Member Info for wwguk

With its Cutting-edge at the bottom, the shaft sinking using Vertical Shaft Sinking Machine (“VSM”) is really a shaft sinking process - the shaft wall sinks gradually by gravity and the push from the top. The previous record of such sinking with the VSM was 84m; while the VSM broke the record to a depth of 115.2m at the SM main shaft site.

For very deep shafts, such as the three (especially the service and production shafts) currently under construction, sinking may not work or may be difficult to handle when a certain depth has reached or at certain geological layers.

I have heard a few methods to handle such difficulties:
1. having the out side of the shaft wall frozen so as to better hold the wall,
2. having some horizontal bars at some solid layers,
3. dividing a shaft into multiple towers, with wider base to support each of the towers separately (at relatively solid layers),
4. according to the conditions at different layers, some towers to be built top-down (digging and wall building hand in hand), and some others bottom-up (digging more and then building the section of the wall),
5. ... (to be added by anyone, please, especially on how to handle the unexpected sinking due to gravity, or the wall not kept vertical slightly or progressively, ...)

The contingency report has NOT singled out of the deep shaft sinking as a special risk (possibly due to the good design by taking the lessons learnt from the nearby Boulby mine). However, it did mention that some clarification is needed to make it clearer on how the wall building will be handled using the SBR at each of the geological layers (although the design of the wall at different layers are fine).

CF mentioned that the upcoming Hight Yield Bonds would be "Single B rated". Such bonds are high risk and high returned ones, also referred to as "non-investment-grade" or "junk" bonds. SM's high yield bonds will be senior secured guaranteed bonds, that are guaranteed by SM (with its half built mine and any unused money raised from placing and convertible bonds), and are senior and more secure than equity and guaranteed convertible bonds. Liberum recently mentioned that "the company is guiding towards an expected B rating and c.10% coupon".

Due to the fact that
1) there were already $1.35b funds raised before it, i.e. as its cushion,
2) there will be $2.5b (RCF) senior debt to follow, that will ensure the SM have
- $1.546b contingency ($1bn from the RCF mechanism above the planned $546m P80 contingency) to address any unexpected issues in the construction of the deep shafts and long tunnel,
- enough funds to complete 10mtpa mine,
3) both the bond tranches and the RCF are to be managed by JPM, and
4) the RCF is underwritten by JPM.
the danger or risk of this initial $500m Hight Yield Bond might not be as high as its single B rating indicates.

Given the above and its (up to 15%) high interest, the chance of the successful issuance of this $500m bonds should be very high.

After the successful issuance of this first $500m tranche and the appearance of the fist polyhalite in 2021, the subsequent tranches of the SM bonds may be issued at a higher rating and with lower cost, e.g., from B to BB/Ba1, and then to BBB/Baa3.

See below for more info on single b rating:

"Investors typically group bond ratings into 2 major categories: Investment-grade refers to bonds rated Baa3/BBB- or better. High-yield (also referred to as "non-investment-grade" or "junk" bonds) pertains to bonds rated Ba1/BB+ and lower." (Fidelity)

"Having more letters in the rating is generally better than fewer letters, and being earlier in the alphabet indicates higher quality. For Standard and Poor's, AAA is the best rating, followed by AA, A, BBB, BB, B, CCC, CC, and C. D is used for bonds that are already in default. Fitch's ratings are similar to S&P." (https://www.fool.com/knowledge-center/what-is-a-bond-rating.aspx)

Only Jane Lodge (Non-executive director) brought 100,000 shares on the open market on 24 May 2019 at an average price of 15.48p.

All others brought their shares either in their basic entitlement or in the excess facility at the standard OO price 15p. It must have been an error in many places on director share dealings with a price 15.48p listed (including those brought by Elizabeth Noel Harwerth (Senior Independent Director).

Russell Scrimshaw (RS), the board chair, bought the largest number of shares using his own money. In past few years, he brought tens of millions at (2m)15p, (lotsOfM)25p, (2m)18.5p, (2m)11.75p, (1.6m)12p, (3m)21.49p, (18.8m) 18p, (1m)23.65p. I.e., most of his 45m was brought using his own money. This shows his significant confidence and commitment to the company.

Christopher Catlow, the previous board chair, sold the largest number of shares among all individual shareholders (a large part of his over 100m holdings). One of his observable contribution is to have RS into the board and then replaced himself.

https://www.proactiveinvestors.co.uk/LON:SXX/Sirius-Minerals-PLC/financials/
Directors dealings

SIGNIFICANT SHAREHOLDERS
--------------------------------------------------
Jupiter: 327,719,269* 6.97%
Capital: 461,945,148 6.62%
Pelham: 353,589,292 5.07%
Qatar: 230,282,070 3.30%
Norges Bank: 166,000,000 2.38%*

CF: 123,747,368 1.77%
RS: 45,645,005 0.65%
--------------------------------------------------
26.76%

* to be updated; not listed include many IIs and big PIs with less than 3%

Myo: " ... 2. Bond announced and Prospectus released ..., 3. Offer Period"

As we had experienced (the accelerated one day book-building process) in stage 2 New Convertible Bonds, the formal and open offer period, or the duration between the "offer announcement and Prospectus release" and the completion, could be very brief; While the informal contact and negotiation (including roadshow and discussion) may take much more time. Obviously, SM is still in this informal contact and negotiation period.

