Member Info for GaiasKidney

Lost.

The reality is to provide any steer today on where an sp should be on a 'fair' basis such metrics are a bit useless. Particularly for Sirius as the risk discounts being applied by the market to these valuations are just so large. The payout is a long way off and remains uncertain on many levels.

However if I can match the future levered NPVs - those presented at around full production, then I add in debt impact - with a simple calc of what earnings post bills (inc debt service) should come out at. Then factor a typical PER . Then if they are not too far apart it will be that that is used to decide on value here now....Conclusion: with all the still remaining forward risks it's still very speculative but also the speculative nature is reducing whilst without the sp rising there is as well a growing value play developing.

AISI.

HAGW.

GK.

Lost.

Different inputs, different outputs.

$12.5bn is coming from the recent SRK stuff, but they use 8% WACC not 10:

"17.6.6 Economic Evaluation
Based on forecast cashflows from 1 January 2019, the 13 Mtpa option has a real terms, post-tax unlevered net present value (NPV) (8%) with a base date of 1 January 2019 of USD 11,889 M and an internal rate of return (IRR) of 25.1%.@

If that is to go up by some $14bn over 6/7 years then that NPV has already risen some $150m per month so far this year. hence approx $12.5bn now (actual 12.9) .........................not that the market is in any way interested in that or $9.8bn at present...........But in time?????????????

I'll whisper that I will be very content if this gets to Liberum's 3bn MC as a new level.

GK.

The trust thing D Cell

As said before I think it will need the loud stating that all the issues are resolved and the co has gone passed the St 2 Event.......and only then the market MAY think about forgiving Sirius.

GK.

Then again SRK are quoting 'unlevered net present value'. Cost of debt not included?

17.6.6
GK

Hi Lost.

All NPV calcs I've ever seen have had normal practice to included forward incomes and out goings. debt sevicing (int and cap repayment) being just one of quite a few out goings.

For the 13mt case NPV stands today at $12.5bn ish rising to some $26bn when that production comes in, 2026/7 - SRK and last Oct pressy.

You never know one day the market my take this on.

ATB.

GK.

Evening OP. Welcome.

"13.5% bad and too high"

When compared to the alternatives that would had to be gone through overwise?.............No. ~$70m/y.........One more bill!!

ATB. Don't get your self in to trouble.

GK.

Ah RHB God and Gods in God's Own?

You'll find that this umm...'puddle' of polyhalite is the the rersult...yes...of Gaia's kidney. Well, it's a hypothosis:

"The Mediterranean Sea as being Gaia's kidney is found (here) by Kenneth J. Hsue, a correspondence author in 2001. The "desiccation" of the Mediterranean is the evidence of a functioning kidney. Earlier "kidney functions" were performed during the "deposition of the Cretaceous (South Atlantic), Jurassic (Gulf of Mexico), Permo-Triassic (Europe), Devonian (Canada), Cambrian/Precambrian (Gondwana) saline giants."[25]"

The Permo-Triassic, ie the Zechstein Sea, just one of many 'puddles' over the aeons. The town of Perm Polish coast to the East some poly there. On it's Western fringe this huge occurrence of poly. Indeed THE world's largest...and most pure.

https://en.wikipedia.org/wiki/Gaia_hypothesis

God's own's day and this august Sirius's month. A first where this co raise money exclusive of the SH and gets it only on a promise.....of future earnings. Will the sulking market get this? watch this space!

GLA.

Gaia's Kidney.

Ok. I don't have to conclude the trees have eyes then.

Tnx

GK.

Ho ho....................machine error or was it????????????

GK.

Ha. My machine error.

A look on another device and full text comes up;

"Roadmap to financing
Setting out the roadmap for the financing, the analyst said the bond should be priced by August 6 with the deal closing three days later now that Fitch and Moodys have issued their respective credit ratings of B and B-."

GK.

Obscuring Milo
Do a search for: "August 2019 bond issue Sirius Minerals" and your first hit is:

"Sirius Minerals PLC - City broker reveals how and why debt deal could ...
https://www.proactiveinvestors.co.uk/.../sirius-minerals---city-broker-reveals-how-and...
Sirius Minerals PLC (LON:SXX) - “Expect shares to grind higher as bond nears completion,” ... 12:43 23 Jul 2019 ... However, he pointed out a successful bond issue allows Sirius to tap into a ... Setting out the roadmap for the financing, the analyst said the bond should be priced by August 6 with the deal closing three days ..."

Go to the article.........................no dates............but there were!! AIR

Curious.

GK.

Myo

Days like these let the rain do the growing for you. Get a deckchair and a cup of tea....and watch for a while.

When I saw 'Onions' I immediatly thought of the good(???) Doctor and his side kick Chaddo. If the washout at WS gets severe - SUDS and Attenuation Ponds get a testing too far - I can imagine them two rushing down to Sneaton Thorpe with their 2013 beaujolais nouveau glasses sampling the beck and jumping up and down and squawking 'look, look' at the slightest opacity!

