Member Info for HopefulDave

And yes of course, don't forget the IUK guarantee component... Thank you Scotman!

There are multiple banks, they will each lend a few hundred million that is senior debt, secured on the assets of the mine itself. Then each will also no doubt lend a portion (few hundred million again) backed by the IUK guarantee.

The combination of the IUK guarantee component, the security on the mine itself, and the massive contingency already built into the biggest riskiest components (tunnel and shaft construction) and the extra cash either raised alongside this (worst case equity) or completion finance etc, is the final part of the risk/guarantee.

It's not a 105% mortgage in a market where house prices are dropping.

It's a circa 70% mortgage (already have 30% "equity deposit" in what's been spent so far / construction to date) in a market where the "house price i.e. Polyhalite" price will be increasing, and of which 35% (i.e half of the money lent if $1.5bn guaranteed) would be guaranteed.

So think of a mortgage application when house prices have already collapsed to a low, someone has a 30% deposit, and their parents are guaranteeing half of the mortgage, and they are in what appears to be a very steady job (TorP - market research, ICL selling Polyhalite, ADM on-board, Wilmar on board etc etc etc)

"The bank is not going to see it as taking a gamble"

The product is proven, and becoming more so every day:

They see the TorP's.
They see ICL selling Polyhalite and expanding production to 3Mtpa if they can.

They see the business model of cost to produce.

They can see the construction contracts and the risk associated and who carries it.

THEY wanted the extra contingency in the contracts, they want the extra $400-600m for contingency.

That is "the risk" part of it right there...

If the lenders see desperation?

We aren't on dragons den, these are negotiations that have been ongoing for a few years, and they have only recently signed the final construction contracts.

The SP is completely irrelevant to the ST2 fundraise. Nobody buying or selling the shares now (or risk jail time) has any knowledge of the ST2 bank negotiations.

It will be a long and very boring process trawling through all those documents, it's like one massive mortgage application, it is basically as simple as that, but there are a lot of documents!

All the banks want to know is, are we capable of paying back the money, will the business make money?

The banks are just as desperate to lend the money out to any viable business just as much as we are desperate to borrow it. They don't make money unless they lend it out, we don't make money unless we have it.

It's just a very long drawn out process but one fortunately due to finish up soon.

Maths was out...

11.76% -> 16.66% but meh, close enough and makes no difference in the grand scheme of things.

**All about the $3bn and those letters** The $400-$600m is quite frankly a drop in the ocean, and if you can knock off another chunk with completion finance / unsubordinated debt on top of the $3bn debt package (as the company said it will look at) that % of the overall amount required will drop further still.

IMHO The market machine is fleecing people of their shares, it will find it increasingly difficult to do once it is just the mine and construction on the way and the threat of any further dilution is removed...

So yes, December is indeed going fast and as such, the market is doing its best and taking advantage of Brexit (where we ironically don't even have TorP in Europe!) panic to fleece people.

Just my two cents, but clearly not the only one who still sees the terrific long-term value here as per Jim G's posts....

Avocet. If it’s just the contingency cash needs to be “raised” it represents between 11.6% or 16.66% of a $3.4bn or $3.6bn fundraise. It is not a field on AIM with limited sales, raising $1.2bn with a further $3bn + to come. It is a business that has been ratified by a group of banks as viable and lent $3bn to. If it is just the extra $400-600m and it’s rhe final fundraise on the back of a business which has been validated by the consortium of banks and its no longer just glossy SXX publications saying how much money we will make etc.... Then any placing for $400-600m will be based on the end state I.e. a company that will make billions of dollars and a company after raising this effectively small amount will have access to $3bn to convert into real assets every day. It will not be placed at a discount to the SP whatever it is at the time it’s announced, it will be done based on the end state. Not all placings are done at discounts some are at a significant premium. This IMHO as a tiny amount in comparison to the overal ST2 package will be one of them. Think about it. Think abut the overall valuation of the company post ST2, a fully funded business where lenders have seen every Torp, construction contract, financial model, and lend us $3bn. If it’s just the contigency cash. We have absolutely nothing to worry about, and this price is an absolute steal. IMHO.

Looks like cut is going to be agreed WTI already through 53 (currently 53.73)

Or even progress stupid phone / hangover.

The final diaphragm wall panel has now been cut and cast on the production shaft at #WoodsmithMine, completing the headgear chamber walls. #progress #fertilizer From Twitter.

