Member Info for southwesterner

Come on people wake up.

Look through the history of this guy; https://www.lse.co.uk/profiles/robinson2018

Ramping all the same shares as the crowd on twitter that I linked to yesterday that are frantically tweeting about AYM toda https://twitter.com/search?q=%23aym&src=typed_query&f=live

None of them have the faintest clue what this project is about. But frantically ramping it on twitter - and lots of shares changing hands, buys, sells, etc.

Then look at the RNS activity of all the companies they ramp from Robinson18's history here, or that other one that turned up a few days before. What do their activities all have in common? Placings and issurance of shares shortly before or after the ramping activity commenced.

This is a social media operation to shift these shares. Same as Stratton Oakmont, but they don't need to ring you up any more, they can just do it online!

Ok found it... https://twitter.com/andrewdylan100/status/1302559155241324545

The account that posted that has been ramping AYM since 2016... https://twitter.com/andrewdylan100/status/763707102485446656

Maybe even 2014... https://twitter.com/andrewdylan100/status/518785578704580609

And looking through the other accounts involved... @rick_shares, @Craigfish1984, @smacker_aim, etc. All blatant rampers day trading nonsense.

Have absolutely no idea what they are talking about. They dont have a clue. All they are interested in is ramping. No real value is going to be created in this share by this nonsense. Just volatility, ultimately ending up where it started, maybe suckering in some idiots to buy their shares if they get lucky.

Are you going to post a link to the alleged tweet? Is this a credible market participant or another blatant ramper like last time.

The last twitter ramping was on 20th May... and said a "JV" was "imminent", which Calmtrader then stated on here "is a big possibility and would send the SP soaring!"

And then of course absolutely nothing happened... and the SP fell back again, a few greedy PI's burnt and some rampers pocketed a few $, so pardon me for my skepticism.

"today - QME report likely very close and was held back to allow placees in - mates rates
10-12p on QME report"

If you'd read the placing RNS from last week you'd see that they now want to turn the QME report into a Scoping Study, and they expect to complete it "later this year". Given the QME optimisation study has taken 3x longer than the 7 months originally projected, and still no results - and now even the Annual Report has been delayed, anyone with even a cursory knowledge of this company's recent history would know that the end of this year means any time between then and 2022. 10-12p is pretty unlikely Im afraid, good luck with the ramping though.

"Why would anyone be interested in a mountain made of copper a few miles from a deep water port?"

The proximity of a port has a negligible effect on the economics of a modern metal mining operation. Even if the mine was at the most inland point in Wales, the cost of trucking the metal concentrate to the nearest port compared to Parys Mtn would be well under £1m / year, so totally immaterial to the overall economics of the project!

" Where this has the most impact is in the ground, as a lode has a volumetric size (length x width x height), the denser the material in it, the more tonnes of that material. In simple terms if you had a 10m x 10m x 10m block of tin, you would have 7200 tonnes of tin (and be rich), if it was tungsten you would have 19000 tonnes (and be very rich!)"

Not really true at all Cornishknocker, certainly not in terms of the "lode" as the tin and tungsten isn't in metal form in the ground, but in the form of cassiterite and wolframite. And their density is very similar, around 7t/m3. So whether you have a tin or tungsten deposit is basically irrelevant as you'd need the same volume of the mineral in the lode to achieve the same grade. The only difference worth noting is tungsten is slightly more valuable per tonne than tin currently, although there isn't much in it when concentrate processing costs are taken into account. (tungsten concentrate is chemically processed to ammonium paratungstate, an intermediate form of tungsten which can then be made into a carbide, whereas tin concentrate is smelted to tin metal).

And to reply to the chat that started this, I think some people have completely missed the point. Firstly, all given % "ore grades" in mining are weight based, none of them are volumetric, so forget volume, totally irrelevant. Secondly, the conversion of one "metal equivalent" to another is just a financial comparison used for illustrative purposes, to allow comparisons to be made between different polymetallic deposits, it has nothing to do with weights etc. Thirdly, there is no way Parys Mtn (Anglesey Mining) has a grade of 5% tin equivalent in the lower cut-off 10Mt resource, would be sub 1% tin equivalent, based on current metal pricing.

