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I wouldn't panic about speculation of warrants...
firstly, SM does not currently have the remit to offer them, they would need to come back to the existing investors and get it agreed via the standard process.
secondly, it would undermine the existing stage 2 financing proposal that investors have already signed up to by buying the open offer and convertible bonds - so that would be hugely embarrassing for SM and cause significant anger and endanger the chances of further investment from those who took part.
thirdly, if they can't get the bonds away without offering warrants then JPM would likely reconsider offering the RCF facility as it is part of the existing stage 2 financing package and that does not include warrants on the high yield bonds.
So it is safe to assume that CF would, like Boris, rather die in a ditch than offer warrants, therefore I would conclude that he is doing everything possible to get the bonds away as they stand and certainly wouldn't be telling people he had every confidence that they will get done as that could be taken as very misleading if in the back ground he is talking warrant.s
More likely, the rumor arises from the aspirations of some very greedy investment house to cream even more from financing this company.....
", we believe for every meter of loaded conveyor weighs approximately 1 ton, potentially that conveyor will be hauling 35 000 tones on full production. ."
hey polyminer - I get a completely different calculation to yours as follows:
11mta = 0.88 tons per hour belt speed 5m/s (capable of 7.5m/s) = 18,000 meters per hour = 0.05 tons per meter of belt
20mta = 1.6 tons per hour belt speed 5m/s (capable of 7.5m/s) = 18,000 meters per hour = 0.09 tons per meter of belt
obviously it won't run 24x7 but looks like there is a lot capacity in those numbers
regards
"Good post Max,
I am very confident that CF will ensure we get the RCF and that the project will continue at full speed.
My concern is if there has to be an equity dilution attached to the bonds meaning my skin in the game is reduced.
I cannot decide if the lack of news is a good or a bad thing...."
Aubery - thanks. I think everyone would like to see it conclude quickly now but given the shambolic RNS issue when they pulled the bond sale I suspect they will wait until the whole deal is done now...
As for dilution, I have been in this since 2013 and have a considerable investment at stake so any dilution would be a major disappointment. However, I think it is unlikely as it is not part of the agreed stage 2 funding structure.
I have a couple of questions
"Did the bonds go on sale or were they pulled before?
Am I right in thinking that SM need to sell the £500m of bonds before the end of September to realise the RCF?"
Skater - They were building a book for the sale and made the decision not to proceed, we don't know if that was because the book was not full or because minimum rate demanded was too high but I suspect the later.
The deal with JPM gives them until the end of October to get the bonds sold in order to activate the RCF.
Also, remember that although people say they are about to run out of money, clearly they are not, evidence by the fact that they have not scaled down operations which they said they would do (and have a legal duty to do) if they though the money was not coming on time.
I clearly meant "would not have got funding without them.."
Simple facts:
1) convertible bonds are an absolute pain in the a*** they give massive upside to the holder whilst protecting their downside, and further allow them to hedge the position with shorts in the market.. and are not available to non-professional traders.... but we would have got funding without them....
2) All the II's that bought shares in the funding rounds 15p 20p etc did so for upside not to simply short the stock and they will not be selling down here at a loss.... they will be on top of this situation...
3) So given the 100's of millions invested by the II's they won't sit back and let it collapse.... they would start buying here in the lows to avoid such a possibility.
4) if as some suggest a predator came knocking to buy the company cheap, it simply won't happen because they would need the agreement of the shareholders and the IIs won't sell unless they get their stake and a handsome payday on top, and they hold enough to block it.
So take heart from the fact that this current SP is being manipulated by short term interests and will soon recover.
For me the unfortunate element is that even if they had to pay a higher coupon say the 13.5% mentioned it would have been worth it compared with pushing the SP to such a low base by delaying the sale of the HYBs
I have a significant stake in this and won't be robbed of my shares by this tree shake....
a proper TROLL comment
I have had a conversation with IR at Sirius regarding today's RNS.
There was plenty of meetings and potential interest in the bonds, however they have decided to wait until September because of the general market conditions developing last week with the sell off. It is not the case that there was no interest, just timing from what I gathered.
