Member Info for Vyrnwy

KOH -" But this treatment applies to existing mines, not sure if Woodsmith is currently considered a mine from the accounting point of view considering the early stage of development..."
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Yes, it is a mine from an accounting point of view. The company's business is to exploit and recover an underground resource and no other. The mine is in the course of construction. Accounting for the development is straightforward insofar as certain development expenditures may be capitalized and write off deferred until the physical extraction of the mineral resource commences when those development expenditures will be depreciated over their useful lives. However a value of the mineral resource itself will not be recognized on the balance sheet. The potential value of such resource will only be relevant fundraising purposes.

Strab
The bond market is only concerned with the risk associated with the company as its not related to any other corporate.
Sirius' bond rating in the summer was 'junk'. Since then it has had to redeem $400m convertibles due to the 'Debt Non-Occurrence Event 'in September which hasn't helped its market standing. Moreover, it's been relegated from the FTSE250 to the FTSESmall Cap, with a market cap of £215m and to raise $500m via bonds now would be the equivalent of almost twice its current market value. For those reasons, going back to the bond market is a non-starter IMO.

A guaranteed bond is only possible when the corporate seeking the funds is related to the guarantor (parent/subsidiary relationship) or is in a joint venture.

In my view, this is going to need a major restructure if all paths to direct fundraising are blocked and time is running short.
That means direct investment from a third party and significant share dilution if successful. Another $250m from Gina Reinhardt on similar terms as earlier in the year is not going to get the project much further advanced.
The shafts must sink to the floor of the mine (c1600m from the surface). They had reached 118 mid Sep just prior to the SBR installation. The TBM will have completed its target of about 3km of a total of 37km by the end of this calendar year.
The original target completion of the shafts was and the tunnel was 2022.

mcadder - yes, unsurprisingly, there is a bit of 'kite flying' on this message board.

POSTI - the market has valued this stock. Investors would be falling over themselves in droves if they thought it was heavily undervalued at this stage; yet they aren't. Quite the opposite. Even the house broker slashed its forward price forecast from 40p to 9p on the news that the bond issue was to be pulled. The rationale for the price is simple. The project needs a massive capital injection to complete and it will take about 2 years to do so. It doesn't have anything like those funds and it certainly doesn't have that amount of time.
So what next? Where does it find that amount of capital? The capital markets are closed off in my view - no placing possible and no bond issue. Realistically, if the project is to continue on track, the company needs to be taken over by a major mining group with room on that white night's balance sheet to provide the capital and there aren't many of those around at the moment. How much is the total funding requirement? As of September 2018, is was $4.2 billion. That's 5.9 billion Australian Dollars. The borrowings on Han**** Prospecting's balance sheet at September 2018 (Gina Rhinehard's mining group) was 7 billion Australian dollars and its total equity was just under 10 billion Australian dollars. Do you see the issue?
The scale of the Sirius project matches its capital requirement - it's enormous - and from where I'm sitting, I just don't see from where that source of new funding will emerge.

I regret to see the company's market cap is c£189m which will see it lose its place in the FTSE250.
I have been a holder here and lost £10k back in August when I sold out after the first announcement that they couldn't get the bonds away. I was hoping then for the sake of long term holders and employees that perhaps they would have more success in September but having lost £40k eleven years ago on to a share I held on to when I should have seen the writing on the wall (it was sold to cover its bank debts with shareholder wipeout) I couldn't take a risk here. even though Sirius is debt-free.
The issue here isn't current debt. It's one of the risks attached to raising tranches of long term funding to produce some very expensive infrastructure in order to bring a business into production, all at a time of global trading uncertainty and decline.
I have to say that given these conditions, the market does not think there is any possibility that further funding will be raised by Sirius - the SP is the arbiter in these matters and it has lost about 90% of its value in less than 12 months and whether some individuals get excited when they see shares in the millions being bought, for every share bought in the market, a share has to be sold in the market.
Since the company has no earnings and internal cash-generating capability at this stage of its development, my interpretation of the SP decline is that the market's view is that the only hope of avoiding inevitable liquidation will be to seek a partner with a big balance sheet to take the project over. That said, would such a partner be prepared to take on such risk itself, disturbing its own plans and budgets with impacts to its own balance sheet notwithstanding the potentially high returns here?
Whether such a partner comes forward in the months to come or not, there will be significant consequences for shareholders who are nursing paper losses at the present time and I sincerely hope they will not be to the same extent that I experienced with that other share all those years ago - total wipeout.
Good luck.

dadean "Had a daft thought, if we got wiped out, God forbid, wonder if sirius would give us back our investment in polyhalite, I think I could shift a few hundred tons".
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Circular reasoning.

If there is one lesson that investors should take on board it is that the market does not like uncertainty. This company, no matter what its strengths and opportunities, is a prime example of that fundamental principle in action.
This BoD has revised its funding requirements and strategy several times. Its latest strategy has been to halt the fund-rasing process and HOPE for a change in sentiment in the bond market.
This BoD has overseen a 25% discount on its placing just a couple of months ago and those buyers have seen a 40% fall in the value of their investment since then. That is the market's verdict on the veil of uncertainty the BoD has put over the company by the execution of its plans.

wwguk. Hopefully, you say. The one thing the market detests is uncertainty. That is why the share price is where it is. Keeping their fingers crossed is a poor strategy that the BoD has been forced to adopt as the SP reminds everyone and has been doing so for the past 12 months.