Oh, and if anyone is interested, this targeting of higher grade material first in the new scoping study should prove very effective, and by my calculations I'd expect significantly improved financial results from it. The extra upfront development costs of accessing the deeper high-tungsten material first will be massively offset by improved returns, and I'd expect significant improvements to the IRR from the proposed Study. Obviously the correct strategy for developing this deposit. They should get back in drilling around the high grade tungsten they found in late 2018 as soon as possible to bring it up to indicated resource, and see if there is any more of it. Most of the deposit is not worth bothering with, at least not initially, they need to be focussing in on the >1% tungsten mineralisation they found towards the end of the last drilling programme, because that is truly exceptional.

You're putting words in my mouth, I never said I was the greatest anything, I don't see why you need to go ad hominem when I'm just pointing out the facts. The simple reality is, it doesn't really matter who is the source of the delay, the point is simply that there is another delay with AYM's main project, and the timeframes AYM have set out towards delivering a plan to move it forwards. I agree completely that QME are very likely a big factor in the time its taken, and given AYM are not paying them in cash for their work as a customer, its difficult to speed things up. But that was always a possible consequence of the arrangements made. The "risk" for QME is just the time (and time is money, but we aren't talking about that much here) sunk into running the different models.

The risk for AYM though, is another 18 months have gone by and there's nothing to show for it yet - i.e. everything is taking too long. Another 18 months of not creating shareholder value, by not moving the project forwards. The problem is the attitude now has become another year or two won't hurt, seeing as we've been looking at this project for 20 years already! And that is going to be hugely offputting for any potential investors who want to see a project led by a management team who have a strategy and a timeline and want to execute on it. Thats the real crux of the matter.

"You are aware there has been a pandemic..QME’s and AYM could not visit Parys or have face to face meeting her for months and months"

I don't understand why shareholders would want to make up excuses like this for the chronic underperformance here.

Firstly, it was already over 8 months late (over double the initial timeframe) at the point the lockdown in the UK began. The Study was originally scheduled to be completed in June 2019.

And secondly, if you understood what the "optimisation study" actually is, you would realise it's a desktop exercise in optimising 3D block models, cost inputs, mining schedules and so on - basically all done on computer software. There's nothing to see on site, all the workings are deep underwater. The resource data is in a computer block model, not on Parys Mountain written into the stone in ancient scriptures. The only things to see on site are the shaft & headgear, which personally I dont see as particularly relevant, but even if they somehow were, once you've seen it and taken some photos & measurements, thats the site work covered basically. We're told they visited site early on in the process.

Finally, the rest of the world has been getting by with reduced "face-to-face" meetings. There is something called videoconferencing, amongst other options. Hundreds of scoping, optimisation and feasibility studies have been released on mining projects throughout the world, including in countries with Covid, in the past few months. Check out www.juniorminingnetwork.com for some newsflow (mainly TSX and gold/silver) - there are studies coming in every day. There seem to be some delays in physical things like processing drill assay results through laboratories, but actually there should be more time available for computer based modelling work, with some people working from home, like what we are waiting on here.

So.... draw your own conclusions... but this company has an unfortunate history of underdelivering on (fairly unambitious) targets - and I'd suggest this could just be a continuation of that, rather than a consequence of the pandemic.

The funds have been raised to "to allow production to restart in late 2021, with full commercial production expected within 24 months of Admission" (source; AIM Admission document). So its clear from this that a production decision has been made, without releasing to the market an economic study of any kind. Potential alarm bells ringing there. Obviously with the extremely high grades at this project, even with the low recovery from a gravity-only circuit (which should be improved on with flotation), and projected operating costs of $250/t, its clear that margins should be good, but there are risks in execution, particularly if its not clear what exactly is being executed.

So one question is, are there any plans to publish an economic assessment of any kind at any point during the development timeframe of the project, or will the projected financial performance of the project be known only in internal documents until production is achieved in "late 2021"?

Then the other key question leading on from the fact no economic study has been published, is the equity raising adequate to reach production? Is the current capital raised enough to commission the proposed mine and 300tpd processing plant? There is mention of an additional "modest working capital facility" - is this a nice to have to facilitate additional exploration, or is it essential to reach production?

