Member Info for GaiasKidney

Yes, the power station - and so shipping in of LNG for it - is temporary and for the construction period only. He does not seem to get that. The building will be knocked down.

MTS to include 55kv interconnecter to supply all electrical power needs during production.

GK. Energy density figures? GIGO!

Tnx Paaa

It explains that event which I had well forgot!

GK.

Hmm.. Don't know where Feb '17 comes from. He became SXX CFO in Dec '14. RNS 14/12/14.

GK.

Evening Myo

Quite a few subtle but not insignificant changes to the project timings and cashflow have spilled out from the modifying and firming up of the feasibility modeling of Sept.

Annual cashflow out now peaking at ~$1bn in Dec '20, prev peak ~$820m May '21.

Debt availability period now ending Nov '23, prev Dec '24.

Amortization period now ending Dec '33, prev Dec '34.

Positive cashflow now first reaches $800m/y Dec '23, prev Jun '25*. At amortization period end cashflow now ~$850m/y, prev ~$800m/y.

As DT says service $3bn payout in total over first 5y, prev $2.8bn.

All in interest rate now stated at 6-7%.

Bit faster, bit bigger..........and of course a bit more cost up front.

*However both pres slide notes state '10mtpa run rate achieved mid-2024'.

GK. Might see if I can find a bit more cash tomoz.

"..an equity-based solution to providing the remaining funding is far better in the long term than any of the other schemes.."

Not for any present holder. Simple calc supports this.

For someone wanting 'in' on the cheap?? Then........

GK

Lost I concur with your chronology.

Re the IPA I am thinking more and more that this is doable without it. The bond coupons maybe higher but part offsetting that will be no gov bill for the pleasure. $1 to 200m max extra on the bond bill with no IPA.

Have a good xmas.

GK.

I do hope people have been taking advantage of the astonishing discount of late and not let themselves be subject to the 'market knows something I don't' drivell.

Off to market!

https://www.nationalgeographic.com/foodfeatures/land-grab/images/pair_2048.jpg

GK.

From rough calcs the best type of deal I can imagine from the view of present holders would be a discounted limited period forward sales agreement in return for up front cash today. There is already the potential for the modification of an existing deal there. Particularly as the co now have more TorP (pending finalisation with Cibra) than is required by the senior lenders.

GK.

Morning.

Who knows what the co will exchange for the none vanilla debt proportion of stage 2, but I hope all grasp issuing to get that is by far the most expensive way to secure that needed cash from the standpoint of existing holders and the impact on their future returns and yield per share.

Richard Knight of Liberum did a calc on the equivalent issue price that would have had to pertained to give an equal impact on then present holders the the (much criticized) royalty geal inflicted. An interesting number:

"Liberum analyst Richard Knights has described the Hancock deal as a “clear endorsement” of the Yorkshire project....

He also highlights that the arrangement is significantly less dilutive than a straight equity raise.

“Looking at the deal from an existing equity holder's perspective, the same level of equity dilution could only be achieved if that money was raised at 95p, almost three times the current share price,” Knights said in a note."

https://www.proactiveinvestors.co.uk/companies/news/167916/sirius-minerals-new-deal-values-yorkshire-mine-at-us39bn-broker-167916.html

Though not easily calculable, more involvement from present partners may also ease the lending criteria and so maybe reduce costs there.

If more from partners comes in I would prefer that from existing rather than from any new partner/s.

GK.

" their misjudgement is our opportunity."

Quite John.

Assessment criteria: the co, the project, the quality of the people involved, not (sheeple like following of) the market.

Doom and gloom all around. Exhausted capitulation cannot be far off.

GLA.

GK.

Good, Not senile yet then!

Commitment letters. Nov pres p3

"Next Steps

Q4 ‘18
Contingency assessment
Revise financing plan
Obtain initial bank
commitment letters

Q1 ‘19
Obtain remaining bank
commitment letters
Financial close"

From that we have today a net positive RNS with no new negatives, yet sp down...a bit.

'Sulking' conclusion maintained by me. It'll change.

GK.

"The Company believes that a US$3bn senior debt financing is the appropriate level of debt and will not seek to increase this amount."

An RNS quote from....................? 6/9

Today:

"The Company believes that a US$3bn senior debt financing is the appropriate level of debt and will not seek to increase this amount."

Now it's been a long weekend and it's still early for me, but..................But they do look the same.

I think slippage of the date of final receipt of all commitment letters as being scheduled as Jan '19 has been previously mentioned? Not new? Target for final closure remains as Q1 '19. We'll see.

An RNS showing steady progress, a market that continues to sulk.............It will until they see the money.

"..dilution is only possible on a further 400-600m at this point. Then that is literally it, "

I do so wish that could be guaranteed to be true Cherokee.........but until those sinkers have done their sinking all the way.........................

That one for the future.

ATB.

GK.

Ha. Myo. Scepticism [genuine or fake?] in many quarters! F**** 'em. Pardon me ;-))

If the Euro TorP is of a similar form to the Cibra deal then Sirius can capture in part the upside potential of 'base case' pricing, however it has cost the co some to secure that....And obviously, if in time, it will go into the pot with the others re MLAs.

