Sticking with it19 Jun 2019 01:19
I am joining this forum because I am invested in Sirius for at least a further 2-4 years and I hope I can contribute positively on the case for backing the company, taking into account the risks.
Over the last four years I have traded this stock in the course of building up a substantial holding - but I confess that I determined to halve my holding last summer, before persuading myself that I could afford to hold the lot through the likely (as I saw it) further downturn in the share price as stage 2 financing approached, and on into the recovery as the mine got built.
I think it's worth my explaining why I planned to offload 50% of a shareholding I had spent over 3 years building up, as it bears on the criticism of Chris Fraser and the SM board for turning to JP Morgan to devise stage 2 financing. I had discovered earlier last year that two of the senior IPA officials who would have been very likely to be heavily involved in negotiating the mooted tranche of guaranteed debt were people I knew and had worked with. If my experience was any guide, their influence would favour heavily restricting Government support, and it would take an awful lot of wrangling to get even such qualified support agreed. If that was how progress panned out the project's completion might be imperilled.
Seems I was right and should have followed my initial judgement about mitigating the risk. But that's my problem, the wider point is that I firmly believe CF really had no choice in the end but to shift away from IPA involvement. When I was listening to CF talking about the IPA in January's quarterly update webcast I thought "Oh dear, I think I recognise that tone of restrained exasperation! At least something has finally been agreed on a guarantee, hope they can get on with timely implementation now." Evidently not, which given the talent for procrastination of one of those two officials (and I mean procrastination not prevarication) was not altogether surprising. Of course I have no inside knowledge of the how negotiations on the original stage 2 plan played out but my settled conviction is that Sirius management were placed in a very difficult position not of their own making. Furthermore, I think the alternative financing plan, notwithstanding the massive dilution, is impressive