Shouldn't the Annual Report be out today? Its always been the end of July in previous years. They will have to update on their progress in that surely.

End of November 2018 was when the QME agreement was signed, and the optimisation study was going to be completed for June 2019. Its August 2020 tomorrow. Running over a year late now, they've had over 20 months to run some scenarios with different cut-off grades basically. A couple of people could have easily done this job in 3 months on this full time.

"These Proactive Investors pieces are all very well, but what we really need is an RNS declaring that serious fundraising is underway to develop this baby. Or that, on the back of QME's revision of the mineral assets, Parys has been sold to a bigboy mining company." - Brentharg

I mean, to be clear, this project is not and will never be attractive to a "major" mining companies, so all the talk of Rio Tinto et al, is fantastical. Possibly a small or mid-tier mining company might be interested, but only if they can produce a much more impressive Scoping Study than any thus far.

"yesterday's story was hot off the press (16 June) rather than a rehash of something from weeks ago. Yesterday's story seemed to be encouraging in the high copper content of the Inferred resource category. As far as you know, was that previously stated?" - Brentharg

The proactiveinvestors article on 16 June was exactly the same as the one on 27 March, no changes whatsoever. Not sure why they released the same article with a different date, presumably trying to drum up interest.

" And Calmtrader has pointed out that there’s 4MT more ore than reported in 2017 - a massive rise on the previous 6MT." - Brentharg

There's the exact same amount of resource as there was in 2017, just they have looked at the possibility of extracting more of it. By extracting the inferred resources (which have limited value in terms of any future project financing). And by reducing the cutoff, which will reduce the ore grade, making economic outcomes worse, unless combined with reduced operating costs.

"The involvement of QME is a great boon: they’re hard-headed do-ers who would never have signed up to doing all this costly planning at their own expense only to stuff it in a dusty filing cabinet." - Brentharg

"QME must have very deep pockets if they've been hard at work over the last twelve months or close to twelve months without financial gain" - Suzki

Dealing with these points together. Yes, it's specialised work, and QME should be able to make very accurate locally relevant cost estimates at their disposal. But, this concept that they have made a huge investment in the project by running this optimisation process is fairly nonsensical. The cost to them is mainly the time of some of their engineers to run different models. If AYM had hired consultants to do all the work, it could run into maybe hundreds of thousands, but its not a massive investment for QME.

Hoping for any outcomes from QME to be announced in the near future, and I think that by including inferred resources, frontloading the project with the richer Engine Zone ore - economic outcomes will be significantly improved. My main concern is that the $48 cutoff they are using for stope shapes is way too low, and whilst it will increase mine life, it will reduce payback, and make the project weaker in low metal prices, which were two of the biggest faults with the last Scoping Study.

" I don't foresee QME report doing anything other than reiterate what we already know with perhaps the moving of some tonnage from inffered to actual." - Suzki

They aren't and can't do that. They aren't redoing the JORC resource statement. The resources now are exactly the same as they were in 2012 when they were first released, and the same as what they were in the 2017 study. What is changing is potentially how much of those resources are included in the mine plan, and what sequence they are mined in. The only way to change the classification (inferrred -> indicated) of resources is to conduct exploration drilling.

"Some of QME's work, I believe, centres around converting Inferred resource into Indicated (that may sound like a subtle nuance but financial backing is highly dependent on that distinction - what we're sure we've got as distinct from what we may well have)." - Brentharg

Again, same point as above.

"I may still table a formal Motion at this year's AGM for the liquidation of Parys Mountain with its NAV of c$50m. A cash injection of even half that would transform the share price of this £3m company." - Brentharg

I think I've said before, a NAV or NPV, in the mining world, does not translate to any value. There are too many variables with how it is calculated, what inputs are used in the calculation, the level of certainty in the study, project financing viability and execution risks. Parys Mountain isn't worth half of the NAV, its worth what someone is prepared to pay for it, probably £10m at the absolute most in the current economic environment, and probably considerably less. Also remember the £4m of debt that AYM has will have to repaid before shareholders see any cash.

