Member Info for Longtermview24

Tex, no I wouldn't be happy with 7p. I want to remain invested until they're digging the stuff out of the ground. That's when the true value and potential is achieved, hence the moniker longtermview.

What I note - and agree with - is Odey's assertion that this is materially undervalued and it's highly disappointing that everyone can see this yet the guy we pay a million plus a year to cant get anyone else to see it.

I'm hoping someone reads the Odey piece and realizes they could fund this for a big equity and make a killing in a few years time. Odey are hedge fund opportunists and happy to make a quick buck. AAL are an operating company. They are opportunists who can make several bucks in the long run.

What we need Is funding from a non-operating company, apassive investor who keeps the company going as is and has no wish to take active day to day control.

It's an ask, but Odey might just have put us back in the shop window.

I said yesterday that experience has taught me that the best deals are deals that are fair to all parties. AAL are trying to stiff us. That kind of behavior often ends up biting you in the bum. What goes around come around.

The fat lady hasn't started singing just yet.

Odey notes that Sirius’s most recent accounts (half year 2019, published on 17/09/2019) suggest that Sirius’s equity value is £893.1m, a value of 120% higher than Sirius’s Board’s recommended offer. Given that Sirius’s CFO signed off on these accounts as being “Fair, balanced and understandable”, and that Sirius’s CFO also sits on Sirius’s board of directors, Odey struggles to see how the board of Sirius, including the chief financial officer, can recommend the offer to shareholders as being “fair” only 4 months after these accounts were published.

Odey also note that Sirius’s external auditors, PricewaterhouseCoopers LLP, also approved this valuation, and that this valuation is materially below the RPA independent report valuation, published by Sirius.

The recommended offer seems, to Odey, to make a mockery of both internal and external audit at Sirius. Odey believe that it is unjust that Sirius Minerals shareholders are held accountable for the apparent misrepresentation of the equity value in Sirius’s accounts and technical reports and can fully appreciate the frustration displayed by so many Sirius shareholders.

That's a helpful post from cityslicker . The more HL individual shareholder representations there is the better. I would urge everyone to get individual letters of representation - and to visit ww.fundsirius.com, take the survey and spread the word to your friends and family and get them to participate too. There's no reason why funding couldn't, in time, be an open offer to everyone.

A no vote is a cry of anger and frustration. But the harm it will cause will be far reaching. It's not something I want on my conscience.
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Tskid, are you here just to wind people up. Nobody but nobody in the yes, no or maybe camps should feel sorry for Fraser. He drove us over the cliff and he's the only one with a parachute in the form of seven million quid and keeping his job. Please knock it off.

Bjorn, I find your posts and jabs a bit irritating, but the feelin is no doubt mutual. In my defence, though not strictly necessary to defend myself, a lot of my posts were to counter IBAB who was on here morning noon and night. My volume would've been lesser without him to contend with.

I feel strongly about a no vote as I see a path to salvation still available after a no vote (the big boys have too much to lose, mainly bonds). I have not tried to hide the fact that this comes with risk.

There was an interesting post early this morning from citycenter who posed a hypothetical question, would holders vote for a deal where AAL took 80% of the company in exchange for funding. I wrote what I think is a reasonable and considered response to that hypothetical. Feel free to check it out.

In short my answer would be yes to such a proposal, so I'm not a no vote at any cost to screw Fraser. I'm a realist about what can be salvaged from this mess. Even at 80% dilution most folk could recoup their losses in time (I did always have a long term view, even before the wheels fell off) and AAL could be held up as the local community savior instead of the destroyer and they'd still do mighty well out of such a deal.

I happen to think they have overreached in their takeover bid and it will bite them on the bum in the local community for years to come. I learned a long time ago that the best deals are ones where both parties feel they've been treated fairly. If you turn someone over, what goes around comes around.

Fair point Tex. This case, I had thought, was a bit more unique with Fraser having ingratiated himself into the community, won their trust, and become a "local". In such circumstances, holding himself out as "one of us", one might expect the captain to go down with the ship. IMO that's what someone with integrity would do.

Something better for Fraser or better for shareholders? We don't know the terms of the deal Fraser has cut with AAL and it appears, to me at least, that there is a conflict of interest at this point.

