Member Info for wwguk

Steve Davies: "to see SM to gets into FTSE100 within next five years".
Very detailed analysis from multiple aspects!

Steve Davies of Jupiter Asset Management, one of Sirius' long term investors, gives his view on why Jupiter chose to invest in the company, and his hopes for the future.
https://www.youtube.com/watch?v=HiMYifnHfGs&feature=youtu.be

DanTheMan105: "On the 24th, the total voting rights went back up above 5%, thus triggering the RNS, as a result of about 0.1% being returned (shorts closed?). How does that look?"

DanTheMan105, Thanks, this of cause looks better (the more shorts closed the better:).

CGC contains Capital Research and Management Company (6.6042%), which has SMALLCAP World Fund ( 5.3350%) and other funds (1.2692%) which are not listed as their holding are smaller than 5%. Is this correct?

Or (cut-and-paste error correction):
The Capital Group Companies, Inc
contains
Capital Research and Management Company: 6.6042%
(which in turn) contains
SMALLCAP World Fund, Inc.: 5.3350%
and another fund(s) held the rest, i.e., 1.2692%

The form looks simple, but not easy to read.

Therefore, The Capital (i.e., The Capital Group Companies, Inc.) should hold 6.6042% of SM shares. Is this right?

Or:
The Capital Group Companies, Inc
contains
Capital Research and Management Company: 6.6042%
(which in turn) contains
SMALLCAP World Fund, Inc.: 5.3350%
and another fund(s) held the rest, i.e., 1.2692%

The form looks simple, but not easy to read.

Therefore, The Capital (i.e., The Capital Group Companies, Inc.) should hold 9.9392% of SM shares. Is this right?

On SM website:
The Capital Group Companies, Inc 461,945,148; 24/06/2019; 6.6042%

It seems that The Capital Group Companies, Inc. has 2 branches that have held SM shares and have shares on loan to others.

In the RNS:
Capital Research and Management Company: 6.6042%
SMALLCAP World Fund, Inc.: 5.3350%

Therefore, The Capital (i.e., The Capital Group Companies, Inc.) should hold 9.9392% of SM shares. Is this right?

Myo, if the first poly appears before the second tranche, the SM bond is very likely to be upgraded to BB rating at 5.27%. The cost (or interest rate) is almost the same or even lower than some investment grade debt (i.e., >=BBB), such as the commercial bank loans. When the construction is further de-risked and the bonds become safer, further bond tranches are very likely to be upgraded to investment grade bonds (i.e., progress from junk bond market to investment grade bond market) that more conservative IIs or fund managers, e.g., pension fund managers would feel safe enough to buy. I am not sure after SM has made more and more famous in the more flexible bond market and get bonds with a cost not higher than the bank loans, would they still be interested to refinance the whole debt into bank loans? Or they just simply continue along the JPM RCF backed corporate bond selling approach to the end (i.e., until the completion of the 10mtpa mine).

GK, Thanks for the info. The "10 Facts On The High Yield Bond Market" article reveals that on currently the U.S. h.y.bond market, many established famous companies are also raising money from the market. The h.y.bond is actually not as costly as many here have initially thought (e.g., c.10% to c.15%)

Based on the article,
“With the single-B index yielding just 7%, strong returns from high yield corporate debt would need to come from the lowest rated credits. The highest rated cohort of speculative grade debt, bonds rated BB, now yield just 5.27%”.

It would be great, if SM can sell the Initial Bond B rated tranche of SM at 7% and further tranches gradually move to BB rating at 5.27%, and then after the first poly or first production to refinance the whole rest of the needed funds with even better terms.

With $2. 175b (i.e., $1.35b + $0.825b) equity or equity like funding (or assets created from the funding) based the cushion (guarantee), and with JPM upto $3b overdraft facility as flexible funding source and backstop, the SM h.y.bond may be considered as better than average B rated bonds. Given the planned cost could be adjusted between 7% and 15%, a higher return and safer B rated bond should be easier to sell than many other B rated bonds. The excellent progress on marketing (TorP) and construction may further enhance potential y.h.bond purchasers' confidence.

https://seekingalpha.com/article/4225847-corporate-bond-market-getting-junkier
Is this the one mentioned in your post?

rights attached to SM, Capital is a Non-UK issuer

Is SM a Non-UK issuer of shares ? If yes, which country ?

See RNS:
1a. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached: Sirius Minerals plc
1b. Please indicate if the issuer is a non-UK issuer (please mark with an "X" if appropriate): Non-UK issuer

"The SBR is equipped with a roadheader boom and a rotating cutting drum – this allows the cutting of variable shaft diameters from eight to twelve metres. The boom is telescopic and allows for the excavation of the entire shaft crosssection with a depth of one metre in a single cycle. The SBR is suspended from ropes and is connected to winches on surface – as it descends, permanent shaft lining is inserted in sections from an upper working deck. A pneumatic conveying system lifts all excavated materials to sinking buckets that are hoisted to the surface."

https://im-mining.com/2019/06/21/sirius-minerals-engineers-germany-shaft-boring-roadheader-tests/

Its attached Jumbo Drill can be used to assess geology. As I understand, this means that the cutting head will be used if a soft layer is ahead; In case of very hard rocks, Jumbo Drill can be used to drill holes on the rocks and blast them into pieces so as to clear the way for the cutting head.

According to the AGM presentation, in 2019, SM will "Complete construction of main foreshafts to ENABLE
COMMENCEMENT of excavation of main shafts using shaftboring roadheaders". There is no target on how many meters the SBR should go. Any early installation and excavation of one of the shafts, for example a few meters or a few tens of meters, will exceed the milestones and allow the SBR to reach the first poly earlier.

More shorts covered on 19 June:
- LMR reduced its shorts from 0.51% to 0.45%;
- Polygon from 0.52% to 0.49%
The percentage of shorts taken by those over 0.5% has dropped to 4.48%

chilting and John, yes, LMR and BNP increased their shorts (i.e., borrowed and sold at 15.6p) on the 14th of June, and might contribute to the SP fall; LMR then bought at around 13.6p and 13.1p on the 18th and 19th (i.e., about a 2p difference) to return those shares. A quick gain in a few days.

LMR Partners LLP bought shares back yesterday and reduced their shorts from 0.60% to 0.51%;
and today they bought more and reduced their shorts from 0.51% to 0.45%.

As their shorts now are lower than 0.5%; they disappeared from the top shorter list.

LMR Partners LLP reduced their shorts from 0.60% to 0.51%
https://shorttracker.co.uk/company/GB00B0DG3H29/

https://www.ii.co.uk/analysis-commentary/when-sirius-minerals-shares-should-rebound-ii508318

The chart expert Alistair Strang (from Trends and Targets) on the 30th of May 2019 provided a close 13p target when the SM share price should rebound (this may correlate to the progress of the Initial bond sell). This level has nearly reached. Those selling at this level have to be careful. (see https://www.ii.co.uk/analysis-commentary/when-sirius-minerals-shares-should-rebound-ii508318)

GK, Liberum mentioned that SM is targeting June for the Initial $500m h.y.bonds. Therefore, it is reasonable to them to provide a conservative target (July), well before the hard deadline in the end of October.

With the 11.7mtpa TorPs, the marketing for a 10mtpa/13mtipa production has also de-risked, if the first polyhalite appears in March 2021 (i.e., the best case scenario of de-risking in construction), then SM may refinance in 2021 only after two tranches of $500m h.y.bonds (i.e., the Initial h.y.bond, and the first further h.y.bond tranche linked with RCF). The second limit set at 1b in the RCF will give SM some time and funding butter for them to get the refinance done by September 2021.