Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Okay
(6 of 6 continued) There is a limit to what can be said on a forum such as this. I wish to stress that these are all my own personal views. I have seen no evidence to suggest that they are fact & do not seek to indicate otherwise. I accept that I could be completely wrong, but I have got to a stage with this where I felt compelled to put my thoughts in to writing. You would have to make your own minds up as to whether you think there is any mileage in this, or whether it simply constitutes the warped ramblings of a deluded old fool.
From what I have seen, I fully expect that there are those on this board who will seek to bury this post beneath hundreds of puerile or twisted comments. I don’t intend to become involved in further conversation or posting, rather to leave my views out there in the hope that someone perhaps sees them & are perhaps able to develop them further. As I look in on the board again I can already see that sentiment is changing, & the judgement & motives of the board being brought in to question. Good luck all. I believe we have a tremendous project here which to a fair extent we have so far collectively funded. And I cannot help but form the opinion that we, as shareholders, are being unfairly deprived of our investment.
(5 of 6 continued) I invested again at just above 3p, as I had taken the view that the company had driven the price down to these levels in order to re-finance by means of additional debt alongside a significant equity element, probably involving a strategic investor, & in the process significantly diluting retail Shareholders’ holdings in the company, which I was prepared for. I had not foreseen an outright takeover, by any measure a dreadful outcome for private investors.
Company statements indicating that the 5.5p offer was 34% above the previous day’s close are meaningless. 34% of what? – a share price which may have been run down & artificially held at such low levels in order to justify a subsequent equity investment or, in this case, takeover premium? As I saw one BB poster comment – the takeover price wouldn’t even cover the cost of the concrete which has so far gone in to the project. Let alone 10 years plus of planning & consent, 2 years plus construction, & a very valuable long-term asset tucked away underground. Now I have no idea whether that happens to be factually correct or not, but I wouldn’t be surprised if it turned out to be.
Current press comments musing that Anglo American have taken on quite a commitment here & with an uncertain future are, I believe, intended to soften up Sirius shareholders views of the offer. Encouraging them to see that the market for Poly4 just doesn’t exist in any meaningful size, & bringing the whole investment case in to question. I find it incredibly hard to comprehend that the management are not able to gain investment in the region of $600m to fund the next two years construction & massively de-risk the subsequent funding. The Qatari’s & Norwegians alone (who have taken up stakes at 15p & well above), could fund that & not even notice. Let alone 85,000 private investors, all desperately hoping that this amazing project can gain sufficient funding to keep that construction going & de-risk the remainder of the project. And yet we haven’t even been given an opportunity. Yes, I’m sure private investors would be very unlikely to come up with that amount, but I would be surprised if they couldn’t have put a decent dent in it. And along with the Qatari’s & Norwegians (who on the face of it are also losing massively on their investments if this deal goes through), & other investors, come up with the balance – especially involving an equity investment as we all know what would happen to the value of that were funding to be secured. Our investors would double their money overnight on any equity element. On the face of it, I would have thought that would have constituted a rather appealing investment opportunity……& yet we have no takers. (continued)
(4 of 6 continued) Taking the market cap down to such low levels would also carry the risk of a takeover by an uninvited predator. Hypothetically speaking, if there was a game plan all along for AA to launch a bid, then interest from an uninvited party would be very unwelcome. So how could we try to prevent such interest from progressing? Well, I imagine there are a number of ways that could be achieved. I have seen it happen in the past where a target company, seeking to protect itself, had a joint venture agreement with another, the terms of which made it impossible for an uninvited predator to take over the target. A so-called Poison Pill. I’m not saying for one minute that is the case here, but surely, it’s not something which could be ruled out. My hunch is that somewhere, tucked away, there could potentially be such a mechanism. Where would it be? Could it be tucked away within the terms of the Cibra Group Strategic Investment? Or within each of the offtake agreements? Or within the arrangement with Gina Rinehart? Who knows. But one would have thought that there could well be something somewhere in order to prevent the company falling in to hostile hands. If indeed that were to be the case, it would hardly be in the best interests of Shareholders, & would certainly not comply with the obligations of our CEO to act in Shareholders’ best interests! So maybe I am wrong. Would we be likely to ever hear about it? Probably not, because any company making an approach would either become aware of it during due diligence, or if engaged then bound by strict non-disclosure agreements & unable to disclose it. Of course, I could be completely wrong & barking up the wrong tree, but it does, nevertheless warrant some thought.
