Member Info for Tobin

What matters here is the finance. But as an ex-SXX investor I am painfully aware that increases in the CAPEX costs are not taken well. As I have said before I hope the new CEO has learned the lessons from SXX and manages to lower costs, not the reverse.

https://audioboom.com/posts/7621578-onthemarket-salt-lake-potash-versarien-chris-bailey

Justin asking CEO about funding. It seems that they are burning cash and bank consortium note quite pulled together yet. But sounds like it is coming very soon. 2 of 4 banks on board and the other 2 taking it to their board in the next week or so. The question with debt funding is at what cost and with SLP raising funding from equity funding with ease should help keep the cost of debt funding down. In the long run the convertible placement may turn out to be quite positive.
It sounds like debt funding will be announced in the next few weeks.

Sorry.. SOP my other play

https://audioboom.com/posts/7621578-onthemarket-salt-lake-potash-versarien-chris-bailey

Justin asking CEO about funding. It seems that they are burning cash and bank consortium note quite pulled together yet. But sounds like it is coming very soon. 2 of 4 banks on board and the other 2 taking it to their board in the next week or so. The question with debt funding is at what cost and with SLP raising funding from equity funding with ease should help keep the cost of debt funding down. In the long run the convertible placement may turn out to be quite positive.
It sounds like debt funding will be announced in the next few weeks.

Charlie Munger quote
"“Waiting helps you as an investor and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”
I guess that is why Charlie and Warren have worked together for over 40 years.

Thanks SM, I think that is my reading of it. Of course that is a dilution in a company that is 10% bigger.
I had a look at equatorial resources and it is a company that is at the present tome trying to build an iron mine in the DRC, Democratic Republic of Congo, but not getting anywhere fast and has A$40 million in cash. It has obviously looked to use this cash elsewhere. Interestingly its shares are sitting at a discount to its cash and now discounted holdings in SLP!

Anyone understand what these convertible shares mean in terms of dilution effect??

I suspect people maybe suspecting that the reason that the buyback has been suspended is that the company has an inkling that the share price is close to NAV. If we are close to NAV that would be disapointing.

Still waiting. Difficult times I know, and many other ITs have not issued or suspended NAV updates, but it is times like these that you need updates. Even if it is to say we are not going to do an update until "such a date", would be helpful!

A link to the piece by the environmentalist Michael Shellenberger
://wattsupwiththat.com/wp-content/uploads/2020/06/Schellenberger-Apology.pdf
I am not entirely happy with the piece. Carbon dioxide levels are going up at pace. Coal is the main cause. I believe wind and solar have a big role to play in reducing carbon dioxide emissions but they are intensely variable and electricity is not easily storable at scale. (not enough pump storage capacity). So you need a back up and natural gas is the way to go. There are ways of making NG zero carbon, the Allam cycle looks very attractive.
And we should be looking at ways to reduce CO2 levels. Iron fertilization of the oceans is the best option but development of this was effectively blocked by enviromentalists with the London convention and protocol https://www.woi.economist.com/technofixing-the-climate-whos-in-charge/
Nuclear .. probably not big one off reactors but small modular designs like Rolls Royce are promoting, or Thorium cycle designs.

Some of the brokers may know or believe that there are some bigger sells in the market. Sometimes brokers will mark down all shares in a sector or the market because of what is happening more generally, or they believe may happen. Who knows. It is best not to look, and if you dont feel the story has changed then buy and be happy you can get more for less!

He certainly comes with experience but hopefully he has learned a few lessons from the SIrius minerals development.
The MTS (minerals transport system) was hugely over spec. With huge caverns for a series of Mine tunnelling machines. The number was reduced but they still went for a heavily lined tunnel that dramatically increased costs. This was quite different from the mining type tunnel initially envisaged. The extra costs are what seemed to unsettle investors and a downward spiral in share price and confidence resulted making raising funds impossible.
When the MTM started running it actually found the rock “better than anticipated”. The final plans are to have one MTM and that is arguably too big and too much and they should have used road headers/bolters which is what is now planned from the wordsmith mine.
But the damage was done.
Emmerson looks simple and low cost with a decline system but we need costs to go down and not up!

For those who missed previous discussion on North ASA. This is their 1st quarter report.
https://northenergy.no/investor-relations/financial-reports-calendar/quarterly-results/
As you can see at that time they were heavily in cash, Share price a huge discount to NAV. And their major share holding is TXP. At that time 23% of NAV.
TXP has gone up considerably since then to even with their selling the percentage of NAV that is TXP is going to be "north" of 30%. The make no mention of selling out of TXP :
"The Company’s ambition is to demonstrate value creation in the various investments. Full focus will remain on developing the portfolio in order to achieve positive long-term returns."
with most of there portfolio in cash it suggests they are going to buy more shares; but I suspect we are likely to see some selling by North ASA just to help keep some balance to their portfolio.
This has probably helped keep TXP share price down, but lets be clear, they are not selling because they have any concerns about TXP. You wouldnt have a portfolio that is essentially cash and TXP if you had great concerns in TXP; would you??

If it opens tomorrow at yesterdays close I will be adding to my position.

I have the same concerns. The Dx mine is very high grade but the costs are still very large and it is not clear how they are going to raise necessary funds. I have similar concerns With Emmerson. Salt Lake look like the lower risk play. Though I got dragged of a potash forum to have a look at TXP. That is equally good. But all these have very good stories, huge upsides. I am torn...

Its cost and cash flow, one of the video casts it is clear the geologist is simply gagging for 3D seismic. He has to get it past the finance director!

I think the figures are rather conservative. by December year end coho and cascadura should have delivered more like $60million and $90 million full year.
They have put down chinook as 1.5p NAV when if has 35-50% chance of success and success could be bigger than Cascadura. And no value on Cascadura deep when it was TXPs original target at Cascadura and they are going back to it.
the price was cf 18p a share when pumping 1800 boepd and now looking at 2 wells at Cascadura and Coho with 20,000 boepd and clear evidence that they are hitting major finds and have 20 other targets? Share price of £2 would not be over priced IMO.

I think the hydra blog could well predict what the market could do short term but the long term is a percentage play. 1 in 3 wells will likely be duds but we know there is hydrocarbon here and the company will get better and better at finding it.

Chinook is not connected to Cascadura. I guess it would be nice if it was in that it would be a huge pool but it’s not and if it was then they really don’t understand the geology which in the longer term would be a big negative.
The long term play here is that they understand the geology and are on a turbidite fairway and will make hit after hit ... but most wells will still be duds .. and that may mean chinook and Cascadura deep and even Royston. Doesn’t mean that the long play will not see mayor, mayor returns.

Thanks for the tip, I looked at Burford when they were targeted by a shorter. I recall I thought they were being maligned inappropriately.
But a couple of more tips.
For those with stomach for potash .. salt lake potash .. an SOP play were the CEO and chair have been buying in big and first product in a few months.
EML potash in Morocco, very low cost, great potential, ..just hope they dont have funding issues like sxx!
And TXP with big gas strike in Trinidad. Price more than doubled but the cash flow will increase 10 Fold within the year ( as much cash as capitalisation) and they have potential for many more big hits.
DYOR