Member Info for GaiasKidney

Ah yes. The trees have eyes.

I don't give much if any truck to the conspiracy theories of a connection between competitors of Sirius and the bashers on these forums. I've concluded long ago that in vast vast majority the bashers are just sad individuals who hold a grudge. They try and glean some pleasure from efforts to aggravate the present discomfort of those who stay with this. As those investors have - whilst fully appraised of the risks - a settled and reasoned expectation of the end game here.

Just sad. Not worthy of wasting intellect and precious time on.
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Question: is the present Mcap of this a deciding factor with the decision making of those who are considering taking these bonds? Or will it be the economics of this project that proves the magnitude of the future earnings figures, with that being qualified by the remaining risks to get there, noting that with bonds taken there will then be a full finance package in place?

Week starting 3rd Sept Fred. Two weeks max from now.

AIMO.

GK.

Morning.

Just to repeat the further options aisi if the present 'option 1':

1/ have another go at selling bond as is - we are financed.

is failing to go. Then there are many more ways ahead. In order of what to do first:

2/ sell in part, JPM take unsold and sell that balance later - we are financed
3/ modify the bond to make it more attractive (could be CBs, add warrants to bonds, a deal for some sort with a stakeholder so they take bonds) - we are financed
4/ find an alternative cash raise that JPM accepts and keeps the JPM deal on - we are financed
5/ come up with a different deal with JPM - full finance unknown
6/ dump JPM and find another way. - full finance unknown
7/ look for an all or in part buyer to finish the project - SHs will pay
8/ temporarily suspend deal with JPM and bridge funding gap until JPM deal is brought back on - SHs will pay
9/ halt build, walk away. SHs killed off. someone else...or no one builds this.

Obviously the first options are to be prioritised, the latter not so.

GK.

Hi Sim. Welcome.

Re your: "..more astute investor’s average price.." It would be flippant to say Citi did quite well there I think!

Seriously with 'astute' (I am just amateur) I don't think it's the price that is important when taking/building a position in this, but rather reducing your risk as you go along.

From 2011 on and the co's move to solely concentrate on this one project it has been an obvious given that there will be a very large amount of cash required to ever get this project to earning. Also an obvious given that at first and in the majority of the period of that development shareholders would have to be stumping up if they wanted to remain as owners in majority.

From that dilution after dilution was going to be the only recourse. Those who have not fully grasped that have been amazingly naive IMO. So here we are today.

This is now within very close grasp of finally moving away from the dilution dependency of up until now. Moving though that event will be transformational for this project and co when that happens.

So if they get this debt deal and any associated further needed dilution (to 'sweeten' this deal to force it to go) is minimal and then if you are prepared to stick this out until this project starts paying down the debt to safe levels, then I would think any price obtained below twice where this is now is a steal....But uncertainty remains.................and also now as a big dragger no lesser than in large part.....hatred of Sxx!!

I think a large part of present pricing is due to massive market mistrust of Sirius now after a year of disappointments -- or is that 'reality checking'? So even with success with this debt/RCF deal I'm not expecting rockets. 20p max until trust comes back. 1y+ before higher?

Welcome to the J curve!

ATB.

GK.

PS: BR holdings? http://investors.morningstar.com/ownership/shareholders-overview.html?t=SXX®ion=GBR&culture=en_

Hi.

If one looks at the chart from when CF became CEO to today you will see that for just 9% of that period - yes, just one day per eleven - this was over 30p. A figure when buying at that or higher would mean that today one would be 70% down we are told. So who are these supposed appalingly bad at timing investors in this that are now in such a position?

To me it must take some special skill to have got it so astonishingly wrong. After all a blind monkey (salt in eyes?) with darts and a calendar would have in nearly all attemps done far far better.

Pehaps greed for quick bucks when presented with a rising number for a week or so got the better of them? Or perhaps they deluded themselves that somehow a co with a very long and expensive route ahead to any form of earnings was just going to rocket then regardless because if had just gone up a bit before?

Yep, greedy people wanting it all now and never prepared to accept the reality and resposibility for their own decision making. Best sell there'll be no sympathy here.

Place mirror before one, view imige of self, listen to song:

https://www.youtube.com/watch?v=pTI_LeEVEsw

GK.

The 'cash' forward swaps that is, not CBs they have.

Wooden hill now. Sept soon. Feels Autumnal already.

GK.

Hi Fosters.

My thinking is simply that if Sirius had made a deal with Citi that involved the issue of new Sirius shares at future specified dates Sirius would have to disclose that price sensitive information to the market forthwith.

See if they RNS tomoz. However I have a settled view Citi are to settle these forward swaps through the market not via new issue.

ATB.

GK.

Evening WW

"SM seems to many new shares pre-sold to Citi at certain further dates... such fundraising would also introduce some dilution to existing shareholders. "

Not sure these forward swaps involve the issuing of any new shares bar what would come from the conversion of CBs they already hold. With the cash swaps it looks like they will just go and settle through the market when the time arrises. Or if it's not gone as they obviously think for Sirius and its build, close the swaps out again in the market....But that would cost them.