"we are going to sit here another 20 years pondering feasibility studies, pre-feasibility studies, financial studies, environmental impact studies, a few more bore holes and the odd placing...... Nothing, we have the stuff in the ground, we have the assets, the ZINC, COPPER, LEAD, SILVER and GOLD are just waiting to be dug out, its time for Bill to step up or step down." - Divermike

No one is going to put up the massive capital costs, in the order of £50 million, to build the project, without a more detailed report than a Scoping Study.

"For years Parys Mountain was considered to be a copper mine with extra zinc, and then with the surge in zinc prices, the reverse. The higher copper concentration referred to in the Indicated category, plus buoyant copper prices, make it look again like a primarily copper mine." - Brentharg

Whilst it would be nicer in terms of selling the project to the market, to have a copper deposit rather than a zinc/lead deposit, the reality is its neither, its a multi-metal VMS deposit. Even including the ENTIRE inferred resource, the value of the zinc/lead is higher than that of the copper even at current prices.

Be careful what you wish for invest72! I'm happy to make a few comments on some of the recent posts, and hopefully recalibrate the somewhat unreasonable expectations and strange ideas/misinterpretations that are forming, somewhat similar to when the Scoping Study was in the process of being released...

The process going forwards is going to be an Optimisation Study by QME (now running over 12 months late, as per normal with AYM). The study will be run from the 2012 JORC resource statement - it doesn't change the actual JORC resources in any way at Parys Mountain. However by both changing the mine development cost inputs, mining the existing resources in a different sequence, at a different cutoff grade, and also by including inferred resources, they may be able to demonstrate a better economic outcome. But there are advantages and pitfalls from all these factors. Mining deeper resources earlier may frontload the cashflow, significantly improving payback/IRR - but it will also increase the capital costs. Mining at a lower cutoff grade may increase the mineable resource, thus lengthening the life of mine, but it will also reduce the grade, reducing profit per year, reducing payback/IRR.

The single biggest factor though is including inferred resources. This will definitely improve the economic outcome of the study dramatically, but it will be viewed unfavourably by any future financiers. If the viability of the mine plan is materially dependant on the inclusion of these inferred resources, they will need converting to indicated through additional exploration drilling. That will cost serious money. But of course, if the study is very favourable, raising such money for additional drilling may be possible.

To respond to some other points....

"If not i wonder if Anglesey Plc will be formed to do the jv and Anglesey Mining will retain the other assets like Grangesberg." - Jonesy80.

I think this entire argument was a red herring, the reference to "Anglesey Plc" by McParland, was clearly just short form for Anglesey Mining Plc. Why would you set up up another public company to be the holding company for a 70/30 joint venture. And why would the joint venture company, that can't even be formed until the mine is in production, update the market on the results of the current optimisation study.

"Any ideas on what the SP would be arpund, if QME take up there percentage and go into development with Anglesey on the Parys project? My views , QME take up their percentage and develop Parys or the asset gets sold...we should find out shortly.." - Chaingnam

Any JV would follow a Prefeasibility Study, unless the terms of the original agreement are changed. QME aren't just going to "take up" their percentage and go into development immediately. How would the £30m concentrator be financed? I doubt QME have £50m sitting around in spare change, or are likely to sink their own money into mine development with the rest of the project totally uncert

"There were two zinc mines in Ireland and the name of the second one, as you say, wasn’t Century. Embarrassing memory failure by me there."

Lisheen and Galmoy are the two zinc mines that are now closed - have been underground there, modern high grade operations. Galmoy was the smaller of the two, but even that was a lot bigger than Parys Mtns resource.

There is a third zinc mine still operating in Ireland called Tara which is absolutely colossal, the largest in Europe and definitely a top 10 zinc mine globally. Since 1977 its extracted over 85 million tonnes of ore @ 9% Zn/Pb. Still produces over 2 million tonnes a year - almost as much as is in the entire Parys resource, and it could go on for another decade or more.

"If QME’s optimisation plan leads to improved yield in metals and revenue will that make the task of raising money for the PFS easier?"

Yes, absolutely. The goal should be an improved IRR and NPV for the project though. Although those factors may have some correlation with overall yield and revenue, the big push needs to be increasing the grade in the early years when it makes the biggest positive contribution to payback.