How when it's tanking can I not even get a quote to buy, no matter how few I ask for........? anyone
"At this price, ST2 funding may not happen. If you were a bank, would you lend ??? This could go under, and what's the bet someone like Branson doesn't come in, and pay 1p????
I know It wouldn't be Branson, as he's not into mining, but you know what I mean"
the simplest reason is anybody wanting to takeover would have to get enough shares and shares votes, they can't accumulate that much percentage on the open market to force it because most are in the hands of institutions now and they wont vote for it end of..... plus if you were interested in buying it then you would wait until it has been built and therefore de-risked.....
"Finally a reduction in them. Hopefully more reductions on them tomorrow. "
the shorts are pretty irrelevant as they will bee 99% part of a locked in trade strategy, ie: hedge or options. they certainly will not be naked shorts.
the only people likely to have a naked short at these prices are the 6p derampers and they wouldn't have the brains know how to get a real short in the market anyhow....
chances are shorts will increase as the price increases to lock profits on the convertibles and other options...
10-12% would be about right for high yield mining bonds.
"Sorry to rain on your £1 parade but this stock is dog poop 9% shorted and bonds which are a drag on price better prospects elsewhere 10p target imho."
well BanterBoy how about a touch of realism....
For the price to get to 10p what has to happen?
A: People who bought in above 10p would have to be selling at a loss..... and the volume of sales would have to be overwelming the buyers at that price. So a most unlikely scenario anybody holding with entries less than 10p are clearly LTH and not going to be selling there.........
So barring a quick dip in very low volume you have got no chance of seeing 10p
can anyone remember how much if any extra allocation we got?
The offer was 2 for 25 but I can't remember if we ended up with any extra allocations being met
thanks
So taking the diluted effects......
NPV at production $14.9bln / £11.5bln
gives £1.66 full value against 6.97bln shares
gives £1.34 full value against 8.63bln shares (IF IF IF all bonds convert)
You will never see full value on a mining share.....
as a project that is proceeding SP should today be be in the 40-70% discount range
ie: 50-99p based on 6.97bln shares
ie: 40-80p based on 6.97bln shares
the discount should narrow as production gets closer.
so once all this dust is settled take your glass half full or empty whichever you prefer and set some targets based upon some reality..... 50p will do me
Existing shares 4,797,057,259 @ 22p = £ 1,055,352,597
15p placement adds 2,180,480,570 yeilding £296 mln (after finance costs)
SO new total 6,977,537,829 shares value: £1,351,352,597 so dilution to: 19.4p per share
everything else is just market noise atm.
IF and that is IF all the bonds convert ($244mln didn't before)
then we add: 1,653,333,333 shares yeilding £296mln (assmued same as above cost of deal)
giving Total shares 8,630,871,162 value £1,647,352,597 so diluted price 19.1p per share
Everything is relative to the 22p base price from the announcement as it should be.
So can we now stop all the crazy 10bln shares talk because it's not real
Can we stop the "given away 90% of the company" because it's not real - there is no company without this money which adds value to the company.....
and if only the PIs would stop panic selling into the void the price wouldn't keep dropping so desperately.....
Now you have the infrmation to use against NPV and can calculate where the SP will go between now and production....
no doubt the short sellers are starting to cover their arse's by buying up all the PI panic sells this morning.... after all it can't go much lower so risk is skewed to the upside for them now....
you're wrong.....
DYOR
existing shares: 4.8bln add $400 placing @15p = 6.8bln new diluted value 20p based upon 22p close yesterday
net of new bonds $400m assume 22p conversion new share total 8.27bln new value 20p
the bonds won't all convert just like $244m have not converted from the last lot.
so it all winds back to the original 20p placing price for IIs last time....
it could alway sbe better but actually all good imo
I see I see, so 40% less of the pie but the pie is worth 400 mill more
Omir
like this
4,797,057,259 existing shares
1,055,352,597 value at 22p per share
400,000,000 add £400m cash recieved
1,455,352,597 new value
6,797,057,259 new number of shares
21.41 new share value after dilution