In order to gain approval for the current takeover from the Qataris or Gina Rinehart, it would not be beyond the realms of possibility to offer them favourable pricing on their future uptake agreement - & perhaps we would be none the wiser. (continued)
(continued, 3 of 6)
We also had the Daily Mail interview with our CEO on the 18th October in which, according to the interview, Chris Fraser made clear that he was not happy with the markets (& listing) & would consider taking the company private – something he later retracted. “Sirius Minerals could quit stock market says boss: 85,000 small investors braced for huge losses” read the headline. Certainly not a headline which would encourage anybody to buy shares in Sirius, & I would have thought could encourage others to sell out altogether. Then again, with the share price down around 3p – 3.5p perhaps we really wouldn’t want to encourage retail investors to buy up valuable shares. We would, hypothetically, after all have to hope that this price could be maintained for some weeks if perhaps we were to seek to justify a subsequent takeover at a ‘significant’ 34% premium! What do you think? Would it be plausible for an experienced CEO to accidentally let that slip during an interview with the National Press, & later retract it as being inaccurate? Really?? You would have to take your own view on that, but I know what I think.
Then we have the government, & the highly publicised fact that not even they would help out. That may well have been the case, but what also may be worth considering is that we do not know, & we may well never know, precisely what was put to the government as it is likely to be protected by non-disclosure agreements, & I doubt that the government, even if it wanted to, could disclose precisely what it was asked for. Just some supposition, but what if what it was asked for was unpalatable to the extent of not being able to go along with it? Easy to blame the government & Brexit for contributing to our demise. I may well be wrong, but we just don’t know the finer details of precisely what the government turned down. My personal view, for what it’s worth, is that just maybe, Sirius didn’t actually want government help at all. I appreciate I could be wrong! (continued)
(continued, 2 of 6)
When details of the Stage 2 financing package were announced last Summer I was relieved that a funding solution appeared to have been found & I took the view that the $500m Senior Secured Note offering should find takers. However, the more I subsequently looked at the structure of the agreement the more I became concerned that the whole thing had been structured in such a way as to have the potential to keep investors on board & invested, while at the same time providing a mechanism by which the final leg or legs of the downtrend could be (brutally) achieved. I became so convinced that this is what had been created, that I closed my long position (at a loss) & took out a sizeable short position in mid August. I held it & monitored news flow closely until the 13th September after the share price (I believe intentionally) spiked upwards during the course of 2 or 3 days, & I became too nervous (as anyone holding a short position would likely be). So I closed it , & four days later, on the 17th September, the company did precisely what I had thought it was going to do, & announced that the Senior Note offering had failed.
The share price was driven down to the 3p mark, & then the doom & gloom started. Not so overt as brokers issuing ‘sell’ advice as perhaps this would be just too obvious. But a constant stream of negative views from brokers & in the press, as to the potential failure of the company, & some drastically reduced share price targets. Some enormous trading volumes ensued & I imagine that many retail investors sold out at rock bottom levels in sheer panic, allowing anyone with a short position to close at very favourable levels indeed.
