Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
Yes, heard the same as well.
I've posted here a few times aiming to be neutral and supportive, whilst being honest and straight (I've got many years experience working in the global mining industry and come from the North East). However, I was often subject to the 'CF' fan club being abusive about my reality check views.
In my opinion I've also thought that the Sirius strategy to build such a massive scheme on their own was never going to work given the risks involved and funding required. It was always positioning itself for a strategic investor to buy the asset. Nothing wrong with that as a concept; it is the mining way in which many exploration projects evolve.
However, in this case the finger of blame needs to be squarly pointed at Mr Fraser. An Austrialian financier (not a mining engineer) who has taken money from the local people by spinning them a very believable story, whilst never having the capability or resources to deliver. Openly taking funding from local people who can least afford to back a loser.
CF has pocketed millions in salary and short term incentives and holds significant share options and shares that will ensure that he finds himself a very comfortable lifestyle back in Aus. I'm sure that he and his BOD feel that they have once again 'delivered' and will reward themselves with further management incentives (no doubt there will already be a scheme in place for a successful divestment to a new buyer).
Anglo are doing what any sensible major commodity business would do - acquire an asset which has clear future potential to add it to their existing portfolio. They are very likely to launch an extensive strategic review of the scheme (a real review, not the nonsense Mr Fraser claimed) and could easily take a year or more to consider their next steps. I really do wonder if they will rush to throw major CAPEX into the existing scheme in the short term (thus potentially another Jansen).
I genuinely feel devestated for the local shareholders who are standing by major losses. This is a further blow to UK Mining plc.
I can't envisage serious counter bids or alternative offers and Anglo are being reasonable and fair in their offer given the distressed nature of Sirius at this time - they could easily wait until the 11th hour and offer to buy it for almost nothing to avoid administration and a pre-pack. They will still need deep pockets and a real management team to deliver an operational mine (with a max of 5 to 6 mtpa output).
Teaye72, Yuri.F & OraclePoly4
Thank you (and others) for your comments.
To be honest Teaye I decided to stop posting due to the negativity directed toward anyone who suggests anything here which isn't wholly supportive; I was never seeking to influence share price or in any way impact shareholders or the company and am happy to apologise to anyone if that was the case.
I can say, being born and brought up in the North, that I do very much want to see SXX being successful for the region and industry. In response to my knowledge, having worked in the industry all of my career I have enough contacts/network to have some insight into what is happening on-site.
Yuri, the SBR can be re-used, as long as it has been refurbished as needed (which it would need after 1,500m of sinking).
The photo's which Yuri refers to are not the SBR unfortunately - these are preparatory civil works prior to the installation of the SBR (temporary formwork and scaffolding for example).
A potential de-risking approach would be to prioritise the sink of one shaft to reach poly (note that UK mine regulations require two entries for emergency egress etc) so it would be very difficult to commence mining with only one shaft - but the underground infrastructure and some development work could be completed whilst awaiting arrival of the 2nd shaft. If it wasn't for the water issues in the Bunter SST a raise bore for the 2nd shaft would have saved significant time and money - but the ground would need to be frozen from surface in advance.
Hope this helps.
LTM
SBR on site not assembled. 2nd SBR still at factory in Germany. Many on Woodsmith site laid off last Friday. TBM continues to make good progress (may as well use the stockpile of rings and machine whilst available).
I've kept off the board for a while as my last posts were deemed to be in some way negative or unhelpful (despite having significant experience in deep mining and having spent my career growing exploration concepts into real operation).
From a purely operational perspective, the key now for the Sirius team surely has to be a single focus on being able to access mineral 'polyhalite' as quickly as possible. It seems to be the only way to provide clear evidence that there is a long term and deliverable plan (both financially and physically).
On that basis, the key would seem to be to incentivise and drive one shaft with much greater focus than the second.
As long as the shaft sinking team (which I am sure they will) prepare for and can deal with significant water inflow whilst sinking through the Bunter Sandstones at significant depths (even with cover grouting) they must ensure that the SBM can continue to work in 'wet' condtions.
Given all of the above, and the current project risk profile, the tunnel may need to be considered secondary and all of the other infrastructure needs to become redundant at this time.
The only sensible route is to access the mineral first and only at that point does the project become significantly de-risked.
There will then always be a way to transport and sell product. Road, rail (buy Boulby?) etc.
For example, the suggestion that the Boulby railhead cannot accomodate sufficient volume must be challenged.
1 train (class 66 loco), 23 wagons (assume HXA at 74.5t each) = 1,713.5t per train.
Given that it is a private line from Boulby to Saltburn and then a very limited domestic line to Redcar, there appears to be an ability to transport up to (or at least?) 12 trains per day to Redcar = 20,562t per day.
Equivalent to circa 7.48mt per annum.
Larger wagons, more trains, all equals early revenue.