Liberum said that SM is targeting to complete this in June, given their past record on targeting date by Liberum, let's assume this may be in June, July, or August the latest. SM did have a few deadline/targeted dates missed out, but they had finally kept their promise to release the formal alternative proposal before the end of April, actually on the last day of April. They may offer an update or provide another estimate/targeted date on the h.y. bonds in the upcoming GM.

Cranleigh and Thornback, thanks for pointing out the errors in my post.
The CFO's additional 200,000 shares came from the number in my previous post based on what I found in the prospectus. I should have checked the numbers before posting. The following is a comparison between their (i.e., RS and TS) initial personal OO intention as listed in the prospectus and the results reported in the latest RNS (which indicate they both got some additional shares above their basic 1/22 entitlement):

On page 249 of the prospectus:
Name ........................Shares before Shares after the OO;
Russell Scrimshaw ............. 43,523,979 45,502,342
Thomas Staley .................. 1,133,713 1,394,336

on 29 May 2019 RNS:
Russell Scrimshaw ............. 43,523,979 45,645,005
Thomas Staley .................. 1,133,713 1,187,139

RS got 142663 additional shares above the basic entitlement as shown in the RNS; while as shown in the prospectus he would only get the basic entitlement.

TS got 1893 additional shares above his basic entitlement, much less than he might have applied for (i.e., over 200000 as indicated in the prospectus).

The CFO got over 200000 shares in the excess part of the OO, this may also be considered as inside buy.

Athough 100000 shares are a small number, it is still an inside buy that has not happened for a long time.

Fred, thanks for info on the excess part of the OO. A couple of days ago, a post here on a recent analyst report written by Richard Knight (Liberum) mentioned that "The final step requires the issuance of a $500m high yield bond, targeted for this June, which will unlock a $2.5bn revolving credit facility from JP Morgan". Therefore, this could be done in a couple of months, i.e., possibly only a few weeks away, well before the end of Sept/Oct. It should be announced as soon as it is done.

I did not pay for the all the excess offer (which is about 55% of my holding), I paid only about 18% of my holding. In the end, I got much less than the 18% of my holding. I gather if I paid for all the excess as listed as a placeholder, I might get the full 20%. There might also be a difference among brokers; and may also relate to the holding size.

In my post on the 9th of May, I speculated that everyone may get around 18% of their holding from the Excess Application Facility (EAF), as TS (the CFO) got 18.44% of his holding from the EAF (as shown in the Prospectus).

Now, we have found out that this ends at 20%, which is very close to the percentage given to TS. If SM had made this clearer, more people might have booked the max of their Excess offer and got the discounted shares that takes above 20% of their holding.

Anyway, given the current share price is very close to the open offer price, anyone wants more can still get them from the open market.

PELHAM CAPITAL LTD bought over 353m (5.07% of 6.977b), more than that of Qatar or Capital. Why not in the news?

Why did they cross the threshold on the 22 of May, rather than as Qatar and Captical on/after the 23 of May when the placement shares are formally counted? Did they buy the shares from the open market? If so, it should be a significant news.

fred: "I didn’t realise the scale back was based on 19.8756% of your holding - I thought it was based on how many you applied for ..."

Fred and anyone who has got your excess shares:
I have got the basic entitlement shares added to my existing holding, with buy or sell button. However, the excess part is still separately listed. It has reduced to around 19.8756% of my holding (from the initial higher number), with a zero value for all the price, value, and cost and without a Buy or Sell button. Is this normal? How about yours?

Thanks 42trader for the great additional details than those found in the proactiveinvestors article.
Do you have a link (if the info is openly accessible)?

The cross over 3.30% of the Qatar Holding LLC happened on the 23rd of May, also before the new shares.
In August 2018, CF said that II interest to SM had increased, and when it is less than three years from production (i.e., 2021), there would be more IIs would be interested. This is just what has happened by Now and should be more from now on!

This has happened by the 22nd of May before the new shares. Therefore, they must have brought the shares from the open market. This is a great news, as it shows the II interest to the shares.

Has anyone got these appeared in your account (as they are supposed to be available today)?

IG article:
https://www.ig.com/uk/news-and-trade-ideas/shares-news/sirius-minerals--digging-in-deep-pockets-190516

DGR1980, thanks for the post, very useful experience.