With the share price hovering around 3p, it is now too late for anybody to open a short, so views can be as pessimistic as desired & would only serve to persuade retail investors to dump their shares. There were certainly a lot of comments which would dissuade anyone from buying in. Could it be that perhaps we are now in the short-closing & accumulation phase? (continued)
A Personal Perspective
(I have re-posted on a common thread to keep the posts together & make it easier for anyone to read)
I have invested in equities for over 30 years now, both directly & via derivatives & have been watching Sirius for a few years. I never normally post on bulletin boards, but briefly look in on the lse board from time to time to see whether I may have missed anything.
Having watched how things have unfolded over the past year it is my personal view that all is not what it seems as far as Sirius is concerned, & that a complex & highly organised scheme has been in operation for a considerable time now, with the objective of us ending up in the situation we now find ourselves in.
I believe that there has been the intention, going back at least as far as September 2018 at the time when the $500m increased construction costs were disclosed for the project, of running the share price down while at the same time remaining very positive & doing it in such a way as to prevent excessive short interest (over & above what may be required by those involved in order to control the share price) from developing in the company.
My view is that this has been aided by the brokers, with numerous ratings being released with gradually reducing target share prices (but often far above the share price at the time) and invariably maintaining a ‘buy’ or ‘overweight’ rating. As a result, retail investors held on to the stock & many would not consider selling as they could always see a broker rating indicating ‘buy’ or ‘hold’, & a target price well in excess of the existing share price. Meanwhile, those involved had scope to sell in to the continuing retail demand, potentially through numerous non-disclosable short positions. A prime objective would be to avoid any significant ‘retail’ short interest developing, as when the end game is reached & the share price is on its knees there would be a lot of competition for cheap shares required by all those individuals wishing to close their shorts - & that would be most unhelpful.
Each time any negative news was released by the company, with resultant sudden downward movements in the share price (& in their own minds no point in retail investors selling as the price has already fallen – it’s too late!), it would be tempered by positive spin from the company, & a bountiful stream of positive distribution news regarding new offtake agreements. Nevertheless, this process being repeated a number of times would facilitate a dramatic reduction in the share price, all the while, & importantly, retaining the retail investors. ‘Oversubscribed’ placings would also help to create an impression of significant demand & thus help to allay retail investor fears. So important that they (the private investors) should remain invested…...at least at this stage. (continued)
(continued) There is a limit to what can be said on a forum such as this. I wish to stress that these are all my own personal views. I have seen no evidence to suggest that they are fact & do not seek to indicate otherwise. I accept that I could be completely wrong, but I have got to a stage with this where I felt compelled to put my thoughts in to writing. You would have to make your own minds up as to whether you think there is any mileage in this, or whether it simply constitutes the warped ramblings of a deluded old fool.
From what I have seen, I fully expect that there are those on this board who will seek to bury this post beneath hundreds of puerile or twisted comments. I don’t intend to become involved in further conversation or posting, rather to leave my views out there in the hope that someone perhaps sees them & are perhaps able to develop them further. As I look in on the board again I can already see that sentiment is changing, & the judgement & motives of the board being brought in to question. Good luck all. I believe we have a tremendous project here which to a fair extent we have so far collectively funded. And I cannot help but form the opinion that we, as shareholders, are being unfairly deprived of our investment.
(continued) I invested again at just above 3p, as I had taken the view that the company had driven the price down to these levels in order to re-finance by means of additional debt alongside a significant equity element, probably involving a strategic investor, & in the process significantly diluting retail Shareholders’ holdings in the company, which I was prepared for. I had not foreseen an outright takeover, by any measure a dreadful outcome for private investors.
Company statements indicating that the 5.5p offer was 34% above the previous day’s close are meaningless. 34% of what? – a share price which may have been run down & artificially held at such low levels in order to justify a subsequent equity investment or, in this case, takeover premium? As I saw one BB poster comment – the takeover price wouldn’t even cover the cost of the concrete which has so far gone in to the project. Let alone 10 years plus of planning & consent, 2 years plus construction, & a very valuable long-term asset tucked away underground. Now I have no idea whether that happens to be factually correct or not, but I wouldn’t be surprised if it turned out to be.