Cibra RNS:

"...Sirius has also agreed to acquire through one of its wholly owned subsidiaries a 30 per cent equity interest in each of the Cibra Group Companies for a total of 95 million fully paid ordinary shares of Sirius."

"The Cibra offtake agreement takes us beyond our targeted 7 Mtpa and is a major step forward as we look to complete Stage 2 financing and building our global fertilizer business."

That's why I see further TorP now - and if just arranged to (over?) satisfy lenders as maybe over insurance. Tricky balance....but the wrap on this (St2) is very fixed and now near.

GK. Do expect the Euro one to happen though.

Hi Myo

'bolster'?

Yes, extra insurance, but there is a balance. TorP is now significantly over the MLAs criteria. The balance against 'no harm' from more is that the co are convinced open market 'spot' pricing ahead and once in production will be markedly higher for Poly4 than what they are having to agree to to gain TorP deals today. 'Contract case' vs 'Base case', re slide 8 and 18 in the pres.

You can be over insured.

ATB.

GK.

Yes SXXPP, I've had a little 'IPA' red flag against the St2 model ever since Scimmy said 'essential'. Made me think: 'well, is it?'

Assume the IPA could cover $1.5bn (co says other $1.5bn of the $3bn max senior debt is coming from the MLAs).
Assume IPA cover will allow bonds to have coupons at 3% below market for this scheme (this is a guess only).
Assume bonds run for 5 years to 12/23 (a familiar date and co should then be able to restructure all debt anyhow).

3% over 5 years on $1.5bn = $225m.

It should be somewhat less as well as the bonds will get issued in stages as the cash is required.

So would an extra ~$200m going in to future costs be doable? Yes imo, a bit more pain for those future divis, but doable.

Putting 'essential' in the public domain wrt Gov had to raise a 'really?' eyebrow.

We'll see by how much......But only on the big St2 day I expect!

ATB.

GK.

"The mining of the product could also be an issue, as it is substantially harder and heavier than potash. CPL are far from a good company and have made many mistakes which have lead them being into the position they are in..... They have however been doing this for 40+ years and they are struggling to get ore out the ground. to the tune of 1 million tonnes a year. It will be interesting to see their stats come June 19 once they have been mining poly continuously for a year."

If you are still looking in ExP......

Sirius a very much aware of the difficulties CPL have encountered extracting polyhalite ore. They have also secured much firsthand data and experience arising from the efforts at the Boulby pit from Joy Global (CPL are using their long held - and designed to work sylvite and halite - Joy continuous miners on the poly). Joy are now part of Komatsu, Sirius have had a relationship with Joy for some 5-6 years now and they will be providing the continuous miners at WS.

The unique characteristics of the WS poly ore body don't just make it amenable to large volume continuous mining - with the right kit! - but also the ore layer thicknesses (~25m up to ~70m) will allow for drill and blast to be used economically. Making 20mt/y eminently feasible.

SRK have worked with Joy on the mine design. Much on that (inc that the co is aware that further work needs to be done on best mining technique) appears in the 2017 Prospectus

https://siriusminerals.com/downloads/prospectus-and-aim-admission/

Exec Summary, p254:

"The recent trials [at Boulby] conducted using Joy equipment cutting polyhalite with the existing
12HM36 machine confirm the output rates can be achieved and there is the potential for
increased output from the planned use of the more powerful 12HM46 machine. "

and in more detail in sec 9.8, from p345.

ATB.

GK.

Hi SXXPP

Slow release fert. For some applications the sower rate of solubility of polyhalite is a desired trait. This is what CPL's Polysulphate is.

Ctrl F > 'coarse product' on the Prospectus will bring up a lot on the co marketing plans re coarse product and granules.

GK.

Hi Ex-P

"As for the company hoisting 20Mta once the mine is established that is grossly overestimated."

Could 'ex' status be making you a bit out of date? ;-) No time for not keeping up. These volumes are already on the way to being achieved with potash. Esterhazy K3 status Sept '11:

"At start up, we will be shipping 3 million tonnes annually, which will produce 1 million tonnes of potash and then ramp up to the 9 million hoisted tonne target. “Long term, this facility will have the capacity to hoist 19 million tonnes of ore
. . . our Esterhazy facility is currently the largest potash mining operation in the world and with the completion of the K3 expansion, it will be even larger.”

http://www.terralogicexploration.com/wp-content/uploads/CMJ201Oct01.pdf

K3 progress as at Feb '17:

"The North K3 headframe towers more than 380 feet above the prairies. This structure houses two massive hoists — the Koepe and Blair. The Koepe has skips that bring potash to the surface from nearly a kilometer underground. The Koepe hoist will move 60-ton skips, capable of lifting 10 million short tons of potash per year....
3,350 feet below.
On Friday, February 16 at 3,350 feet, the potash zone was reached at K3. This marked a significant milestone for the project and for shaft sinking in Saskatchewan.
From vertical to horizontal.
Once shaft sinking is complete, mine development begins by first cutting a horizontal pass between the two shafts...."

http://www.mosaicco.com/products/esterhazy_k3.htm

'Grossly overestimated' is your conclusion. Deep mine volumes that are evidenced as being lifted today suggests otherwise.......Not mentioned El Teniente yet btw.......some vol!

ATB.

GK.

Some good progress pics

GK.