Re 'explanation'? My take: Citi like many other 'big hitters' who are now becoming interested in this project will in all common sense have made themselves 'Relevant Persons' and with that are bound imo to have far more gen on the SM/JPM plan/s to get this finananced and without interuption to the build, whatever the market may be diong.

Citi have risked ~£30m (though only actually spent £3m) and (as you say perhaps deliberately?) taken their position above 5% and so are now disclosing. A ploy? Maybe. However I don't think they would have bothered if they did not have a high degree of certainty that St2 debt (principally) financing happens and that with an either minimal or zero impact on the chance of further dilutive new issue.

PIs have provided this gift to Citi (and maybe in recent days to quite few others still in the shadows) by selling this down. It may be argued that Sirius created a very high risk, to the wire, make or break situation with St2. But they have a very prolific history of working that way again and again. So perhaps it should not have taken so long for some (perhaps more risk averse/less well researched) to let the stark warnings in the 1.5/19 prospectus to sink in.

Ah well. In the end I'm pretty sure those who have held, instead of lunching it, will be doing as well as the likes of Citi soon enough.

The majority priced in 'wipe out' risk pricing now looks to be vanishing to me. Wonder if the TA doomster crowd spotted this RNS coming in their water or some seaweed perhaps? No? ;-)))

Onward.

GK.

List as of a couple of weeks back. Tnx to who put this together:

Pelham Capital: 353.59m 5.06%
Jupier Asset Management: 327.72m 4.69%
Capital Research and Management 330.46m 4.72%
Qatar Holding 230.28m 3.30%
Norges Bank Investment Mgt 166.52m 2.38%
Legal & General Investment Mgt 109.44m 1.57%
Vanguard Group 154.53m 3.22%
Vanguard Capital 25.83m 0.54%
BlackRock 69.34m 1.02%
Alliance Trust 41.91m 0.87%
Aberdeen Asset Investment 23.05m 0.48%
Van Eck Assoc. Corp 18.14m 0.26%
State Street Global Advisor(UK) 14.90m 0.31%
Northern Trust Investment 20.48m 0.29%
Treachers Advisors 18.35m 0.26%
Royal London Asset Mgt 13.39m 0.20%
Aviva Life International 10.23m 0.15%
Kames Capital 9.04m 0.13%

Total of these top 18 2062m 29.45%
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The top 5:

Pelham Capital: 5.06%
Jupier Asset Management:4.69%
Capital Research and Management 4.72%
Qatar Holding 3.30%
Norges Bank Investment Mgt 2.38%

account for 20.15% of the share capital. Nine days on from the postponing of the bond issue there have been no TR1s showing that any of these large holders have changed their positions sufficient to trigger a disclosure.

In most part they aquired their holdings at around 15p - some £210m invested, so at present they are sitting on an ~40% loss. That loss could be far higher or indeed total if a debt financing solution is not found and executed before Sirius's cash reserves are gone.

These holding entities will be 'Relevant Persons' (as defined in the 19/7 note offering RNS), so it is to be expected they will have far more information and knowledge of the options Sirius and JPM have in hand so as to have a solution/solutions to get this first debt financing away if the present plan as stated does not complete.

With this extra contact and knowledge, as far as we know non of these IIs are selling. From that I conclude they are confident the present plan will work and that if not there are other solurtions that will......So am I.

AISI and FMU.

GK.

Hi Tibbs.

Welcome to old Harry's Hell.

Some background:
Sirius say they run out of money by end Sept,
Sirius have a deal with JPM where if they can sell a first $500m bond by end Oct that opens up a credit facility from JPM for more than $2.5bn covering all the mine build cost and some (according to the plan)
Sirius attempted to sell this bond last week then pulled it.

Result: Market upset bordering on hysterical.

Options now in order of what to do first:
1/ have another go at selling bond as is - we are financed
2/ sell in part, JPM take unsold and sell that balance later - we are financed
3/ modify the bond to make it more attractive. Attach warrants maybe - we are financed
4/ find an alternative cash raise that keeps the JPM deal on - we are financed
5/ come up with a different deal with JPM - full finance unknown
6/ dump JPM and find another way. - ditto
7/ look for an all or in part buyer to finish the project - SHs will pay
8/ halt build, walk away. SHs killed off.

Obviously thee first options are the best.

GK.

Hi SNN

"..the bond process is very far advanced, with buyers lined up. The company and JPM are not going to launch the issue unless they are confident it will succeed. This has been in planning a long time. "

Yes. This is why I think there is a back up option and one that does not mean a restructuring of the IB. A route that would be gone down before other things are entertained. Probably that JPM hold on to what they cannot pass on.

This would be to an extent an underwriting. Let's guess if they would want a fee for that!! ;-)

Re your 'a' & 'b'. A delay with the co having to suspend in part the construction re 'b' would cost far more than paying JPM its price. The worry is (only minor to me as it would not make a lot of sense in the big picture) JPM may be insistant that Sirius has to demonstrate their attractivness at this debs ball (or is pole dancing) by getting the cash to pile in.

Perhaps best not to watch!

