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For clarity, I did wonder whether the phrase "special economic area..." was hinting at the freeport rumours floating about recently,it was the only location mentioned , so might be a testbed for a post Bre"""t world?

Hi Cranleigh thank you for your contribution I am happy to address a response based on fact rather than hope and glad to see you recognise my generosity in giving of my valuable time and unequalled expertise(for the absence of doubt that was meant to be ironic!), but to deal with your well-made points in turn

The lenders will only be lending $1.5 bill(ie a little more than current MC ) on a commercial risk basis assuming that the IPA do underwrite the other $1.5 billion fully, though of course they will be actually lending for the period the cash is required and may get the capital refunded in extremis and after some delay but possibly not the opportunity cost of lending elsewhere , until (or if?) we see the details of the deal we will not know.
You are correct that the cash will only be drawn down as needed , but if plans proceed, that means SXX will have a liability of $3.5 bill BEFORE they earn any significant revenue.
Though you are quite probably correct that the SP will rise and possibly sharply once ST2 is finalised it is very unlikely to rise to such an extent that the debt;equity ratio falls below 2 which is still extraordinarily high (see my previous post )
I am not sure that any shareholders will be too pleased to note that the lenders (who sit at the top of the capital hierarchy) will get all of the mine and hence the shareholders nothing!!
The transfer of capital risk to contractors is never watertight .I questioned Ash . on this after the recent presentation and he accepted that much of the risk bearing was dependent on SXX analysis of the geology being accurate, if that is not the case then SXX willlikely incur some share of any additional cost.
There is still a further $400-600 to be found which I think strengthens my argument rather than yours.
The torps are worthless without a functioning mine and that is the worst case on which the lenders must plan.
None of that had slipped my memory (or indeed my notes on which I rely rather more) and none of it renders my concerns any less valid.

Two other points before I rest my case and leave the rest of the debate to others.
I am interested in SXX for similar reasons to others , the benefit to the region and its people, but that doesn't blind me to the risks and hence why I am not Currently invested , though I don't see that it renders me unentitled to contribute here - and finally I quote one line from the budget speech which might be tangentially relevant, it was the creation of " a new special economic area in South Tees......"??

Despite all the responses the fact remains that SXX are seeking to borrow >3 times the current market cap - that just doesn't happen often . Tesla, regarded as one of the highest risk investments around has a debt :equity ratio of 2.6 , Netflix (which I have just sold) has a ratio of 1.6 and they both have earnings forecasts which are stratospheric.
Scotman ,you are correct - I am far too polite to tell investors how stupid they are - but I do feel obliged to explain why they are taking on more risk than they know.I have said repeatedly the project success rests on extracting cash not poly.

how many of the folk here who have risked significant capital on the basis of an understanding(often extremely sound) of the company's mining, engineering and logistical task to get to production, BUT apparently no(or little) understanding/ concern for the financial aspects of the task.
OK so most of you know that SXX needs to raise $3.5billion (at present estimates) to get from here to production. You should all be aware that the company's market cap is around $1.3 billion and maybe even understand that the $1.3bill is made up of essentially the cash in hand and a notional value for the company's only assets viz, the rights to mine, some IPR, some Torp's (essentially worthless without the Poly) and the mineworks so far completed. For simplicity lets say SXX has $400 mill(I have checked but quarterly reports don't disclose and annual report is now well out of date) others will no doubt be more aware of likely cash figs.
Remember SXX lending target is $3.5billion or around 3 times the value of the assets, that's like getting a Mortgage for 3 times the value of the house you want to buy!
A brief read of any financial literature will tell you that (banks apart, for reasons I won't go into )a ratio <1 up to <2 is typical,beyond 2 is highly unusual a ratio of 3 is exceptional and especially when the assets being compared with are as yet unproven. It is little wonder that the ST2 financing is proving difficult, and is absolutely critical. I admire your bravery in committing so heavily but wouldn't join you .

HI Velo Your rant was amusing but ill-informed. The incoming CEO will have had extensive talks with the Chairman and other Directors and will have been apprised of the company's medium-term plans, which , in this case, clearly include holding on to Openreach. He (the CEO)would not have been offered the job unless he signed up to the broad strategy he was to inherit.
I posted here a while ago saying that the recent SP bounce was as a result of city rumours that Openreach might be spun-off and suggesting that what was left was a likely- to- fail venture in to sports broadcasting and a residue fixed line phone- based diminishing revenue stream.I still think that is a belief shared by many, including I suspect , the majority of the board.. The current SP fall is mainly as a recognition that the short -term bounce of a sale of Openreach and the likelihood of a special DIvi is now kicked in to the very long grass , unless the regulator decides to force the issue.
I sold out yesterday and hold no fear that i will regret it.

