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Hi Myo, agreed - this is what I was saying, before we had too many involved, and we've seen 'early spikes' before announcements.
Now with just one party, and new, I would think there is less chance of the same happening.
M
andyrp,
not sure we will see that ... in the past, there were too many bankers and their teams involved.
Now, it is just one new kid on the block...
I think that SM will be able to keep a tight ship on this.
IMO
M
GK,
You are absolutely stop on - do not assume that the shorters know more....
One good example is some 5-6 years ago, when Porsche was building up stakes in VW, not disclosed in the market, and with all Automakers shares falling only VW was going up, and many PE companies gone in to 'short it'.
Not realising or knowing that there was a reason behind it.
If I recall, the combined losses for the shorters was some Euro 40 Bil , and few PE funds lost E4-5 Bil each, some gone bust.
Therefore do not assume they know better = they are gamblers, a lot more than us here with SXX ...
For sure no Pension fund would engage in such binary game to risk peoples' pensions by playing the short game, but PE ... or the 'following crowd'... anyway, this is their problem, not mine.
But also, do not underestimate them too ...
IMO
M
GK,
Excellent statement!
M
But I think it is a fair statement - rewards can be huge, but be aware there is a risk of the downside.
He is not saying anything different to us here.
Comes down to believe, and appetite for risk reward.
And by the way, if you have shares in SXX, this should be nothing new to you.
Me = I hold.
M
Cherokee,
I shared personal experience - I've seen a newco bringing something new, disruptive to the Blockbusters model (do you remember driving to the B store to rent a video for the night, then drive to take it back? ... I do, and that is when I've seen Netflix, I know B will be history sooner or later, like VHS and later DVDs.
But, got greedy on doubling my money, took it out ... some > x 300 times if I left it.
Done similar with few other, chasing 'short term', or 'medium term'. Now I agree with Buffett - invest in a company you believe has a future, good management, and leave it there!
And yes, now Netflix has competition - Amazon, Google and Microsoft rentals, etc etc - even BBC and ITV are looking to bring something in... so the market has space to grow, but there are many hungry sharks coming to the feast.
Poly 4 = yes, 20m t / yr is the planned ceiling ... (in theory they always can expand more, build more shafts ... although unlikely). If the $ generation from 20m t / yr is not enough to justify your reward desires, not sure what else would.
At 20 m t / yr, assuming current Base case $ / tonne, we are still around $3b / year at max capacity.
Call it GBP 2 bil - as divis.
If we end up, for the argument's sake, with 20 BIL shares, this is still 10p / share Divi.... Yield 5-7, so sp should be 1.50 - 2.00 ... this is nearly x 10 from today's price, as worst case scenario and beyond ... and still beats market return x few times over.
In my personal view, and no one has to agree with anything I am saying = I see a 5-10 years 'safe bet' to not lose my money, with a relative high possibility that I can can get a significant multiplier to my investment for 5-10 years from now.
My 0.0001% of a penny comment.
M
JR, to lough or cry, I recall buying at 4 something and selling at 8 something... made 5k...
And yes, I seen then them take out Blockbuster, as disruptor, although others started to copy them.
Whereas Poly 4, is disruptor and has no substitute. Hence trying to avoid missing out on this.
M
Fred16,
I bet that you are a lot of fun - I guess you and my other half would have a cracker of a night out.
Although it is a straight financial investment (and it is: get funding, x 10 bagger, but if we have ST2 issues will lead to 5 year to recoup current price ... at least no loss), it is an interesting opportunity, story, and ... sentiment (not too good as pure investment decision, ...)
I recall when I bought in Netflix at the beginning, and after doubling, cashed in ... even today my other half points out to me that if I holder to my beliefs, I would not be on this board, and the chateau I want would have been mine long ago.... Google, yahoo, even amazon ... same.
SM has a disruptive product, massive uplift potential ... I am not losing this one.
If all goes somethingxxx up, I know I will recoup the cost at least in 5 years from now, worst case. Regardless what super loser says...
If you make to to the AGM, and / or 1 pound party = would love to buy you a drink ... although I think we will all can afford to buy a round, so, it may be a long night (and for clarity, super sausage this does not apply to you).
M
Aubery, I think we need music like Ave Maria until April, the we can switch to Monty Pythons...
M
Vin, I agree, as LTH this is what we want.
But this is life, few people are making a living by making 20-50 quid a day on trading it.
The most importantly, these trades help provide liquidity to the stock. And this reduces volatility.
And yes, if someone is happy to sell at 18, then the algorithms will pick it up and adjust.
If many are happy to buy on growing trend, 21, then it will move higher.
IMO
M
Yes Thorpe,
The only problem is that other Councils' members are too busy preparing to try and be elected as MP and hopefully ministers in future Governments ....
It is sad that we don't have 'real life' people, with real life 10-20 years working experience, CEOs / teachers / Doctors going to be MPs.
