Member Info for Cherokee101

Please note the following from the transcript of 27th September.

Edward Blair Liberum capital:
"Sure. And so, you would expect to be talking to the market by year end in relation to that finalised agreement?"

Thomas Staley
"So we expect to have those commitment letters in place by the end of the year. And yes we'll be talking to the market at that time".

Commitments are due by year end, but the sign off of stage 2 is due Q1 2019.

TS has said in black or white he will be talking to the market before year end. If he doesn't we have a right to get stressed and concerned. It's our children's inheritence at the end of the day, not a charity.

Odd that when people criticise the BoD, people say "Buffett, long term, shut your eyes".

That simply isn't investing. That is speculation. Real, thorough investing takes a lot of research, knowing what the BoD had for breakfast and assessing their every move. The fact that they have on multiple occasions failed to meet deadlines and then failed to really address it, is poor.

The investment proposition is amazing, 100 years of cash flow and dividends to fill your boots with. But it hinges on a pair of Ozzy dudes who have already once sold us out to Mother Oz herself. I suspect, we will be kneeling at her breast for the milk once more.

Please take heed of proper warnings, some of them exist. I believe in the project, but my trust in the BoD is waning. We need a clear sign before New Years.

Anecdotal - how much capital growth have you had on the FTSE over the past 20 years?

Zero.

Holding something for the long term with blind belief is not an investment strategy. Backing the right people normally is.

I think LL was implying they would like to keep the price low for MMs to get in cheaply... LL...?

Perhaps, but surely they would tell the market once all committments have been made. Not piecemeal? Whats the point? Having 1 committment in the bag is not really price sensitive. But by definition, even if they felt they had to announce 1 committment, then they can't hold back to manipulate the price and pressure it down for a back door entry. Any whiff of sh*te like that will get CF's head on a plate quicker than you can say Poly4.

Good news on stage 2 (strat partner for additional and good debt terms) will cause us to re rate into the 50s at least, possibly 60s. First poly is likely to be the £1 mark IF all goes well (so around 2022). In hopeful a 10 year price is close to todays NPV so approx £2.20. But execution is the ONLY thing that matters in the short term.

SL, I am a long term holder, but it doesn't stop me from kicking the tyres, hard. The BoD have been disappointing over the past 12 months in their handling of news flow and communication to the market. Being extremely positive in presentations and then dropping a bombshell was uncalled for. They should have kept us abreast of the risk, regardless of how low the porbability at one point. They have also experienced a few health and safety issues on site, which whilst a certainty, the BoD expressed surprise at the happening. Staley, also, comes across as amateurish on conference calls. He also said he would update the market on progress, no matter what, this side of Xmas. The clock is ticking on that promise. Other issues... the Euro ToP. I know Brexit is here... even Fraser's dog knew about Brexit 2 years ago. So why hype the market up? Just say the ToP is a while off yet, but progressing. Note also, the carnage of stage 1 and how Gina ripped us a new a55hole. However, on balance, the construction is ahead of schedule by the noises coming from workers, so first poly could be earlier. We have the ToPs we need and it is highly likely the 3bn debt is already sorted. The delay is probably the additional capital. Anyway, rant over.

Only one mainstream fund has it in the top 10 - Jupiter UK Growth. It is an extremely contrarian mandate, which, like all value focussed funds has suffered since 2015. I've said it a million times before, Funds will not usually invest in a non cash generative company. The manager would be thrown into the pit if the company didn't work out, no matter how good the odds. It carries too much career risk.

Alan, you have listed a genuine bunch of risks and concerns, that were rightly brought up by investors and speculators alike.

We should regularly test our thesis when the share price falls much more than the market, no harm in doing so.

I am not a speculator, I have been with SXX for almost 3 years. It is healthy to question the BoD and discuss their strategy with fellow investors.

I love your enthusiasm for this company, but at the end of the day, the stock market doesn't reward enthusiasm, it rewards progress.

No problem, you too - it makes a change from the mud slinging that goes on in here.

Yes indeed, the company has enough cash at the last calculation, but we needed Gina's much earlier than anticipated...