"And once the PFS is done, what extra resource is needed to reach the final Feasibility Study? (If it ain’t glossy then it darn’ well oughtta be...)"

More money for a greater detail of engineering including more precise plans down to individual component specs for the processing plant for instance. And also quotes for the said equipment. On a mining technical level, a Definitive Feasibility Study (DFS) would be based on ore reserves formed from indicated resources only, and inferred resources would have to be excluded in a DFS. This doesn't suit AYM, as they have a lot of inferred resources, which would only be permissible at a PFS level. The idea is that before doing a DFS you would do further drilling to increase the certainty of your resources.

In Anglesey's case, I think its a case of doing a good enough PFS that the economics stack up convincingly without a full Feasibility Study, and attempting to finance the project based on the PFS. Plausibly the PFS could be completed in the 2nd Half of 2019 if they got on with it. A full Feasibility Study would probably delay by another 12 months. My gut feeling with this project is, if it stacks up convincingly in a PFS, it could get financing based on that. And if it doesn't stack up, it won't be progressed to a DFS. Glossy is too expensive, certainly at the moment...

The pathway I see is the mining optimisation study needs to have a significant positive effect on the project fundamentals, then the share price could easily double, and finance could be raised for a PFS. AYM need to be pushing for a PFS completion in 2019, not going back to idling along. They also need to deliver what they say on time though, unlike in the past.

(continued)....
AYM still need to raise finance for that, and they would commence the PFS following a positive mine optimisation process. "The Project Development and Co-operation Agreement with QME Mining Technical Services will see the completion of a substantial part of the recommended further work on mine planning and design" (AYM)
But that still leaves "more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which require new and further financing".

Still, this is a mine feasibility document, so suffice to say the mine planning and design optimisation should be the biggest "bang for buck" way of improving the results of the Scoping Study.

I'm actually confident that it can be substantially improved. Not just a feeling of confidence, but through some economic modelling of my own based on the information available in the Micon resource report; http://angleseymining.co.uk/projects/Micon_Parys_Mtn_Resources_20121128.pdf

The geological model which the analysis is based on has been the same since 2012 when it was published. What can change is the extraction method, the material to be extracted, and the sequencing of that.

The best economic results are obtained by mining the White Rock Zone (WRZ) at a higher cutoff to feed Years 1, 2 and 3 of production, whilst developing a decline to access the Engine Zone (EZ), potentially as early as during year 3 of production, certainly by year 4 then blending a mixture of EZ and WRZ - prioritizing EZ material as its accessed throughout years 5 and 6. And then potentially some Deep Engine Zone material in years 7, 8 and 9 will make the plan very attractive. Increasing the cutoff in the WRZ actually reduces mine life - if you make a conservative assumption that the lower grade residual parts of the WRZ cannot be extracted later, which they probably could be with appropriate backfill. The payback and IRR of this option is extremely attractive, far more so than the Scoping Study - and if QME figure this out and pursue this strategy, I am confident that Parys Mtn will be seen by the market as a viable project.

However, to confuse things, Bill H keeps floating this idea of accessing the EZ first through the Morris Shaft. I've pointed out before this is not viable. It doesn't make any sense, as most of the resource is below the shaft anyway so you'd have to put in a decline from below the shaft. You'd have to disassemble all your machinery, take it down a shaft, and rebuild it underground in a workshop. Ventilation would be a nightmare: compartmentalize the shaft, or ducting? And finally the nail in the coffin is that its in direct conflict with Regulation 48 of the Mines Regulations 2014 (UK). ie. Its not legal. It's a total non-starter. Maybe it would make sense using 1980 tech in South Africa or something, but not today.

Good to see the share price picking up, this indicates the market has growing confidence that some value can be realised from this project. No prizes for figuring out this growing confidence is mainly a result of QME's involvement. Nonetheless there is a long path ahead, and there are limitations to what QME can do - they can optimise the mining element of the Scoping Study, but they can't and won't produce a Feasibility Study or Pre-Feasibility Study alone, as that will need "more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which require new and further financing" (AYM half year report).