How many Doctors (of Medicine, not Political Studies PhDs) do we have in the Commons, and how many lawyers or career politicians? And what do you learn in the political studies: say what they want to hear, deflect true answers, and do what you want but blame someone else, right?
Glad that SM is at least promoting itself, otherwise we will not hear of anything other than photo opportunities ...
IMO
M
Why collateral? Isn't it a senior debt with security over all the assets already?
The Debt provider already has 100% of collateral, way ahead of any shares and shareholders ... regardless how many shares there are ...
This is a Superloser idea again I suppose ... why do we entertain his loser debates?
M
Would't be nice to have the champagne party for the TBM launch to celebrate ST2 finance news as well? Will be a cracker message, construction progress on target, funding done (on target for April) ...
I just wish they invite us, SH, to see it and be there as well.
I will absolutely travel to the site for this!!! ... wish I could take a selfie on the TBM, would be for posterity!
M
NB - oh, did I mention? ... will also be a celebration of Zero shorters left... they would all be busy selling their assets, houses, to pay for the losses...
Cherokee, agreed - that was the topic I was going to reply to you on, but vanished? ... why? Not Brexit, not cats and dogs, was actually a good discussion on SM potential Balance sheet structure that we, investors, are trying to discuss.
Or, should we move to a different message board? Please let us know your position - if you want to close the SXX board.
M
Strange, topics and messages are disappearing here faster than than an F1 car takes the bend ...
Anyhow ... As wwgk shared the analysts view below, once funding is done, sp around 50p = assume MC $3-4Bil, at production 2023 MC $8-9Bil.
Day 1, May 2019: new Deal (assume $3b borrowing facility, some $600m as convertible debt). Debt Zero (actually, we still have some left over cash in the bank, MC $3b). Debt / Equity ration? ... NA
2020 end. assume we borrowed 1.5b by then. MC, with gradual derisking, $4-5B. Debt / Equity = 1.5/4.5 = 0.3
2023 end, assume borrowed $3b by now: Debt / Equity = 3 / 9 = 0.3.
2024, we start producing and pay back = D / E = 2.5 debt / $10 = 0.25 ... and dropping. Divis around $500/yr. Possible refinancing, depending on the new deal.
2029, we repaid say $2b, we borrow $1 more for capacity to 20mt/yr, D/E = $2 / MC $15-20B = 0.1... and decreasing.
2030, debt Zero, MC >$20 B, ... Divis / year 2-3 bil.
If this is PE party, my gut tells me that they will think on the lines (but this is speculation): we want 25% of the company, for $600m, via a convertible debt instrument (so we make some interest until we know it is worth converting), plus we offer you the borrowing of $3. So they know they will make interest on all the money, have security on the overall asset, will get the money back and if so successful, they get 25% of a $20bil company = $5 Bil for $600 (+interest received).
May be a nice, simple way to de-risk the rest of the needs and move on.
(consider that our shares will also perform as well... win win, risk eliminated).
But, there is still risk ... we need this deal completed end April, otherwise my rosy picture will change colour for the current SH very quickly ...
IMO
M
Fred16, he got me with the house too .. the Bentley etc ... LOL. I have the specs ready ...
Like to Cut de sac part ... once you are on the road, is either the manor at the end or the road, or the dust of the road ...
M
We just need one, little caveat:
To CF: Please don't screw this up and and we find ourselves without finance in a months' time ...
the rest, .... the great team at SM will deliver the construction and run the mine!
M
GK
You are stealing my job ... lol.
Yes, fully agreed. At a worst case 8 bil we are doing fine. and you are aggressive too in assumptions for the Yield 10% etc ... likely 6-7%.
Highly likely will be around the 7 Bil shares mark, possible less. this is then the icing on the cake.
I think this is not a bad return, would you say? slightly better than Premium Bonds, or investing in Cuadrilla (lol ...).
... second Bentley will be on order in 2029 .... (I will give SL a free lift from the bus stop if I am in the area).
LOL.
M
Thank you.
My half a penny here: it is likely that the private backer refers to one party really, not a group.
Global financial institution = Private Equity.
If it is a Private Equity (say Blackrock or pick one from the top 200 PI global companies, all have >$3b spare), or a Norway / Sovereign fund, they are likely to also want a piece of the pie. Therefore they may provide the $3b liquidity but also they will want an element of conversion or upfront placement.
The only Questions, is how big? $600m = GBP400m-ish, at 20p / share = 2Bil. shares.
Add 4.5 and current conversions 1.5 = we may end up with 8Bil.
They may do the shares first, then with 'up to $3b' lending facility (whatever form, loan, bonds etc). If we do not need this contingency, they would lend $2.5.
Alternatively, $3b lend, but if later need the contingency GBP400, they will do it then for 2 bil shares. This would be the most attractive for us and CF.
If this is the game plan ... again, I am speculating on empty information database... so it is worth not a lot.
IMO
M
(and here I am breaking my rule and do an empty speculative statement ...)
wwwguk,
where did you see the comments, could you please post the link.
Thanks,
M