Current press comments musing that Anglo American have taken on quite a commitment here & with an uncertain future are, I believe, intended to soften up Sirius shareholders views of the offer. Encouraging them to see that the market for Poly4 just doesn’t exist in any meaningful size, & bringing the whole investment case in to question. I find it incredibly hard to comprehend that the management are not able to gain investment in the region of $600m to fund the next two years construction & massively de-risk the subsequent funding. The Qatari’s & Norwegians alone (who have taken up stakes at 15p & well above), could fund that & not even notice. Let alone 85,000 private investors, all desperately hoping that this amazing project can gain sufficient funding to keep that construction going & de-risk the remainder of the project. And yet we haven’t even been given an opportunity. Yes, I’m sure private investors would be very unlikely to come up with that amount, but I would be surprised if they couldn’t have put a decent dent in it. And along with the Qatari’s & Norwegians (who on the face of it are also losing massively on their investments if this deal goes through), & other investors, come up with the balance – especially involving an equity investment as we all know what would happen to the value of that were funding to be secured. Our investors would double their money overnight on any equity element. On the face of it, I would have thought that would have constituted a rather appealing investment opportunity……& yet we have no takers. (continued)
(continued) Taking the market cap down to such low levels would also carry the risk of a takeover by an uninvited predator. Hypothetically speaking, if there was a game plan all along for AA to launch a bid, then interest from an uninvited party would be very unwelcome. So how could we try to prevent such interest from progressing? Well, I imagine there are a number of ways that could be achieved. I have seen it happen in the past where a target company, seeking to protect itself, had a joint venture agreement with another, the terms of which made it impossible for an uninvited predator to take over the target. A so-called Poison Pill. I’m not saying for one minute that is the case here, but surely, it’s not something which could be ruled out. My hunch is that somewhere, tucked away, there could potentially be such a mechanism. Where would it be? Could it be tucked away within the terms of the Cibra Group Strategic Investment? Or within each of the offtake agreements? Or within the arrangement with Gina Rinehart? Who knows. But one would have thought that there could well be something somewhere in order to prevent the company falling in to hostile hands. If indeed that were to be the case, it would hardly be in the best interests of Shareholders, & would certainly not comply with the obligations of our CEO to act in Shareholders’ best interests! So maybe I am wrong. Would we be likely to ever hear about it? Probably not, because any company making an approach would either become aware of it during due diligence, or if engaged then bound by strict non-disclosure agreements & unable to disclose it. Of course, I could be completely wrong & barking up the wrong tree, but it does, nevertheless warrant some thought.
In order to gain approval for the current takeover from the Qataris or Gina Rinehart, it would not be beyond the realms of possibility to offer them favourable pricing on their future uptake agreement - & perhaps we would be none the wiser. (continued)
We also had the Daily Mail interview with our CEO on the 18th October in which, according to the interview, Chris Fraser made clear that he was not happy with the markets (& listing) & would consider taking the company private – something he later retracted. “Sirius Minerals could quit stock market says boss: 85,000 small investors braced for huge losses” read the headline. Certainly not a headline which would encourage anybody to buy shares in Sirius, & I would have thought could encourage others to sell out altogether. Then again, with the share price down around 3p – 3.5p perhaps we really wouldn’t want to encourage retail investors to buy up valuable shares. We would, hypothetically, after all have to hope that this price could be maintained for some weeks if perhaps we were to seek to justify a subsequent takeover at a ‘significant’ 34% premium! What do you think? Would it be plausible for an experienced CEO to accidentally let that slip during an interview with the National Press, & later retract it as being inaccurate? Really?? You would have to take your own view on that, but I know what I think.