Just a thought whilst the strategic review continues in silence.
Myosotis
Of course it is only my opinion, I am not seeking to speak the truth and certainly not attempting to be arrogant - but how can you be so confident in the technical reports published within the information issued by to company?
I guess many years of real experience doesnt counts for a lot these days - so I may be wrong, but there are many reasons why I may also be attempting to give the alternative viewpoint.
On cuttability, do you see any references to specific energy testwork in the SRK report.....and why do you think they shifted from a fully continuous miner proposal to one with drill and blast as well. Machine manufacturers are very good at selling machines after all.
A room and pillar layout with 16m wide rooms as presented will not stand up at 1,500m - no matter how much computer modelling work has been undertaken. But hey, what do I know.
There are no equivalent references in the world today producing the annual output that Sirius is aiming to deliver upon. That should, as a minimum, raise some questions about the ability to meet these annual targets - which after all are the key to financial returns to shareholders.
Anyway, as I've already been told elsewhere today on this forum, I should take my pick and shovel and disappear off back down a dark hole as clearly members are not very keen on anything that suggests something different to the Sirius messaging.
Thanks
LTM
Amazing how people can be so rude from a keyboard. I wish you all the very best with your investments.
Myosotis
Thanks, however I did review these reports when they were issued.
In reality, many engineers could write a thousand pages without any real pertinent detail.
I would just suggest that you think about how they are going to deliver world beating continuous miner and drill and blast performance from so few working places underground.
If people would rather not have the truth then I will refrain from posting and leave everyone to continue to speculate and try to grasp at straws.
LTM
(p.s. only allowed a short note on here and a summary is much more challenging that a long winded report).
Hi BB
Thanks - but please note that Sirius are using two totally different machines. Your youtube link goes to the VSM - see below.
The VSM (vertical shaft sinking machine) was used for the initial ground level to 120m of the foreshaft for the material transfer shaft and is manufactured to works underwater.
https://www.herrenknecht.com/en/products/productdetail/vertical-shaft-sinking-machine-vsm/
https://siriusminerals.com/latest-news/news-stories/sirius-sets-world-record-with-vertical-shaft-sinking-machine/
The SBR (Shaft Boring Roadheader) is the machine for the two deep shafts down to 1,500m and are not constructed for use in or under water.
https://www.herrenknecht.com/en/products/productdetail/shaft-boring-roadheader-sbr/
https://www.youtube.com/watch?v=19tsReHvHM4
Completely different.
LTM
I hate to be the bringer of harsh reality to the party here, but I feel that the time has arrived to setout some facts. As an experienced professional mining engineer I feel that I do have some valid insight to contribute here.
Unfortunately, it would appeat that Sirius is going to be the next Channel Tunnel - too large to fail, but never realising shareholder returns for decades, with multiple re-financing/re-structuring and new dawns.
The reasons are pretty simple. Complex and expensive infrastructure due to National Park planning constraints (why doesn't anyone comprehend the challenges and costs associated with a 37km long concrete lined TBM tunnel?) 1,500m deep shafts to pass through the highly waterbearing Bunter Sandstone (Boulby shafts experienced major issues to pass through the Bunter at a higher level, including being flooded out in one shaft) using innovative shaft boring machines that are not built for wet conditions and then the major serious issue which no-one seems to even think about - an annual run of mine production rate of 13 (yes, I will write that out, thirteen) million tonnes per annum.
I've not even mentioned the product selling price, ramp-up sales pricing strategy or acceptance by the farming community to a novel and unproven product.
I fully understand why local people and others have been attracted to this project - a promised long term return from a low risk project with a huge resource base - great publicity and very plausabile presentations do not equal low risk investment.
Boulby managed to reach (after more than 15years) 3mtpa in much softer potash with high production continuous miners (the same machines can't even cut polyhalite). They have taken almost 3 years just to get to 1mtpa of Poly production, despite extensive experience. Boulby took more than 10 years to report any profit, let along return value to investors.
Even if Sirius navigate through future construction funding, shaft sinking and tunnel construction, it appears at the moment that it will be almost impossible to deliver anything close to the predicted annual mine output. I would suggest at best 4 to 5mtpa which will prevent any return to investors.
This really is a case of the financial model inputs driving the outputs. No doubt the senior management conversation was 'how do we maintain NPV and IRR with the massive rise in CAPEX' ..... 'what if we increase annual production to offset the CAPEX ----- ah, yes, well if its 13mpta the payback is 10 years'. Just tell people we have billions of tonnes (non-JORC of course so no real valuation) in-situ and it all makes sense, unless you really understand trying to mine evaporite deposits at depth.
In reality, CF should be worried about the people of North Yorkshire who have invested life savings on a project that just doesn't add up. I certainly wouldn't be so confident that they will have a 'happy ever after' result.
No 'hot' prospects here.