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If the $600m comes in two parts: $300m strategy partner(s) and $300m (structured debt, i.e., convertible bond from Qatar like strategic investor), the dilution could be smaller than the above estimates (i.e., the convertible bonds could be set at a high converting price). Of course, if the share price moves high during the period, the raising price could also be a bit higher.

Cost: 0.2b (planning)+ 1.15b (st1)+0.425b (st2 share) + 0.6b (st2 initial)= $2.2b
(£1.72b at exchange rate $1.28/£1);

Current share count: 7.02b

Estimate 1 (cost per share): Supposed the share price at the raising (with a strategy partner) will be 3.8p, with a slight over 20% discount to have a raising price 3p per share. $600m = £469 at exchange rate 1.28; 469m/0.03 = 15.63b shares
total shares: 7.02b + 15.63b = 22.65b shares
Cost per share: £1.72b/22.65b = 7.6p per share

Estimate 2 (npv per share at discount rate 0.2):
new NPV is $11b to $13b, we take the lower one to estimate.
11b x 0.2 = $2.2b; i.e., the same as the total cost up to the end of the state 2 initial funding period, therefore,
7.6p per share.

Note that the above cost per share estimate has not taken the value of the mine and its product into account; and the npv per share estimate takes a 0.2 risk factor (i.e., have a funding path plan, but the funding path has not been materialized).

When the funding plan gets to an executable stage and when the project gets near to production, the estimate should grow with the progress significantly, so is the actual share price.

Cherokee101: on the Qarta sales agreement ... "Your view makes sense for Norges... but the Qataris are a different kettle.
1. They invested at 15p... and are still holding (weird for an institution)
2. They signed a ToP... with the knowledge we are going bust?
3. They have been seen on site"

It seems that the Qatar Muntajat sales agreement has not been explicitly mentioned as a ToP. The potential to have a joint venture for producing a Poly4+N product is interesting. The total amount of money for the Poly4 they are going to buy in the 10 year would be nearly enough to complete the mine. Qatar QIA was (and may be still) the largest institution investor of SM (with the shares and CB, and in case they still hold the CB). If there is white-knight of sovereign wealth fund type, it should be Qatar QIA (as Muntajat is also owned by the state and as Norges stake is quite small). CF once mentioned that Qatar may decide what they can do after some outcomes of the strategy review becoming clear. Good to know that "They have been seen on site", possibility for some discussion on what they can do. Gina has the largest stake, and therefore, should also be supportive. Best to have someone new involved, e.g., from some big business in China or Fortescue in Australia. Big MOP producers, such as BHP and Nutrien, seem unlikely, as they have more MOP capability then needed as this moment already, unless they believe there is a strong market for MOP+Poly4 mix then that of MOP alone. ICL probably just wants to sit there waiting for a chance for them to pick SM up (they invested very small amount money to switch to polyhalite and may spend a little more to become the largest polyhalite producer in the world; possibly just digging the poly seams towards the SM mine head area (the thicker poly seams) and increase their output gradually. If there are more than one party bidding for SM before admin, ICL may also join in the bid as if the SM mine is built, they may be out of the poly business (as they mentioned explicitly in the past).

Typo correction: if it is a part of an MM aggregated one --> should be --> if it is Not a part of an MM aggregated one

The buy/sell information provided by LSE and capita.moneyam looks different, i.e., a Buy as LSE could be a Sell at Capita, and vice versa.

The buy/sell information provided by LSE is determined by the closeness of the trading price to the bid or ask prices:
If the trading price is closer to the ask price, it is a Buy; otherwise, a Sell

The buy/sell indicator provided by capita.moneyam.com is based on the trade price in relation to the mid-market price at the time the trade is published:
If the trading price is above the mid-market price (at the time), it is a Buy; otherwise, a Sell

It seems that the info provided by LSE might be more accurate in relation to the single trade (if it is a part of an MM aggregated one) ; while the info provided by capita.moneyam indicating a very short term (minutes?) trend (i.e., moving up when it is a Buy; otherwise Sell).