IFo when there is a market "correction" or even the threat of one, II's tend to start their reaction by selling their most high-risk or volatile stocks.HUR falls clearly into that category.

Causal Lehman brothers were an investment bank which "leveraged" itself stratospherically to invest in CDOs , essentially packaged mortgage debt to high risk customers. The company got to the stage where a low single figure decline in the value of its"book" was more than the entire value of the company.
If the story means anything it reinforces my views on how pension funds should ,,, MUST? act. If you look at the investments made by pension funds they are even more boring than mine - Large amounts of "gilts" ultra safe corporate debt,some" blue chip" equity . property or property backed loans etc etc. When pension funds go bust it is (almost) always as a result of illegal or morally questionable behaviour.

Pension funds have one prime responsibility , that is to ensure that their capital and the revenue it generates is sufficient to meet their liabilities.If it were YOUR pension fund I am pretty sure you would see that as reasonable, indeed, essential. In order to seek to guarantee that they meet those responsibilities they are overseen by Trustees, and the pensions regulator,Now it's true that they don't always get it right and we read in the press at length when it goes wrong.
In those circumstances Hammond's position is ludicrous, as "spreadsheet Phil" he appears to be proposing an increased risk strategy for pension funds, putting at risk pensioners funds when he is patently unwilling to risk taxpayers money in this area. I suspect this is merely another tinkering idea which deflects from an underwhelming budget , which will quietly be dropped within weeks.

Chilting The trades you highlight are Algo trades , but almost certainly NOT related to shorting. You are confusing HFT (high frequency trading)widely used to fill orders without impacting the SP, with shorting .
Depending on their degree of risk-tolerance the shorters may well continue to run their short unless and until the SP turns north , after all, at the moment they are well in profit and the SP is still falling.
There are many ways in which algo trades are used and the hedge funds who are shorting SXX undoubtedly use them . The hedgies I am most familiar with run 6 separate trading strategies and the guys responsible sit next to each other , BUT they are separate "Profit centres" and are to some degree, in competition with each other. If I get the time later today I will expand on this theme.

Not my thing, but it does look as though almost all of the 6 figure (in shares that is) trades are sells ,suggesting that the few institutional holders are bailing out. Again, I don't think that's "insider info." if it was they'd be gone long before now , rather it's "capitulation", regardless of how sound the business is, when the tide is going out..... as it seems to be in most world markets, very few stocks are exempt, and as I have done you sell your riskiest assets not your safest.

Sipp I think I know no more than anyone else where the SP is going! That said here are my thoughts.
I said a while ago that I was out on the basis that the balance was negative in the short term, and will stay that way until ST2 is resolved. I also said that I would consider buying below 20p or post an ST2 announcement, at the moment I am sitting on the sidelines, the extent of the fall has surprised me and that fact that SXX seems to fall relentlessly even on up days like today is a worry. I won't be buying yet, I have in the past caught falling knives and managed to get out ahead , this year both BT.A and TSCO have been successful for me but the downside of large caps is limited, SXX has no obvious backstop as it has only one asset and as others have pointed out it still has market cap of >£1 billI . I had a look at its neighbours in MC terms and they include Esure, Greggs, First group and Galliford try, all well-established names with lengthy histories and steady revenues, in MC terms it is in a relatively rarified atmosphere with only hope to support it..I still believe that almost all the SP action is down to PI's getting cold feet and not to "shorting". Recent discussion seemed to conclude that PI's might hold 70-80% of the equity - that's an awful lot of shares to be sold by nervous investors and there is the risk of a"herd mentality." setting in , if it hasn't already. There are many market sayings about when to buy and when to sell , the one I am adopting at the moment is "Never fight the market..."
I wish luck to those buying now and their comments about the mine being built etc,,are probably justified but the channel tunnel was built and is a great success, but I held shares there many moons ago and commercial success did not bring financial reward to investors . The eventual success of the project and the rewards to early, long-term and patient investors are sadly two different things.
I hope to join most of you as an investor at some point but it now certainly won't be until we have seen the details of ST2.
FWIW I am now of the opinion that almost any ST2 settlement however onerous will be better for the SP than the wait. To steal a phrase from elsewhere "Any deal is better than no deal"

GLA

That would appear to be the plan!!And TBH it has been the plan for some time.
If you read my recent posts you will see that I am not invested here because of my concerns that the plan won't all come together, but that doesn't stop me from speculating as to how they may make it work.
For reference, I am invested in Amazon, bought at $75 in 2007 ( debt:equity ratio still 160%)and netflix, bought at $10 dollars in 2011(debt :equity ratio still 180%)and they have both worked!
I have no doubt that SXX will be diluted by debt/equity or a combination, IMV the trick is to judge the position after dilution and decide whether the resultant capital;debt ratio can be sustained. If SXX plans work ,they will be able to fund their liabilities within (say ) three years from revenue and will be EBITDA positive by 2023/4 . They will then have proved to be a sound investment.