That’s a very helpful post. The more individual shareholders that attend, the more likely it is that the 50% of shareholders in favour threshold will not be met. This is an easier hurdle to cross than having 25% of the vote by number of shares.

I agree Fred. AAL (and the Sirius execs that transfer across and keep their jobs and bonuses) are creating a very hostile local environment for themselves by not considering the community support that got this project to where it is today. There is still an investment case that works for both parties even at 80% dilution - see my posts earlier today. The best deals are those that are fair to both parties. AAL are being too greedy and that may come back to bite them, if not in a no vote, then when they show up in the local community. They've taken a very narrow minded approach to this bid. Yorkshire folk wont take kindly to them if they've shafted many in the local community.

In a NO vote scenario, will QIA be back ?

For you Ausinvestor -

Sirius Minerals PLC (LON:SXX) was close to being saved by Qatar’s sovereign wealth fund before a take-over was agreed with Anglo American plc (LON:AAL).

What’s more, with bridge finance it might have been able to keep the company listed on the stock market as it reached the next stage of development at its Woodsmith potash mine.

After Sirius slammed the brakes on its US$500mln bond offering last August, the Qatar Investment Authority was poised to try and raise equity as part of a “short-term bridge proposal”, according to the Evening Standard.

The Qataris, who bailed out Barclays during the financial crisis, bought a 3% stake in Sirius last May, when the shares were trading at above 15p.

However, the QIA backed off after Anglo made its offer in January, even though this was at a price of just 5.5p, having sunk below 3p at one stage in between

Gert, you left off the bit about him adding, "as always I recommend that you please please do take independent financial advice before taking part in the placing. Please don't let my reassuring bullish words and slick glossy presentations bedazzle you. You must, as I've said all along, take independent professional advice before parting with a penny."

Oh, that's right, he didn't start that malarkey until well after the fact when it all started to go pear shape. Thanks for the hindsight note of caution Fraser, much appreciated. I hope you managed to get a good share option package and travel allowance to pop back and forth to the motherland with your AAL contract, while the locals and others pick up the pieces of their lives. What a guy.

QIA won't in my opinion step in. They would have been approached as a potential anchor investor for the consortium deal and it's clear that they weren't interested in a play here.
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Ausinvestor your statement above is simply not true. Read the article in the Evening Standard about what QIA offered and why that offer was not followed through.

It is simply not true to state that there are only two outcomes - AAL offer or administration. The fact is nobody knows how the institutional shareholders and bondholders will react if there is a NO vote and they risk losing substantial sums, very substantial in the case of the bondholders.

The bondholders are saved by the AAL deal. But no deal means they're exposed and there is a likelihood they will react.

Yes it's high risk and everyone should be aware of the downside but it's simply not true to state with any degree of certainty or fact what will happen in the event of a no vote. There is still a lot at stake and a lot to play for.

Ok then Scotsman what about planning. Without strong support from the local community there’d be no planning and no mine and many locals would be much better off financially. Agreed?

Chilting yes there is a risk of losing the rest, but what’s left has been decimated. But the question is, do the big boys, particularly the bond holders, want to lose the lot - and they have a lot more to lose than the average PI.

A NO vote is a risk worth taking to recover my investment rather than 5.5p that crystallizes my loss

Getting 25% for the NO vote will be tricky, but getting 50% of the shareholder vote might be doable if enough individual shareholders turn up with representation rights. Everyone who can, should attend the meeting personally so we can be heard by the court. They will listen to the views of shareholders.

The Times is just rehashing the Yorkshire Post article. There’s nothing new in there. But it does make me angry all over again reading it. Sod Fraser and the jobs without our money there’d be no project and no jobs. Start looking after the shareholders Fraser

Without wishing to hog the board and bore everyone with long posts, IF a deal like the one cityceter proposes was to go through, you could also insist that as well as the 400M equity and 200M bonds AAL kick in now, that they also commit to providing a significant chunk of bond money for the final phase of fundraising in two years time. By then, assuming construction has gone to plan, the perceived high risk parts of the project will be completed, so a regular commercial construction loan should be available, but as a safety net AAL could be required to kick in another $500M in bonds out of the $2.5 billion, if required. That ought to comfortably put any financing concerns to bed once and for all.