"Scale: Two mines in Ireland (Lisheen and Centuty), of similar scale, made good money before becoming "worked out". Parys, like Lisheen, is a relatively small mine and AYM's chairman reckons that Rio Tinto Zinc are unlikely to snap it up."

This definitely isn't true. Firstly, Century was one of the largest zinc mine in the world, and its in Australia. Lisheen was also large, certainly in the top 20 or so zinc mines globally. Lisheen produced as much zinc and lead concentrate in 6 months as Parys Mtn will produce over its entire mine life (as per Scoping Study). Parys is a small and fairly low-medium grade resource - but it does start very near to the surface and the orebody is wide and suitable to modern mining.

"Professionals: QME, an experienced and canny Irish mine developer, is putting in its own resources of maybe 0.5 or £1m."

Yeah I think they can see some potential to make money here. If they can prove that a simple mine plan that accesses the near surface White Rock Zone first but develops a decline rapidly to the Engine Zone can come up with significantly better results than the Scoping Study, they could be in line to get 30% of the mine for the mining development costs - which should not be very high - potentially well under 30% of the total costs of the project.

"Finance: It will take tens of millions to get this baby up and running. Financiers first require a glossy Feasibility Study before opening their chequebooks. This study, incorporating drilling results, anticipated mineral prices, extraction costs, concentration costs, shipping costs, smelting costs etc costs a pretty penny. If I understand correctly, QME, who are no fools, will get a third of the fruits if-and-when the metal begins to flow. The efforts of their enthusiastic young team will produce said glossy document. "

I think you misunderstand the planned process. As I said above, QME aren't going to produce a Feasibility Study, or PFS, glossy or otherwise. They are just optimising the mine plan and looking at different mine development options. Any Feasibility Study would have to include additional details on processing plant, tailings systems - and would likely cost £1m+. AYM still need to raise finance for that, and they would commence the PFS following a positive opt

This is very positive news for AYM and the Parys Mtn project, as it takes the onus away from AYM's inactive board to QME, to progress (part of) the project, and gives them (appropriate?) incentives to do so. More on that later.

QME are doers, not talkers. They're very active in modern mining operations, they do a lot of contract mining work, mainly on the southwest extension orebody at Tara which has been mined since 2009. Modern, highly productive, large scale mining.

Random note; Peter McParland was a Director of Minco, now spun into Buchans Resources, where John Kearney is also Chairman.

Everything points to this being a partner who is much more likely to get things done, which is what AYM desperately needed. This agreement seems to basically say:

1) QME complete mining studies (next 6 months, by June 2019) for free based on the incentive that they should get the future mining contracts
2) AYM commission PFS based on mining study results (timeframe?)
3) QME have an option to actually conduct the underground mine development at their expense, in return for 30% of project.

It's obviously point 2 that is the key weakness in the plan, as there is no timeframe for the PFS, and it involves AYM doing various additional programs, eg.

"The 2017 Scoping Study recommended further work as interim steps towards undertaking a PFS, including more detailed mine planning and design, more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which will require new and further financing."

So this QME agreement covers the mine planning & design sides of things - the main issue is who is going to do the metallurgical testwork, and enviro, planning, tailings stuff, and how that is it funded. AYM need some cash if they are going to do it, basically. Probably £500k would do, maybe a bit more to put the PFS together fully. That cash needs to be raised somehow.

Back to mining.... Bill H has this obsession with rehabilitating Morris Shaft and accessing the higher grade Engine Zone. He's even included it in this announcement and the agreement with QME that they need to investigate it. I'm far from convinced, to me this is still nonsense. It doesn't fit with modern mining methods, and everything QME is experienced with is modern decline based mining with trucks, scoops and so on. The strategy should be, mine the White Rock Zone (WRZ) at a high grade cutoff, whilst developing a decline down to the Engine Zone (EZ), then come back and paste backfill the WRZ so lower grade material can be extracted and blended with the EZ and deeper EZ. All from a spiral decline with modern mining machinery, just using the Morris shaft for ventilation return and pumping services. More later.

I don't want to pour cold water on this, given the current share price has done that already.

But that's mainly because the company have taken years to put out a weak Scoping Study lacking detail, which took way longer than it was supposed to, and then the company have done absolutely nothing to follow it up, despite saying they would.