GK.

One thing mine builders always have on hand are high power drain out pumps.

Looks like the heavy stuff is tracking to the South:

https://www.metoffice.gov.uk/public/weather/forecast/map/gcpvj0v07#?map=Rainfall&fcTime=1564531200&zoom=8&lon=-0.88&lat=54.16

GK.

Morning Myo

I noted - and was pleased by - the change in style for the new 2019 'Long-term Incentive Plan' (2019 AR p75). A move towards awards for delivering earnings, re:

"Vesting of the ordinary award is linked to a total of five million tonnes of polyhalite being shipped to customers by 31 December 2024 for maximum vesting of the ordinary award."

This 200% of salary (CF, 175% TS) scaling back to 40% if the above comes in later than end '25. IMO this award far more aligned with what SHs (PI + II) will want to see compared to the (though obviously important and definitly great PR value) First Poly awards of the previous year.

With 'FP' I see not only a PR milestone passed but also the taking out the most major project risk. That should be a whoppa of a sentiment boost. However AISI the perminant boost - Mcap moves to NPV region and then stays there - comes with those first m tonnes delivered.

Daily looks more probable......elastic tension cranks higher....window is closing!!

GK. Matophors mangled on request.

Evening --------- raining...more!!

A faster build has the obvious advantage of bringing debt repayment and eventual divi dates forward, but I think it would also provide some modest reduction in overall capex.

With the 'Alternative' 13mt/y case and SRK doing a sensitivity exercise for a 12m delay they say:

"17.7.3 Construction Delay
SRK has assessed the impact of allowing for delays during the construction period and reaching production capacity of 10 Mtpa. The scenario assumes that achieving a production rate of 13 Mtpa is delayed 12 months to 2027 and that an additional capital cost of USD 100 M would be incurred over this delay period to account for the additional owners and contractor related costs. The net effect of this scenario would be to reduce the NPV (8%) from USD 11,889 M to USD 10,767 M and reduce the IRR from 25.1% to 21.7% when compared with the Base Case Sirius FM."

From that you could extrapolate the other way for a six month reduction giving a capex saving of $50m. Of more impact though imo would be the NPV going to $12450 (basis 1/1/19) up 5% and IRR going to 26.8%.

Also with a faster build that would bring forward the ~$26bn 2027 NPV (13mt, 8%) by some 6m, so adding today an extra $10m to the some $150m per month present NPV project growth rate.

In time I expect those figures (an ever strengthening and stretching huge piece of 'elastic' attached to this build) to dominate market thinking..........with the proviso that the money is available to do it.

GK.

Ah yes the Efficient Market hypothosis. For speculative non earning shares has been demonstrated for many a decade to give little clue as to why a price is what it is and also to be utterly unreliable bordering on useless in providing any steer towards where future pricing will go.

Hands up who knows what does though?

GK.

Compleatly different scale re volume of material. .

For the TBM achieving a cut of say 15m per day that's approx 1000t. So the mucking out conveyor system is of a much lighter, smaller, slower spec. Whereas the ore conveyor will have a spec of over 50kt/d, very different animal.

GK.

placed for six months on from the Stage Two process start, ie around early Nov should do.....to have a comparison with all those cos that have been touted on here of late to slaughter Sirius. A quick six month performance table will say it all.

By then of course (and things going as presented) this co will have accessed a debt provision totaling a max of around some $4.65bn. That's four point six five billion dollars. What will that do to the sp I wonder?

GK.

Since rampy ramp is in vogue I shall copy over Amelia Aihead's - yes indeedee - post just, as it did raise a smile:

"Please give this a tick up if you think it'll be £10 in five years."

16 on the dream list of tickers so far, butttttttt..........you never know.............

Meawhile the Summer is nice.

GK.

P165:

"6.4.4 Ongoing Negotiations...
YPL is in advanced negotiations with a Middle Eastern purchaser to enter into an offtake
agreement for the supply and distribution of POLY4. The key terms as currently contemplated
include an initial term of the agreement for 7 years from the initial production date. Volume
commitments are currently expected to increase to 0.15 mtpa in the fourth year after the first
commercial production begins, with the volume commitment to increase to that amount over
the initial three years. The agreement also contains proposed provisions that allow the
purchaser, subject to certain conditions, to roll forward a proportion of the minimum quantities
between contract years. The aggregated volumes over the initial tenure would total 0.9 million
tonnes. The purchaser is expected to have the exclusive right to resell and distribute the
Company’s POLY4 product in Egypt, Lebanon, Iraq and Jordan. Pricing is currently expected
to be based on an individualised formula incorporating benchmark prices of competing
products and assumptions (subject to inflation) as to the costs of certain underlying nutrients
which POLY4 contains. The delivery method under the agreement would be on a CFR basis
from the destination port. The agreement contemplates a steering committee to be established
to assist both parties in working together to implement a marketing plan for sales of POLY4,
including liaising in relation to agronomic trials, monitoring timelines to production and
establishing various delivery mechanics."

GK.