Member Info for Tobin

the RNS is a must read. A looking like first production for next year. They have plenty of resource for now, and other lakes. the pricing is on a conservative NPV8, usually these projections are on an NPV10.

Strong financial results
§ Exceptional economics with estimated project post-tax NPV8 of A$479 million (pre-tax NPV8 of A$696 million) and post-tax IRR of 28% (pre-tax IRR 38%)

§ Steady state Project EBITDA of A$111 million annually and average annual after tax free cash flow of A$78 million (A$83 million during first 5 years)

§ Strong cash flows and low capital costs result in early payback period of 3.5 years

I still hold some shares in SXX, and if it recovers there could be a "10 bagger" rise from current SP.
But there is another company worth looking at with much better prospects of delivery whose SP has almost certainly been suppressed as a result.. Emmerson plc that has a very interesting project in Morocco.
This is an assessemnt by Shard Capital in March https://www.emmersonplc.com/wp-content/uploads/2019/03/Shard-Capital-EML-21-3-2019.pdf
Since then they have had offers of low cost loans from major bank, drilling and positive metalurgical reports that confirm the scoping study. And share price is down .. why ?? almost certainly the fallout from Sirius.
Could easily be a "20 bagger"...if that's a term!

I am sure you are right. some of the 80,000 PI who held Sirius may have picked up on Emmerson when it was in the main stream media last christmas and bought in, and with the tribulations of sirius may have sold out of the whole sector. With the otherwise positive news flow EML should be trading significantly higher.

There has been some political changes in Morocco in the last few days. This may have resulting in some selling. THe King has reduced the number of Ministers from 39 to 24. It looks like there has been an emphasis of career technocrates rather than politicians, the King urging his finance minister to "reform Morocco's unwieldy bureaucracy" .. or so Bloomberg reports.
https://www.bloomberg.com/news/articles/2019-10-09/morocco-king-shrinks-cabinet-targets-waste-in-nod-to-hard-times
From EMLs perspective I feel that this is hopefully going to be helpful. Aziz Rabbah, the Minister of Energy, Mines and Sustainable Development, stays in place. And as I opinionated before I think he is sounds a positive force. And the continuity should be helpful.
https://www.moroccoworldnews.com/2019/10/284306/moroccan-government-finalizes-cabinet-reshuffle/

Low trading volume but you would wonder why at these levels there are significantly more sales than buys. The company raised $2.5 million in July with a an oversubscribed placement at 3.75. You would have thought those city types who didnt get what they wanted in the placement would be lapping them up at this price as its nearly 10% less.
There has only been good news.
when the share price goes down it always makes you wonder if there is something out there that you don't know about but experience has told me it just the vagaries of the market.

I agree , I like the way EML is conducting business but I’m not expecting a big jump in share price with an RNS on JORC.. there’s enough resource already!

A detailed review of the investment case was done back in March. Highlighting the low cost of delivering MOP to key customers in Brazil compared to other producers. Well worth a read.
https://www.emmersonplc.com/wp-content/uploads/2019/03/Shard-Capital-EML-21-3-2019.pdf

May appear minor but mines use a lot of electricity for mining machines, conveyors, ventilation fans, as well as for the processing of the potash ore.
Good and developing infrastructure is important part of why this project looks attractive.

Hayden Locke is on record as stating estimated cost of delivering Kcl to customer is $162/t https://www.mining-journal.com/feasibility/partner-content/1366990/-more-than-50-of-the-cost-to-customer-is-not-in-mining-or-processing
We should know more as project proceeds.

Interview with Mark Thomas, a financial manager who has just produced a report on pin. https://vimeo.com/360757328

$360/t was the price at the time, September 2018
https://www.argusmedia.com/-/media/Files/sample-reports/argus-potash.ashx?la=en&hash=749DC8B7287C1F1C867F048A3119A7A40825A9B9
And Brazil is likely a main market. Also southern USA and Europe.
Potash price is lower at the moment but the question is what is the likely price over the next 20years and if you can predict commodity prices over that time frame then your wasting your time on this site!
The scoping document does give some indication of likely NPV10 with different pricing. What should play out with this project is that it is low cost.

To be honest I don’t know. I think it’s reasonably priced for what it is planning to do in the next year or so but I can see no logical reason why this company can not be much larger and increase output 5-10fold from what is planned. The resource and markets are there and there will be clear advantages to scale. Lower CAPEX and OPEX increasing profit margin on increasing tonnage, and refinancing etc. I can see the share price going up 5-10x over 5-10 years.

Just for those passing through..
the reason why EML looks very attractive is that the potash ore its looking to dig up is relatively shallow and there is no aquifer. This is a water filled layer of ground that must be usually frozen before it can be dug though with a shaft. This takes years and $$$.
Here the plan is a decline shaft with conveyors. High output low cost.
And then it’s well placed in Morocco with good infrastructure of roads, rail and ports to export or large local use.
All this adds up to low cost CAPEX and OPEX and hence good future profit.
There’s plenty more detail on the companies site.

One very likely exit for this company is to be sold to a bigger player when the licences and consents are sorted but before the big expense of building a mine.
It’s more than hinted at by Hayden Locke. The cash they have will take them most of the way on that journey, so potentially no more dilution and some stage the price will take off.

There are clear risks of share dilution with EML. Building mines and the processing plant is very expensive. This why it is attractive to borrow the money but then that does depend on the rate paid though when the mine is built these loans can be refinanced. That is why the announcement of indicative lending by a bank was significant. But that was only indicative. If the project progresses well then the lending criteria may look conservative.
Much of this is chicken and egg. If the share price goes up then it’s easier to finance with less share dilution. Why would share price go up?...because investors believe that the mine will get built with little dilution and pay a good dividend. But investors need to believe in the story.
Ultimately it’s the old adage that in the short term the market is a voting machine and in the long term a weighing machine.
Make you own assessment is the only way. Don’t be swayed by share price.. read a little Warren Buffett.

Nice summary though it didn’t mention the results of the metallurgical testing which IMO was one of the most important recent RNSs. It confirmed that they can extract KCl at a reasonable cost.
There are always risks in projects like this but the share price should have responded as the project has progressed over the past year, and important aspects derisked.
I have increased my holding.

The numbers look good, but imo it looks reasonably well priced at this stage for what is envisaged in terms of output. But there is clear opportunity to increase output across the lakes, and with scale should come lower costs, with production.. lower financing cost with resultant bigger operating margin and overall significantly bigger profits. Well that’s the hope.

NAV up 101p per share. And 92.7p of that is increase in valuation of equity rather than currency fluctuations.
Share price jumped this morning by 60p at the time of writing but this still means the discount has increased to over 20%.
Discount increasing because of over performance of the company verse it’s share price. No doubt this will be raised at the AGM next month. Sort of problem that many investment companies would love to have.
Biggest issue remains the US market and especially tech market that looks like bubble territory.

This is an interview Aziz Rabbah, minister over the mining sector; https://youtu.be/jZP--dBLb6w
He comes across as unarrogant. I think that’s important. A career politician in a North African country so I’m never sure if what you see her is really what you get but I am reassured.
Anyone know more?

The comments from the minister, and the progression of the permitting in a professional supportive approach by Moroccan government is very reassuring.