and
required corrective actions.
A lower CV means a more even distribution of fertilizer.
The results of the POLY4 spreader testing were
within the 20% tolerance limits with, for example,
3mm granules showing a CV of 5.52%. POLY4’s
quality spread pattern reduces the risk of additional
expenditure.
Chilting
I tend to agree, I have read that its available as powder and chips, but when we sign a torp its for the granulated product and can't see why anybody would want chips or powder really.
Think there is a distinction between production of Poly4 and blends with Poly4.
Binder is needed for production of the granulated Poly4 which appears to be the flagship product and will be done onshore before shipping.
Blending of the product can be done anywhere but makes more sense to do as close to the application site as possible.
The granulated product (with binder) also produces less dust and is better for handling and blending than crushed Polyhalite
It's not clear exactly what Poly4 is (clearly Polyhalite). From reading the info from Sirius it appears that Poly4 is a group of Polyhalite products.
from the Poly4.com website
"POLY4 is the trademark name for polyhalite products from the Sirius Minerals Plc’s polyhalite project in North Yorkshire, UK."
elsewhere it says that it's available as powders, chips and granulations.
However it's clear that the Granulation (with binder) is the flagship product and is likely to be what has been used in the majority of trials, as many talk about the nutrient release profile which is a one of the key improvements when using with a binder.
Also with regards shelf life and moisture, the granulation process (with binder) is seen as a positive. Dust is reduced, dust + moisture = caking, which impacts shelf life.
https://poly4.com/site/assets/files/1065/poly4_v_crushed_rock.pdf
Also got the name of the product wrong...
I just googled mining PE's which were a little higher, but either way there is a long way to go with the share price and divis.
Sales volume seems to be slightly low...
verdeceleste - Whilst the price of MOP has decreased since 2012 the calculations are based off the current Torp price of approx 145 USD per tonne. The price is also on the rise in the last year I believe.
Also it's not a direct replacement for MOP/SOP, it's likely to be used in blends and it's low chloride content certainly puts it more in the premium SOP category.
As I mentioned that 5 GBP is after debt is fully paid down and we achieve 20mtpa in sales, but it is achievable at current commodity prices. (it was written on the back of a fag packet tho)
So reported production costs are 30 USD at 20mtpa, Torp price is averaging aboout 145 USD (we should achieve more later though) so thats 115 USD per tonne profit.
we have 20,000,000 tonnes per year, thats 2.3 billion USD profit.
Tax man takes 17% and we have Gina and royalties to pay so I've knocked off another 5% leaving us with 1.8 billion
5.7 billion shares in circulation so 0.32 USD per share divi (23p)
I've assumed PE in the 20's which leads to about a 5 GBP share price.
Before you get to that point, you need to be able to mine and sell 20 Mtpa and also have paid off a rather large debt in full. That's not going to be in the next 10 years.. But it does show the potential of the mine.
If we're selling 20 MTPA with debt paid off then the share price could be in the 5.00 - 5.50 GBP range with divs of up to 23p. That's a long time in the future though. That's based on no of shares, production cost, Torp price, Tax, Gina etc..
Share Price at 1st production I'd put at 1.00 to 1.50 GBP
I didn't even put my name down for Basic Economics 1.01, to busy chasing girls, or more realistically thinking of chasing girls whilst listening to Morrissey drone on.
Anyway clearly there is alot of detail that is missing but in rough terms we can probably make a few assumptions and not be a million miles out
I know I shouldn't, but it's simple enough.
So the question is how much do we need to sell per year to break even.
At 10MTPA production costs are 32 USD per tonne (not 100% but it's in that region)
So that is 320m USD production costs per year.
Average Torp price is in the region of 145 USD
So Break Even is 2.2MTPA
That assumes that the company is very reluctant to downsize the workforce, or switch things off when they're not in use. The reality of the break even is probably a lot lot less.
So I think the market will be looking at the mine and thinking wow that's a serious profit margin and we'll be past the break even point within a year or two. At that stage money starts flowing out of the mine rather than into it.
Would be interesting to see how the Torp volume ramps up year on year (but it's not going to happen is it). Are all the Torps 6 years or does that differ from Torp to Torp?
Sirius are targetting a 2.5% market share per region initially and they have achieved that already through the Torps in some and not even started in others. I see the 7mtpa as a figure that proves the concept, Sales are not going to go from 0 to 7million tonnes in a year and neither I imagine will production. The excess capacity may well be available to those regions which have no torp at ST2 (currently Brazil, Europe, India, ROW) or where the current Torps are non-exclusive.
In the May Investor Presentation there were 9 markets identified targeting a 2.5% Market Share in each (11Mtpa)
We've not yet tapped into 2 of the biggest markets in Europe and Brazil.
We've achieved the 2.5% share in a couple of markets already with the TORPs we have, there is still so much potential for Torps, the view of 7Mtpa being exceeded seems very achievable.
1.5M Brazil - No Deal Yet
0.8M India - No Deal Yet
1.8M Europe - No Deal Yet
0.9M Rest of World - No Deal Yet
1.3M South East Asia - Partially Done (0,75M)
2.8M China - Partially Done (2.5M)
1.5M North America - Done (1.55M)
0.5M Latin America - Done (0.55M)
0.1M Africa - Done (0.35M)