GK.

Indeed Myo. Sirius's status.

But unfortunatly one cannot get away from the reality at present that this behaves (gets kicked around) pretty much like many an AIM stock does. Though as a Main co Sirius has far greater ability and opportunity to raise funds from a far more wide ranging area in the market than any AIM co could ever have..................If they could just do so eh?......................

Soon.

GK.

Tnx DGR.

Explains where that came from.

GK.

SNN

If you have seen "reissue" as a direct quote from the co do please ref it.

GK.

Hi.

"They have actually used the word 'reissue'. " Not spotted that in official statements my self. Suspend? Revisit?... Re your:

"My guess is that they got as far as 'issuing' the bonds to JPM, who are acting as an initial purchaser, who then sell on to the agreed buyers."

Indeed agree, they prob have. But I think that is just the legals and then a paper exercise by JPM. Release of funds would not only depend on JPM selling on sufficient of the IBs but would also be conditional on the co being in the position to have fulfilled on the criteria of the 'Stage Two Event'. So if that does not occur before the end date - 31/12/19 - as then the 'Stage 2 Debt Non-Occurrence Event' defaults in. With that FMU the 'issued' bond, being only paperwork, just gets binned.

See prospectus p29 etc.

Looks like rarely JPM will have to do proper work for its fees on this. I think it can be done.........Or JPM will take a higher prportion than they would normally wish to.........Meanwhile until it's done (as said) this Yorkshire mog, having been trampled by the herd is limping and being pursued by hounds........Very often cats defy the odds though, 6 1/2 lives left?

We'll see.............and Summer's b*****d off too!

GK.

Hi Spike.

After the last torrid year I expect it will take quite some time for the market to regain sufficient trust in Sirius for the sp to move anyway near the 'zero risk' pricing you are flagging.

Market applied risk discount to a 13mt/y project NPV/sh of 60 to 85% would be the range I would expect post St2 getting settled. Presently that figure is around 91% from my calcs/assumtions.

GK.

Fred. Fmu no. Its all in place to restart with no need to say they have...and maybe wise not to say. Just drop the RNS 'Initial Bond is fully taken. Build continues.'

GK.

Hi Robins

"Are JPM allowed to buy the shortfall if they decided they wanted to or are there rules against this?"

Allowed? Yes. Obliged? No.

The Initial Bond Engagement Letter spells out the deal between Sirius and JPM. Outlined in; 'Sirius Minerals plc Launch of Stage 2 Financing 30/04/2019', sec 2.3, with:

"the Company has agreed to engage J.P. Morgan Securities.. to act as initial purchaser of the Initial Bonds on a best efforts basis, ...In those circumstances, J.P. Morgan Securities would endeavour to procure purchasers for the full US$500 million of Initial Bonds currently contemplated as part of the Stage 2 Debt, but would not be under any obligation to acquire any Initial Bonds for which it cannot procure purchasers."

So not only are they 'allowed' but if it appears it is going to work but is not yet certain, regardless it looks like JPM will "act as initial purchaser". but obviosly at their discretion.

They are in control of what happens ahead. That's the deal.

GK.

Back to hols. Little point in watching for 3 weeks a semi dead cat being kicked down the road by estate kids that havn't got a football !

Rational thinking Foster? Soooo last season!!

Long hot summer soon to cool down. Cool heads will prevail.

GK.

Hi Lost

"This is all predicated on the alternative of the Initial Bond having failed"

SP then is? Answered by your self:

"..this may well lead to shareholder wipeout."

And you then expect this???

"utilising the one of company's biggest assets: it's huge and devoted shareholder base"

Devoted?

This I fear is where any logic this scheme may have had falls apart. I'm thinking all sense of realism is rapidly dissappearing from here.

Just don't anyone go writing to the - proven basher of Sirius - FT eh. Ooops..too late.

Priceless.

GK.

Morning JR/GD.

Sorry for tardy response, was off out for rest of day.

JR these charts show running av yield for those bonds followed in this index. With a fixed coupon for each bond changing yield indicates the price is moving the opposite way. Yield down/price up and vic-versa.

Lower rated bonds = higher risk, among other things. When the market is going 'risk off' - moving from risky assetts to safer (eg early last week) - these index yields at the high risk end will go up (selling = price down = yield up) whilst low risk bonds' yields (eg triple'A' rated, gov bonds etc) will reduce as buyers move to them and their prices go up.

I think the previous day's figure gets updated by YCharts around the US open.

GD the yield here:

https://ycharts.com/indicators/us_high_yield_ccc_effective_yield

with this triple 'C' index is nearer to what Sirius should get as a coupon, but this index covers sub investment grade bonds and a lower rating that Sirius expect to get. That the yield presently in this index is around the guidance for the Sirius Initial Bond shows that of late even 'CCC' has recently been bid high from Jan '19 to May and has been erratically sold of since but not hugely. I think these bonds that this index covers are non the less priced higher now than what they were issued at.

It can only be an indicator of what the market mood is like. There will be many other factors in play with getting this IB away. But get it away I expect they will.

ATB.

GK.