LostInTheCasino. There are a couple of small matters. 1. The company wants to raise those funds in US Dollars and in blocks. 2. What would be the market for selling on those retail bonds after issue? 3. What would happen to the credibility of the BoD in the financial markets?

Mars - Please define "Proper media campaign" and the target audience?

avocet123 Unless and until the company defaults on the payment of its financial obligations as they fall due, a contractor or employee is legally obliged to fulfill their contractual obligations. The fact that an SBR has been delivered is proof of nothing other than contracted obligations continue to be executed. There is nothing to be read into it. Also, I suspect that ownership of the SBR is with the contractor and Sirius has simply contracted for the shafts and tunnel to be excavated. The winding gear on the other hand would be Sirius owned plant upon payment.

Myosotis: "Regardless of the above, it is shameful that the biggest mining project seen in decades, is not getting the exposure it is due. " Did you make that accusation at any other time in the last couple of years or were in solitary confinement in that time? Have you missed the conference calls of CF at the quarter-end announcements? Did you not read the company's RNS announcements or the commentary of the house broker or the financial press? Have you not seen the company's website or its promotions in every social media platform?

The FT reported that CF had spoken at the TBN launch at Wilton on Friday saying that Sirius was making good progress in securing the $3bn debt financing and was pretty confident they will get there. He is reported to have added that the new proposal being worked on is a capital markets led structure .... rather than bank-led project finance and a balance sheet could be built that transfers nicely out of being a project into an operating company. In my opinion, he believes this option lends to greater flexibility without significant time constraint of a bank-led change process and that this is the preferred route.

laurenlouise asks: "why would a financial institution lend us money at this point?........they can see that we will run out of cash in the very near future so why lend to a going concern when they could pick up the pieces for a fraction in a couple of months..?"

You do realise that there are other runners in the race to provide St2 finance for the project - that is a consortium of established banks. Also, do you think for one moment that the Government backed IPA guarantee wouldn't be forthcoming? Therefore why on Earth should you think that the Company will run out cash at the end of Q2 and have no fall-back position such that any value already created was lost? Do you seriously think that Gina Rhinehart / Hancock Prospecting Pty, who are heavily invested via a Royalty drawdown would allow that value to fall into the hands of predators and allow them "pick it up up the pieces for a fraction ..." (your words)?

laurenlouise asks: "why would a financial institution lend us money at this point?........they can see that we will run out of cash in the very near future so why lend to a going concern when they could pick up the pieces for a fraction in a couple of months..?"

You do realise that there are other runners in the race to provide finance for the project, that is a consortium of established banks. Also, do you think for one moment that the Government backed IPA guarantee wouldn't be forthcoming? Therefore why on Earth should you think that the Company will run out cash at the end of Q2 and have no fall-back position such that any value already created was lost? Do you seriously think that Gina Rhinehart / Hancock Prospecting Pty, who are heavily invested via a Royalty drawdown would allow that value to fall into the hands of predators and allow them "pick it up up the pieces for a fraction ..." (your words)?

Another hot, cold hot, cold article from MF today, authored this time by Rupert Hargreaves discussing current financing requirements and ending: "So, after considering all of the above, I think the future for Sirius Minerals share price is binary."
Well thank you for your scintillating analysis that share prices move up and down but if that is that is all you have, I'd rather watch some paint dry on a wall, or look at the hour hand pass in the course of an afternoon or follow the tedious Brexit debate on the Parliament channel.

Amounts per my previous post should be USD, the reporting currency not £. All other comments apply.

So ....
No fixed assets (all reclassified)
Net Current Assets $3.66m
Net Current Liabilities $4.12m
Equity Holders - $0.46m (NEGATIVE)

Guidedog
No there aren't 43 pages to get through unless you want to continue to fail to see the wood for the trees:

Page 1 Review of operations
The group sought to sell down its assets and settle the debts due. The Group is now seeking to wind up its operations.

Page 4 - Consolidated Statement of Financial Position
All non- current assets have been reclassified as current (not prepared on a going concern basis - since decisiion made to cease to trade.

Page 8 - Audit Report - Emphasis of Matter - Going Concern
Going Concern basis of reporting not appropriate for reasons stated by the directors.

Page 19 GOING CONCERN
The company made the decision to cease trading effective from the date of repayment of the loan (July 2018) and to wind down its operations.

Page 13 - Statement of Financial Position
So the position as 31 Dec was

No fixed assets (all reclassified)
Net Current Assets £3.66m
Net Current Liabilities £4.12M
Equity Negative -£0.46m

Smidsy - Is that your only comment .... do you really need an answer to your question?

Will be available in 5 days.

I eagerly await them - for dissection!

Two filings being processed today (18/9/2018) report as follows:

Termination of appointment of Rita Fern Whittington as a director on 31 July 2018
Termination of appointment of Derec Lane Norman as a director on 31 July 2018