Many have pointed out that such information is not accurate, only a rough indication.
Is the above a correct understanding?

As the platform for workers to stand and build the concrete liner was still there on the day the news reporter took the photo, the SBR must have not been lowered into the service shaft at the time. Some posters here had noticed that the SBR disappeared on the ground before the photo published, where it was then and where is it now? This might be something new on the construction update in the upcoming RNS. Although the funding paths are the most important issues at the moment, the progress update and plans on the deep shaft and long tunnel are also important.

Myo, thanks for identifying the similarity of the structure appearing in the two photos. This confirms that it is in the service shaft and the concrete form of the secondary liner had already completed at the time the photo was taken. The once unknown structure (at the time we first saw it in the photo provided by news reporter) is the platform on which workers stand to build the concrete form (the permanent secondary liner) bottom up using the vertical slip forming method.

Myo, as there is no rope on the platform to hang it from the top, the concrete form and working platform must be raised by means of hydraulic jacks attached on the built concrete liner along the way bottom up, is this right?

KOH: "No RNS effectively means no price sensitive information to communicate (either way). Looks like Fraser simply doesn't have much to tell us at the moment."

I agree with KOH. SM could have provided a RNS by the end of October, i.e., today with some construction updates and some progress in the strategy review, with the information new, but not particularly new, for example, on changes of plan/schedule, new cost estimates, options of funding sources/paths (i.e., strategy partners, infrastructure funding alternatives, still possible to have gov support, etc....) and construction updates (tunnel over a mile, cut the third TBM, the use the TBM conveyor for initial poly).

The fact that they decided to do it later, in a more positive thinking or wishing, could imply that they may have been working on something whose (tentative) outcomes could make the up coming RNS more (positive and) interesting.

Sirius is the brightest star in the night sky. Sirius appears bright because of its intrinsic luminosity and its proximity to the Solar System. https://en.wikipedia.org/wiki/Sirius

When no knowledge, no power, no control, people resort to various believes or even fortune tellers, who look at the stars for some hints: Sirius has two partners working together, and is close to a big bright power which makes it bright ... sounds promising ;-)

Sirius is a binary star system consisting of two white stars (Sirius A and Sirius B) orbiting each other, see
https://en.wikipedia.org/wiki/Sirius#Stellar_system

casa and myo, another important reference might the new NPV (to be updated) after the project plan (schedule and needed funding) is revised/updated. Based on what we saw in the past, the mc or sp could be estimated by applying (multiply) a risk factor to the new NPV or NPV per share. If the funding path is not clear enough, then the factor would be 0.2 or 0.3; if a clear funding path appears, the factor could be 0.4; and if the funding path is executable, then the factor could rise to 0.6. If there is no funding path at all (i.e., no strategy partner, no infrastructural funding, no bank project funding, no h.y.bond, no gov guarrantee), then mc approaching zero (i.e., administration, for ICL to pick the mine up); If the worst can be avoided, then SM will take ICL Boulby at the end. As Sirius is a twin star, the Woodsmith mine and Boulby mine will work/live together in one system at the end (with or without the existing SM shareholders).

JPM may still provide a RCF supported h.y.bond based fundraising; With the major funding for the more risky deep shafts and long tunnel raised from other sources, the potential bond purchasers could become more confident.

Such a new component-based multiple-source funding structure, when put together, would be much better than the previous ones (i.e., the bank group one and the JPM one).

Great ideas as described by Liberum to divide and conquer the risk associated with different components and to collect funds from different sources/investors:
- (high risk) deep shafts funded by a strategic/industry partner ($500m to reach the first poly);
- (medium risk) tunnel funded by a number of investors for "infrastructure finance";
- (low risk) funding needed for all the rest (non- or less-risky components) funded by h.y.bonds possibly partly guaranteed by IPA (as a cover offered in this way, the risk to tax payers' money will be very low)

With such an arrangement and fixed prices for all the elements, SM may get a better credit rating (BB) and the bonds would be much easier to sell. These really sounds plausible!