MM. Interims it is with hopefully a positive update on progress elsewhere. ED could finish its frak anytime from today onwards, all depends how many stages Citadel has managed to have done alongside Hagar and Thunder. The latter two could have finished up today based on previous frak progress on two wells, but we don’t really have any visibility on progressing 3 wells simultaneously and how much faster they can go than that 6-6.5 stages a day with 2 wells when they have 3 available to frak. Hopefully Citadel is done or nearly there also and we can move on with flowback, given that 2 of the wells were already flowed back for 5 and 7 days respectively (assume to provide test water for Epiphany) then I imagine they can be resumed first, I wonder how many plugs / stages they drilled out to get the flowback going on those, and therefore how many more to do on them? Either way, ED will progress soon and very welcome that will be. The rest of the projects I hope we have positive news on also. I would have thought the rare gasses initial test / analysis would be back soon also, and could land any day. I think you timed your buy very well, and nobody can knock a 40% + quick turn around short term profit if you take it, but IMHO with the right news on Argon or Nitrogen this absolutely fly.

Ie while they were waiting for water to restart frak jobs? Maybe drilled out few plugs from those wells and flowed back couple of stages just to setup the Epihpany solution, and give it some water to play with / ensure it’s ready to go when the frak stages complete?

Possible this was partial flowback as alluded to on COGCC before? To Calibrate and test Epiphany solution prior to main flowback happening?

JJAL - I stand corrected! The RNS was released on a Monday, of course they finished the Frak operations over the weekend itself as per detail in the latter RNS, you are correct in that it stated 17 days for 110 stages on the first two, the average (5.7) I had taken previously took into account the start and finish notification dates, of course that was only available to notify on the Monday itself even though it had finished over the weekend!!

In my original dates I went on ~6 a day as opposed to 6.5 fraks a day, so the extra .5 will certainly help turnaround time and hopefully keep a 6 a day rate doable, and possibly a little accelerated as opposed to decelerated if moves up to 6.5! :)

Still not convinced on Citadel being much more advanced than the stage 1 that it was reported at on the time as the stages reported on the other wells make the pace 5.8 a day. It could fall (RNS) on the Friday 8th but would need to finish early enough on Thursday to get the RNS in so perhaps Monday 11th / Tuesday 12th is most likely, unless Citadel was a little further along..

Either way. On track, or perhaps a little earlier than expected :)

“Noice” as the kids of today say.

JJAL I did see that also. I hoped it would have been carried out as well, but didn’t want to suggest that as a possibility as wasn’t sure they would have done all 3, or if Citadel has been frakked to completion (from stage 1) on that date. It seems to me too many stages to have done in that short space of time, but I’ll very happily receive better news if it comes!

.. how we expand on the commercials with that project. What’s in it for us elsewhere?

Plenty of possibilities for updates on the projects in the interims themselves, if not before, so hopefully we should begin a positive flow of news and sentiment returning.

Enjoy what’s left of the weekend peeps.

East Denver:

COGCC shows fraks running on schedule.

On 28th November Frak stages remaining on Thunder and Hagar combined were 39 in total.
If they are still averaging a stage roughly ever 4 hours, then will have completed a further 18 stages by 7pm tonight, and therefore in approx 3 more days would finish those around 7pm Tuesday 4th.

With Citadel the only well remaining (as far as I can work out) there are 47 stages left on that.

That would put us at completing Citadel within 8 days from starting it, on the evening of the 12th. So it’s possible we could get confirmation they are done by the interims.

However, according to the timing of the initial wells it was around 5.7 frak stages a day, if that holds true on these wells also, that would push it out by a few more days... Not sure if the zipper fraking speeds up the two wells being done simultaneously or not, time will tell.

Regardless, after the initial delay on water shortage, it’s really good to see these are still on track with this revised schedule, and as such flowback should start as predicted. Also a bonus to see COGCC doc stating the gas sales line going in also.

Kansas (Rare Gasses)

More guess work than documented evidence here. My hope is that we would have our samples by now, the PSA video
went up on the site two weeks ago on Monday... So pure speculation, but would they have filmed it before it was working, just as it was working, during construction and after? Who knows?! Personally would have thought they’d have it working then look to film it, and if that’s the case it would have been working more than 2 weeks ago...

Either way, with luck and most likely at least two weeks passed since flipping the “on switch”, the samples are hopefully lab bound if not already there? How long to test and next steps from there, unknown, but there is a distinct possibility based on that we could get some news on this before long.

Kansas (Nitrogen)

A certain persons favourite. “Advanced negotiations” but clearly with the PSA etc it’s obvious to see progress has been made on site. I’m guessing at some point we will get an idea on drilling plans or recompletion plans looking at existing plugged wells / data. Clearly the news many crave, we know well drilling / recompletion shouldn’t be expensive per well, and given the flow rate, well payback should be rapid. All about getting the nitrogen off to market I guess, however a further idea on number of wells looking to drill etc could help people realise the size of resource, value of the resource and of course how quickly we can gain revenue from it.

