Member Info for Tobin

Not much new otherwise would have been an RNS but Haydn talking through how government support will work, reassuring tones about good relationships with all levels of government, indicating in the interview that the on going works on the BFS still indicating that decline shaft is indeed feasible (important for low CAPEX); and BFS will be in first half of 2020. Then it’s mine licensing in the second half. https://m.youtube.com/watch?feature=youtu.be&v=weZuDPWOr5I

Always good if you can get 100% borrowing from the start; but I am not to concerned regarding share dilution so long as its done in the right way.
If I get to buy some more shares at a reduced price by holding gets diluted but the company has the money and I have more shares. When the mine is built it will make more profit because it is not paying out on the loans it didnt take, or it can then refinance and buy back shares for cancellation with profits or increased borrowing, or pay out dividends.
The problem is if I dont have the opportunity to buy shares at dilution. This happened recently. It was only a small dilution and small discount. I have seen much worse with SXX but companies should offer all share holders the same deal IMO.

Fastest TBM record was 172.4m in a day, over 25 years ago but that was unlined.
https://www.therobbinscompany.com/the-worlds-fastest-tbm/

The fact is the future is an uncertain place. Even though you can argue that we will always need fertiliser there maybe competition.
Salt Lake Potash that I also follow and have shares in will start producing SOP next year on the 1st of its lakes... and it’s got 9!
The opportunity to grow out of income is significantly less risk than what sirius is doing.

Thoughts on the RNS.
... one never likes to see dilution but this is small.. 12%, and expected. Lenders alway want to see shareholders with”skin in the game” and they have.
I thinks that what I find positive, directors and big shareholders close to the project are picking up extra shares.. yes it’s at a 10% discount but with recognition that that the dilution is likely to weaken SP slightly then I agree with Grant Thornton that it’s acceptable.
NPV is probably 4times present share price with production only a year away.
The opportunity then is to repeat this trick across the other 9 lakes it owns, refinance, and gain from scale. NPV in 5years???

Good to see PIN making a new all time high. Interesting that there was a SP jump one hour before an RNS of a director announcing a buy. Coincidence?
The buy was ultimately very small, but good to see.

So many classic quotes..

Everything has value, Benjamin Graham and the thrown away cigar with a couple of more puffs. There are reasons not to buy which is why people aren't. Schroders will be more than happy to down grade the investments, and blame Woodford. In this scenario there is very likely to to over selling and undervaluation. But picking the bottom is abit like picking a top... Not possible you have to start to step in and have b..ls of steel.
Though I have done this before the decision point is never easy. Experience tells me there isnt quite blood on the streets and there will be even more of capitulation yet.

SP down but NAV up.
at these discounts its on to keep watching... and maybe start buying.

Thanks for that. I like this bit:
"Whilst the EML investment case gets stronger, the disconnect between share price, underlying value and risk/reward balance remains stark."
file:///C:/Users/John/Downloads/Shard%20-%20EML%202-12-2019%20.pdf

The sandstone is strong, its a layer of marl that is isn't and exhibits "squeeze" properties that will need a special lining. Its not very thick but over the years has given boulby some problems. But it will not stop sirius getting down to the marl. If the lining method doesn't work it something we will hear about in a few years...

There are some knowledgeable commentators on this site; I would still appreciate any thoughts on EML and Salt Lake Potash projects.
Thanks

The valuation of SXX is still £250+ million, EML that is a potash project in Morocco has an estimated NPV10 of $1.8billion and a valuation off SP of £25million. One tenth that of SXX. SXX does have potential to return so much more but the risks are so high and so many; I still consider EML or Salt Lake Potash as better place to invest my money... though I do have a few shares in SXX.

I say super quick, but relatively.. the second grouted shaft that was meant to finish second actually was the first to finish because the process went so much better.

I have never felt that the shaft was a big risk. Of the two sunk at boulby the frozen shaft leaked but the second shaft that was grouted was finished in super quick time.
The Brine in the Sherwood aquifer is under very high pressure but the sandstone is quite dense and brine moves through the cracks that can be grouted. This is quite different from the sand formations in Canada that have to be frozen.

Looking at the RNS again it looks like the cost of producing SOP from MOP is $101/ton, and the "All sustaining FOB " price of MOP in the scoping study was $148/ton So break even costs for SOP about $250.

Hayden mentions the Salt Lake projects for SOP in Western Australia. The production price of SOP Lake Way looks at about $200/t https://www.investi.com.au/api/announcements/so4/31373420-4e8.pdf
But thats to port in Australia, EML is producing SOP next door to a huge fertilizer factory.
So Costs of SOP look comparable.
From the scoping study the CAPEX cost of MOP $500/t https://polaris.brighterir.com/public/emmerson_plc/news/rns/story/rmm119r
The CAPEX for SOP $500/ton https://www.rns-pdf.londonstockexchange.com/rns/4467U_1-2019-11-24.pdf
So CAPEX/ton SOP about $1000/t
Salt Lake Potash CAPEX/ton SOP A$1038, or about $700/ton. So Less CAPEX.
The amount of production is not dissimilar, and both have opportunity to produce more.
The Capitation of EML is only £25million, SO4 is £100million.
So just looking at the SOP story from another angle.. looks attractive.

Salt Lake Potash have a presentation out todat that looks relevant https://www.investi.com.au/api/announcements/so4/31373420-4e8.pdf
And they indicate that most SOP producers would be loss making at SOP price of $410/ton
Projecting from EML presentation it looks like their breakeven would be about $440/ton with a 10% discount rate.
https://www.rns-pdf.londonstockexchange.com/rns/4467U_1-2019-11-24.pdf

There is a difference in pricing. The Salt Lake are pricing at an FOB price ie at the docks, were as EML are pricing at USA. Maybe $40/ton difference.
Obviously Salt Lake potash look like could make profit on supplying SOP below $400/ton but their resource is ultimately limited. SOP is over $500/ton and $600/ton USA and morocco. Hence the interest.
But there are other SOP plays in the USA, and Sirius with its Poly4.

New Presentation on the website via RNS.
Most we know, the main think I take away is the opportunity for further developments with "cost synergies" ie more and bigger profits.
https://www.investi.com.au/api/announcements/so4/31373420-4e8.pdf

For those interested, assess the report via the RNS or link below.
https://link.****pit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=e70d3bc641c979d6c1afbf37393911c7&application_id=922279&site_id=webfg&application_name=news
The report notes the 18% discount to NAV , which is the current discount still on the 31/10 NAV, which it describes as anomalous.
Hopefully the Woodford Issue does not adversely affect PIN and the way that it operates.

As expected the strength of sterling at the end of October hit the NAV. Most of this looks like its in the SP as it has hardly moved sitting at 2300p.
The person who knows where sterling will be after the election and in the New Year will be very rich.