HI scotman, My assumption is that the current CB issue (original value $400 mill) ,be added to by a similar sum(say $500 mill) to create a total liability of CB's ~$900-$1 bill. with conversion prices of 24 and 30p - not improbable if the full ST2 funding is found.Anyone who wants to "cash in" the first tranche does so , if they don't they add. The net effect is to meet all ST2 costs , no immediate dilution , a range of conversion costs from 24-30p which if the project is robust are sure to be met. the point about CB's is that they are cheaper than conventional debt as they offer the holders the prospect of near-unlimited profits if all goes well. My musings were prompted by a piece in today's FT
(by a fellow Geordie!)discussing Netflix and Tesla borrowing and illustrating that companies with significant long- term potential can borrow more cheaply with CB's than "straight debt".The fact that bondholders didn't convert at 38p is positive , it implies that they see the likelihood of the SP exceeding that price within the bond timeframe as strong, so why wouldn't they take more of the same with a 30p conversion price?

One minor benefit of the recent SP weakness is that the attractiveness of convertible bonds to potential investors grows. Remember that an SP fall means that the conversion price (at lets say +25% from current) is easier to hit/exceed.
I think , in retrospect, that the (near - abortive) exercise in CB conversion in April may have been an attempt by the company to clear the way for a further CB issue as part of ST2. Notwithstanding that failure, it is possible that a roll-over of the CB issue by enlarging it to meet the $400-600 additional funding need based on the current much lower SP might find favour with existing (and new?) holders.
The current bondholders saw potential profit in a conversion price of 25% above the then SP of 20p ie 24p, here we are further down the road , with it is believed, much of the ST2 funding arranged and an SP of 24p, are they not likely to see the attractiveness of a conversion price of 24p+25% ie 30p?

Scotman Use your Sporran!!

Scotman I happen to know that you are part of an MI7 team checking out the Saudi embassy in Ankara , but I won't tell!

Scotman I happen to know that you are part of an MI7 team checking out the Saudi embassy in Ankara , but I won't tell!

Superleg. Make sure it's decaff . or you won't sleep at night!!

Hi Mikjjo despite my normal strategy of buy and hold "forever" and the old saw about "run your profits, cut your losses..." I have been selling off some of my winners . I think that here are real issues which might impact the markets this winter , USA: China,China's internal slowdown , the Saudi issue, a slowdown in the EU and all the political upheaval in Italy, Eastern europe .... But almost more important IMV is the perception in the market that recent good times are over and we are due a correction .In the modern market emotions are still important(nobody wants to be the last man off the sinking ship....) and algorithmic trading magnifies the oscillations in the market place. It is also true that I tend to react to soon ,but I have sold down some UK stocks I bought on the day after the Brexit vote , eg LGEN, PSN and LLOY and some of my more "High beta" positions eg BLT.
Harking back to my previous post I incline to sell and lose a profit rather than wait and face a loss.
I hope for the sake of all heavily invested that we don't have a "meltdown" but I will sleep easier with a higher percentage cash than for several years.
If I buy back at higher prices then so be it .

Ricfle way back on this thread you asked me why I had "sold out"here (at rather more length than you might have expected) is the answer!
I have been investing for many years and now live comfortably on the cash flow from my portfolio. To get to that stage I have had some short-term winners, some long-term losers and a lot of both good and bad experiences. All of that has driven me to an investing style which can be characterised as follows
Don' t lose large sums they take a long time to get back

Take profits when they are available (the only risk is to miss a greater profit) and that is psychologically easier to deal with than an outright loss.
Invest in "sure things"and hold them for decades, I have a portfolio of mainly fixed interest, blue chips long time slow and steady earners.

SO , I have become cautious, deeply analytical and pragmatic.
HUR is one of a subsidiary portfolio of "blue sky" ventures which might produce high returns but are inherently much more risky than my normal style. That portfolio exhibits much more volatility than my main one and when shares in it have had a good run and are in my view a bit "toppy" i tend to exit .
I have said on a couple of occasions that I felt HUR had done this and have twice exited at~60p , I retain my view that it will not exceed that figure until FOIL has flowed for some time and i expect that to be spring(late spring?) next year - that is FOIL +3 months say. I intend to buy back in at or before that time and don't mind if I pay 60p or more for a company with a producing field and hence much less risk.