Ephiphany: Expect this is itching to process flowback water en-mass, but won’t be long before it gets it, alongside prod water when Powel and Wildhorse are back online.

Water Resources & DTU: Not going to speculate on further progress with Helios water or DTU. Would expect next news from this will be more information on Epiphany details and how we expand o

https://www.nytimes.com/2018/11/27/business/energy-speculators-public-land-leases.html?action=click&module=News&pgtype=Homepage

See. You just don’t get it. Pointless engaging you at all!

JJAL. The point I was making is it has worked in our favor as the price for the resource has gone up at the same time we now have people that want what we need to get rid of to get to the Helium.

How you cannot see a positive in that is absolutely beyond comprehension. If we had got partners in and developed it on the basis of paying to have water removed and recieved $100 for the helium the % we could have retained would be severely reduced compared to having possible funding to provide water to a basin and as a by product we are producing methane and helium...

Why do you ignore any positives with regards to Helium plays becoming specific targets themselves regardless of what else is mixed with it? People are now funding those type of projects.

We have methane at 90% to go with that helium, and hundreds of millions if not billions of barrels of water that are desperately needed in that basin to develop the shale play.

So who could possibly look to fund that. Urm. Didn’t I just suggest a perfectly viable possibility for that?

As for Nitrogen you clearly don’t understand how it can be transported away from the field, and make mocking jokes like I think we are going to get a pipe from Screwfix, so it’s actually pointless trying to engage you in a sensible conversation about possibilities, as you seem to ridicule any possibility of anything working out.

Perhaps when the interims are released we won’t be as desperate as some people are trying to make out...

Clearly you have ignored all the posts on funds (major multiple hundreds of million dollar funds) developing water plays in the Powder River basin (and others) but that particular basin is clearly of specific interest to us as nearest our Montana play.

DTU is a technology trying to break into a field which takes time to embrace new technology.

Water is water. It’s in short supply, it’s needed we have it. They don’t have it, no oil play. See the problem there? No oil play, see the solution, provision of water..

Nitrogen is required in large quantities and specifically in the proximity to where we have found it.

These are not funding ground breaking technologies that take time to adopt, these are commodities that are required and needed today, and in the immediate future, so it’s a completely different situation to that of funding DTU.

One basket? More like a Harrods Hamper.

ED wells are about to come online.
Water Resources: Epiphany project and no doubt further details of how that pans out to come at some point.
Nitrogen resources.
Argon being tested somewhere and clearly must be looking at something special to commercialize it in the quantities (% of overall gas) that we have, with then small quantities of Helium to also add if that plays out ok.
Methane and Helium in Montana, with water in the way of it.
Water Resources: The Powder River Basin, with a massive need for water near to our Montana play, which has a lot of water to get rid off to drive the shale plays there...
Future play large acreage Co2 to see how that develops.
DTU - still time for that to prove out.
Possible acreage expansion in other (less sensative) areas of Denver.
Possibility of further development of ED in itself.

Helios has had the water frak stage opened up - that was the initial development that was planned and its been carried out. The fact that Eagle and Muddy although separate formations and potentially separate plays in terms of drilling and extraction techniques, they are co-located in terms of infrastructure and pipes that would be required to remove the gas, so also can go hand in hand. One play being more economical than the other, might make a play that by itself may not be viable in terms of pipelines etc, but if have them there for the other one, then the second formation could prove viable as an “add on”

With people wanting vast amounts of water, we have more options available to develop the play than before.

So you can rush in and bodge it up, or you can now see more options for expansion with that (which ultimately is our current biggest potential resource) and develop something that has huge benefits to both Eagle and Muddy plays in Helios2.

The bigger acreage plays will obviously take time to play out, but any one of them could get partnered with large funds sniffing around water plays. Helium becoming viable to go for by itself, and as already alluded to large consumers of nitrogen in Kansas.

Hardly all eggs in one basket stuff. There are big potential backers wanting what we have, some here are focusing short term, way too short term, and despite the positives that can be released soon with ED coming online (which is taking no resources of our own to deliver) Any one of the other plays could make an absolute mockery of the MCAP in an instant.

Get the frustration with the SP, but aside from that (and the way WD turned out) I’m still extremely positive on the position of the other projects.

If we had rushed into Helios, it would have been done with Helium at $100 and now it’s what $250+ ? Probably added more value by letting our options to extract it develop!!

Surprising. Given that Brazil was not always going to be the easiest thing to get compliance closed completed. Initially it was a few weeks and here were were this far away and still it was not concluded, but it is now. Should mean that due diligence has completed on the whole deal, including the offtake component and one assumes lenders be happy with that also.