Then we have the government, & the highly publicised fact that not even they would help out. That may well have been the case, but what also may be worth considering is that we do not know, & we may well never know, precisely what was put to the government as it is likely to be protected by non-disclosure agreements, & I doubt that the government, even if it wanted to, could disclose precisely what it was asked for. Just some supposition, but what if what it was asked for was unpalatable to the extent of not being able to go along with it? Easy to blame the government & Brexit for contributing to our demise. I may well be wrong, but we just don’t know the finer details of precisely what the government turned down. My personal view, for what it’s worth, is that just maybe, Sirius didn’t actually want government help at all. I appreciate I could be wrong!
When details of the Stage 2 financing package were announced last Summer I was relieved that a funding solution appeared to have been found & I took the view that the $500m Senior Secured Note offering should find takers. However, the more I subsequently looked at the structure of the agreement the more I became concerned that the whole thing had been structured in such a way as to have the potential to keep investors on board & invested, while at the same time providing a mechanism by which the final leg or legs of the downtrend could be (brutally) achieved. I became so convinced that this is what had been created, that I closed my long position (at a loss) & took out a sizeable short position in mid August. I held it & monitored news flow closely until the 13th September after the share price (I believe intentionally) spiked upwards during the course of 2 or 3 days, & I became too nervous (as anyone holding a short position would likely be). So I closed it , & four days later, on the 17th September, the company did precisely what I had thought it was going to do, & announced that the Senior Note offering had failed.
The share price was driven down to the 3p mark, & then the doom & gloom started. Not so overt as brokers issuing ‘sell’ advice as perhaps this would be just too obvious. But a constant stream of negative views from brokers & in the press, as to the potential failure of the company, & some drastically reduced share price targets. Some enormous trading volumes ensued & I imagine that many retail investors sold out at rock bottom levels in sheer panic, allowing anyone with a short position to close at very favourable levels indeed.
With the share price hovering around 3p, it is now too late for anybody to open a short, so views can be as pessimistic as desired & would only serve to persuade retail investors to dump their shares. There were certainly a lot of comments which would dissuade anyone from buying in. Could it be that perhaps we are now in the short-closing & accumulation phase?
A Personal Perspective
I have invested in equities for over 30 years now, both directly & via derivatives & have been watching Sirius for a few years. I never normally post on bulletin boards, but briefly look in on the lse board from time to time to see whether I may have missed anything.
Having watched how things have unfolded over the past year it is my personal view that all is not what it seems as far as Sirius is concerned, & that a complex & highly organised scheme has been in operation for a considerable time now, with the objective of us ending up in the situation we now find ourselves in.
I believe that there has been the intention, going back at least as far as September 2018 at the time when the $500m increased construction costs were disclosed for the project, of running the share price down while at the same time remaining very positive & doing it in such a way as to prevent excessive short interest (over & above what may be required by those involved in order to control the share price) from developing in the company.
My view is that this has been aided by the brokers, with numerous ratings being released with gradually reducing target share prices (but often far above the share price at the time) and invariably maintaining a ‘buy’ or ‘overweight’ rating. As a result, retail investors held on to the stock & many would not consider selling as they could always see a broker rating indicating ‘buy’ or ‘hold’, & a target price well in excess of the existing share price. Meanwhile, those involved had scope to sell in to the continuing retail demand, potentially through numerous non-disclosable short positions. A prime objective would be to avoid any significant ‘retail’ short interest developing, as when the end game is reached & the share price is on its knees there would be a lot of competition for cheap shares required by all those individuals wishing to close their shorts - & that would be most unhelpful.
Each time any negative news was released by the company, with resultant sudden downward movements in the share price (& in their own minds no point in retail investors selling as the price has already fallen – it’s too late!), it would be tempered by positive spin from the company, & a bountiful stream of positive distribution news regarding new offtake agreements. Nevertheless, this process being repeated a number of times would facilitate a dramatic reduction in the share price, all the while, & importantly, retaining the retail investors. ‘Oversubscribed’ placings would also help to create an impression of significant demand & thus help to allay retail investor fears. So important that they (the private investors) should remain invested…...at least at this stage. (continued)