You can't finance a mine with a Scoping Study like this unless it is absolutely bulletproof - ie. IRR >80%, <2 year payback, etc - based on metal prices below current levels. In the case of this project, its not, its a fairly low grade deposit with relatively high operating costs that only works in mid-high base metal pricing environments.

Anyway back to valuation. Firstly, the value of this project has absolutely nothing to do with the value of the metals in the ground. There are many mining projects with colossal resources of metal, that will never be extracted, so they are worthless. What matters is the returns, cashflow, etc that extraction of some or all of the in-ground metal can produce. The NPV, IRR, Capex, payback - are the main determinants of the potential market value of this project.

But that potential can only be realised if there is a plan, and the market thinks there is some chance of the project being forwarded. It's fairly clear with this BoD, that isnt the case.

If I had to take a guess what the market value of this project is were it to be sold in the current metal pricing environment, I'd say £5-15m, and probably towards the bottom end of that guidance.

I think this project is worth pursuing, some further drilling, metallurgical testwork, etc - feeding into a PFS. That could increase the value of the project, but it will require investment of some £1-2m. But clearly this company has no intention of doing that. So selling the project would be logical.

The problem with that theory is; Juno Limited own 33% of the company, and they are controlled by the Company Secretary, Danesh Varma. They also have £3.3m of debt, which they charge 10% interest on so that is increasing all the time, and they can demand repayment of with 12 months notice. The market cap of this company is £2.1m. If they demand repayment, existing shareholders (including them) would be diluted to less than 40% ownership of AYM. The point is owning 33% of the company, in combination with debts greater than the company's market capital, gives them practically total control of what happens. Private shareholders are irrelevant and have little influence on this decision in the current situation. Also the debt owed to Juno would have to be taken off the sale price of the project before anything could be returned to shareholders.

Polyhalite has gone from something that it was barely worth Boulby bothering with (according to CPL's MD, 2013) - to, I quote from ICL's Q2 2018 results, "an important pillar in the company's strategy is to grow the semi-speciality fertilizers business, mainly utilizing Polysulphate as a base for a product portfolio."

Their 2018 Strategy Presentation: http://www.icl-group.com/investors/icls-strategy-2018-israeli-investor-conference/

Has no less than 8 slides which mention Polysulphate. On Slides 23-25, it lays out that "Polysulphate is the Backbone of our Semi-Specialty Business" that goes "From One Mineral to A World of Value Added Products" and their "Target Growth in Semi-Specialty is from $100m to $400m in 5 years".

By next year they want to be producing SOP+Poly, NPK+Poly, PotashpluS and PKpluS, and Boulby will be profitable by 2020. I rather suspect they are underplaying their forecast sales and production levels in the nearer term, because they are still employing 500 people at Boulby? 500 people to extract 1Mt of polyhalite and some salt? Should be able to get out more than that.

It would be a shame if Sirius Minerals comes along and ruins their "semi-specialty" monopoly on Polyhalite by producing several million tonnes of it, processing it into pellets, and then selling it on so any NPK blender that cares to sign an offtake with Sirius, can sell a product the same as "an important pillar" in ICL's strategy, which is allowing it to "add value" to its potash and phosphate fertilizer production.

One can only wonder why they would want to sink this project if possible... if they maintained a monopoly on polyhalite it would be worth $billions in future sales. If Woodsmith Mine is built, they can still keep Boulby as it will probably have a lower production cost than Sirius's sales price, but it will wipe $billions off their selling prices for their "semi-specialty" products as virtually any fertiliser distributor that wants to be can be their competitor.

Myosotis, some great research. And I think, very significant.

I don't think the PotashpluS they are making in Cleveland is a big deal, because it just seems to be a 50:50 blend of MOP and granular Polyhalite.

Just the same as the Polyhalite they are selling in the form of granular 2-4mm chippings, as "Polysulphate".

But the key thing I remember from postings a while back was they were generating a lot of finer powdered Polyhalite from their crushing & screening process which they couldn't get rid of. The only thing you can do with that is granulate it!

Basically: Poly4.