If so, we may soon find the big one in an RNS when its stake over 5% from the open market, in addition to the $400m worth of shares (originally taken by the new CB). This is an optimal path good for both the new partner and existing shareholders. This should not be a takeover; it is just a strategic or industry partner that takes 10 to 15% of the stake in SM.

SM ends the current h.y.bond solution so quickly (two weeks before the deadline); this is a bit strange. What you mentioned could be a possibility (as CF in the conference call mentioned some new sources; as the ones in Europe and U.S. would not sound that new). The quick return of the CB bonds may help SM save the shares for the partner to take as its stake in the company. JPM seems to be open for SM to reactivate the h.y.bond funding path (as indicated in the ft article). This may be a part of the Road and Belt initiative, supported by Chinese gov.

On reasons of the bond issuance failure:
- Market condition, reflected by (other) single B projects could be funded, is not there at the moment;
- On the project itself, the risk associated with the deep shafts was a concern (a negative point from the eye of bond investors); while marketing risk is not; Actually economics, product profit margin, TorPs were considered positive points.

On gov support, partner, the funding source (if capital market would be excluded):
- SM may still be able to discuss with gov on possible support;
- A partner (with a big balance sheet) may enhance the confidence of potential investors;
- Bond market will still be a significant funding source to be explored.

What to do in the next six months:
- re-look at development itself on how to optimize the development (to place the project in a stronger position for fundraising) ;
- re-look at how to address the risk/concerns of the potential capital providers (given a better understanding of their concerns);
- explore other avenue of capital sources that come forward as a result of the profile raising among the potential investors (through the roadshow, bond market visit, and investor engagement); and this may lead to an outcome of a funding pathway that is better than what SM had before.

The current plan of the SM/CF is to finding a strategic partner (gov or industry) to provide a guarantee or add confidence to the potential bond purchasers. Now, the gov has not agreed to take this role. SM is looking for others from the industry. Therefore, the JPM h.y.bond funding path has not fully closed yet.

Or, they may have to go back to previous commercial bank + IPA path.

Or, being (partly) acquired.

Mr Fraser said he still believed the UK government was supportive of the project even though it refused a fresh request last month to provide a loan guarantee.

“We made a very specific ask in a short period of time after we postponed the bond offering in August,” he said. “That didn’t work for them.”

“Does that mean we can’t go back to them and continue a dialogue? No. But at the current time they weren’t able to provide the support we asked for.”

Sirius is now pinning its hopes on finding a strategic partner to a stake in the project. According to Mr Fraser that would allow the company to issue a bond and ultimately secure the funding necessary to complete the Woodsmith mine from US bank JPMorgan.

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https://www.ft.com/content/8dcc8fbe-d938-11e9-8f9b-77216ebe1f17

exposure to the project. Han**** has invested in Sirius in return for a royalty on production.

“They are comfortable with their investment and supportive of the strategy,” said Mr Fraser. “And it is fair to say the debt providers do not view Han**** as fitting the category of a strategic partner.”

Mr Fraser said a sovereign wealth fund, a potash producer like EuroChem, or a big mining group like BHP would be acceptable partners.

The Qatar Investment Authority, which backed an equity fundraising by Sirius earlier this year, owns more than 3 per cent of the company.

In spite of the latest setback, Mr Fraser said he was confident the mine, scheduled to start production in 2021, would be developed.

“As a company we have come through incredible challenges to get where we are today. Obviously this is another one. We have to adapt and evolve,” he said

“We’ve been in these situations before and we are confident we will get through.”

https://www.ft.com/content/8dcc8fbe-d938-11e9-8f9b-77216ebe1f17