But back to the point about a takeover. Let's say a hostile entity takes over next week - they probably won't offer more than maybe 50p a share.

The brokers say £2.20 is the upside target, based on poly4 production at 20mtpa. With no further hiccups.

20mtpa is many years away from today (10 i think?).

There is no way a company would pay anywhere near that multiple, because we aren't profitable today.

Appychap, it depends how the deal is constructed.

If, for example, we run out of cash (i.e. the worst case scenario), what terms do you think the big boys will offer?

Let me tell you, the answer is not very attractive. By all accounts they would have our plums in their palms, and say something to the effect of "10p per share, or we look elsewhere" and rinse and repeat.

At some point, the majority of holders would want some pennies back and sell at distressed levels.

Now, if we believe we will get stage 2 sorted properly, then we are incredibly cheap on an EV and market cap to assets basis.

Personally, I think the outcome will be mixed. I have enough shares for my risk tolerence, and if there is 2 or 3x upside I will be very happy.

Conversely, if I lose, I don't lose the house.

Buffet's quote works well for cash generative, sound companies managed by amazing inndividuals.

But when you have zero cash generation, the entire investment thesis depends on a satisfactory stage 2 negotiation

Otherwise, some monster will walk in, scoop up the cheap chips and crack on with the build at our expense.

Ah well, win some lose some.

My guess is now on a leak unfortunately. I know this was done to death on a 2/3% move the other day, but seriously 6% on nothing? I'd hazard that the c500m additional is likely to be equity (which the markets had priced but the remaining skittish PIs had not). Like last time, the sheer number of parties involved means an equal number of opportunities to let the cat out of the bag. The construction guys sink ships on facebook whenever they hear anything internally. I will have a scan.....

A big entity clearly offloaded on friday, but if we suspect it is because of a leak, then the company well and truly would suspect it too (they would be highly sensitive to this given what happened last time). Given that there is no RNS this morning there is probably no material bad news to report on. Of course, this is wishful thinking, but hopefully sprinkled with some logic.

Instutional investors said the bull market was about to take off in 2007.

Institutional investors have been predicting a recession since 2011's Eurozone crisis.

Institutional investors said 2016 would see the end of China's growth and markers would plunge.

Institutional imvestors said oil would reach $200 a barrell when it was $100, but it went to $40.

Yes there are more risks today than there were then. But the underlying economies are OK, earnings have been good on average and many countries are just emerging from recessions (LATAM etc).

A broken clock is right twice a day.

Hi ChrisFrance.

Out of curiosity, do you own any SXX shares?

Chap who works on site commented on the facebook page that Bauer have now packed up.

I repeat, I believe, imo, that we are on track for early Poly4.

That's the only itch I cannot scratch at the moment. Not a whiff of director deals... of course you could argue not one of them has sold either.

It doesn't matter because you will still own the same % of the company. Same way it doesn't matter for dividends. You will still get your fair share of all future dividends. Let's say there were 5 billion shares in issue, and you had 5000 of them. You get a pound for every million pounds that SXX has spare out of its annual profits and can afford to distribute. Then, everybody's shares got picked up and re-split so that now every 11 shares have been consolidated into 9 new shares. The total shares in issue are 4,090,909,090, and you have 4090 of them . You still own the same share % of the company. If the company has a spare million to distribute as dividend next year, you'll still get a pound.

The good 1. We will have a strategic partner to take the additional cost burden 2. We will have a hybrid partner, consisting of both ADM and Hancock. Note that both entities already class us as their partner 3. We are 2/3 months ahead of construction schedule, if not more 4. 3bn debt funding to be finalised in January The bad 4. I think some of our ToPs will be "re jigged" due to quality, i.e. the Chinese ToPs. 5. I think the Euro ToP has problems attached (something doesn't smell right) The ugly 6. I think we may need additional funding in the next few years as we encounter physical/ other problems (never known an engineering project not to) Thoughts welcome.

The fact that you have sacrificed much to own this one share is boh commendable and bloody terrifying. I hope you have a contingency! And all the very best.