All academic at this stage, but maybe someone is listening. In the meantime, while the status quo remains, it's still a NO from me.

Putting some numbers to citycenters proposal where AAL get 80% of the company -

At 13mta production with in excess of $1B net profit, the company ought to be worth at least $13 billion, maybe more if you consider the value of the resource on top of the profit generated. If AAL get 80% of the company, that would equate to issuing an additional 28 billion shares to them, meaning 35 billion shares in issue. That would equate to a share value of $0.37c or 29p on a valuation of $13 billion (as part of a deal like this the BOD should NOT be allowed to issue bonus shares to themselves and employees going forward until the mine reaches 20mta to avoid further dilution and when the project is stabilized cash can be deployed to buyback shares to reduce the number in circulation)

29p is more than 5 TIMES what we're being offered today.

For AAL their share would be worth $10 BILLION for a $400M investment. Surely they don't need to do any better than that. In addition SXX debt would be on the books of SXX rather than AAL which ought to be better for them (their shareholders have expressed concern at the capital they will have to raise/deploy to deliver the project) and last, but not least, owning shares in a SXX as a separate entity would allow AAL to sell down their investment in smaller chunks, giving them greater flexibility on how to monetise the return on their investment

But instead of this fair and equitable outcome a deal is being forced down our throats, generating stress and animosity and creating wounds that may never heal in the local community. Seems unnecessary when it appears that there is a way for all parties to get something from the deal. That's how all good deals should be structured. AAL will never be accepted in the local community if they shove this deal down our throat, and that's especially so if the vote is no and they continue to pursue the deal in administration ((but I firmly believe another party will come along and snap this up before administration in the event of a no vote).

VOTE NO, take the survey at www.fundsirius.com and tell your friends and family, whether they are shareholders or not, to also take the survey.

If we stick together we can raise the funds and/or fight for a better deal, where we retain an interest in the project going forward. A takeover is not the solution

That's the sort of structure they should have put in place for a deal in the first place. It's very dilutive, but gives shareholders the prospect of at least recovering their losses over time, when the mine reaches 10-13mta production. I think every shareholder would, reluctantly, accept such a deal and dilution.

I think this structure would also be preferred by AAL shareholders too as they are spreading their risk a bit better and don't have to come up with all the future funding themselves - the deal hasn't been warmly accepted by all in the AAL camp with the capital that's still to be raised to complete the SXX project.

AAL would also have earned great PR for being the savior of both jobs AND shareholders and bondholders, instead of being the villain for condemning local supportive shareholders to eternal poverty.

It's an act of sheer greed that AAL didn't offer a deal structured in such a manner and that's what has shareholders so angry. There was a way for everyone to get something out of a deal with AAL, and I think they've seriously underestimated the resentment and anger current holders feel, particularly those locally who were supporting this project for reasons other than pure economics and whose money got the project this far and would enable AAL to complete the job, but leave them in ruins.

Memories run long and deep in Yorkshire and the divisive nature of this deal will likely never heal wounds.

I know SXX are reading this board. I hope AAL are too. A deal structured as Citycenter suggests would likely receive a positive response from shareholders. Of course it's not the outcome shareholders would have wished for, but it is a way of recouping losses over the mid-term, and perhaps enjoying a modest future dividend and, more importantly would bring the community and AAL together and not rip them apart as this current deal does. AAL don't need that final 20% to make this a great deal for them. The private investor community need that 20% to avoid a disastrous outcome that will be felt for generations in some households.

Great post citycenter and a solution that frankly Fraser should've sold to AAL a long time ago.

5.5p really isn't going to cut it. I, and many others, would rather vote NO and take our chances on a rescue. If AAL cant see the merit in your proposal, someone else surely will

Government guaranteed bond tranche up to 2 billion. Wtf happened to that. When did that disappear and why wasn’t that announced. That’s material and would’ve changed my investment strategy. There’s cause for a class action right there.

Hopefully no vote will prevail and a rescue will follow. If AAL pick this up they’ll have to contend with a class action for sure. The timing of their interest and the prior relationship of these two groups of Aussies is more than coincidental.