But, ICL dont want to fork out (parent company don't have much capital available?) to build a granulation/pelletising plant at Boulby, so they are shipping the Polyhalite powder to Germany & the Netherlands now, and making:

https://www.iclfertilizers.com/browse/icl-pkplus-fertilizers

PKpluS - in a granulated form.

Note the difference: http://www.proctorsnpk.com/granular-v-granulated-fertiliser-the-big-show-down

So basically, this is like a complex NPK-style multi-nutrient blend. Essentially, exactly what Sirius Minerals say their product will be useful for.... and ICL have been denying for years....

So, skipping back to that article .... money for a hole in the ground, courtesy of Dan McCrum....

ICL chief finance officer Kobi Altma, in May: "this is going to be a solid niche product that will go into the specific crops organic fertiliser. So, it's important for the organic space"

3 months later, ICL are selling it in non-organic complex PK blends. I mean come on, he would have known about this when he made that statement....

They actually have a long history with the Sirius project and polyhalite of .... ummm, how shall I put it... being economical with the truth.... but this is a new record.

For those who can't remember.... back in 2013; https://www.ft.com/content/640bc488-a839-11e2-b031-00144feabdc0

CPL's (ICL UK subsidiary) MD said;

“While they are focusing on polyhalite that’s not what we are focusing on.”
"We were asked about the market for polyhalite. The market is incredibly slow and incredibly small.”

And then in 2015, David Zvida, again the MD of CPL (ICL UK) said;

“I do not see any economic justification to build a new mine only for polyhalite production . . . Polyhalite will be a niche market for the next 10 years,” and that Boulby expects to reach perhaps 600,000 tonnes a year (of polyhalite) in five to eight years.

Now here we are... just a couple of years later, Boulby is running on purely Polyhalite, a growing family of products are being made with Polyhalite, and they are planning on ramping up to 1Mt by 2020, and 3Mt in the longer term.

And Mr McCrum thinks their opinion on the matter in relation to Sirius is credible....?

You know what, even though he is a journalist, I very much doubt he is that stupid.

Calmtrader:
".interesting statement.as is the statement from the company that states,for the first time I might add, that finance is available .."

It states no such thing. There is a lot of waffle about "the development and financing of Parys Mountain in logical, sequential and parallel steps by undertaking the various optimisations studies and programmes" but at no point anywhere do they say they have achieved the financing for a PFS, never mind full development of the project.

Read it again. Here is the operative part:

AYM: "The 2017 Scoping Study recommended further work as interim steps towards undertaking a PFS, including more detailed mine planning and design, more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which will require new and further financing."

The fact is they haven't even started on implementing the recommendations of the Scoping Study which will require c£0.5m to move towards a PFS, and take about 6 months. They even specify "A preliminary proposal for additional laboratory test work, with an estimated cost of £100,000, has been obtained which requires representative samples of the ore which currently may not be available"

What are they waiting for?? Do they not even have £100,000 to do this? Its just an embarrassment.

Calmtrader: "It’s only recently that zinc and Copper have been high enough to make the mine viable prior to that the commodity space had been in a 5 year bear market..Financiers want to see that this recovery is not a flash in the pan and will then start lending again..(AYM are confident they can finance it)this is where we are and the next 18-24 months s/be very rewarding for those prepared to wait"

Absolute rubbish. Plenty of other projects have progressed in the period. The financing is not about building a mine, its about getting the money to progress the technical studies on to a PFS. AYM aren't confident they can even get the money to progress to a PFS, never mind build a mine, or they would obtained the money and completed the PFS over 6 months ago!

You are living in cloud cuckoo land, there is absolutely no basis for anything you are saying. Meanwhile, every prediction I have made about this company and their asset, including the specific stuff about the Scoping Study has proven accurate. Parys Mountain is a decent asset, there is nothing wrong with it. I believe its unquestionably worth progressing it to a PFS, doing further drilling, metallurgical testwork, and optimisation of the technical studies.

But I don't believe the project will progress sufficiently to ever reach a stage where it can be built, with the current approach and under the current BoD. Too slow, directionless, its taken them a year to decide they might start on the blindingly obvious (to a mining professional) recommendations from the Scoping Study, and they haven't even raised the money to do so yet.