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myo, thanks. So the total debt is still some left old CB (in value; small part in the part of new CB not held in JMP account ). All the $400m new CB has been returned.

Yes, I get this back from memory now.

JPM and Liberum are SM house brokers. They have more information and knowledge on SM than others.
Do not why they are allowed to trade the SM shares frequently on some small spread?

illbetabuck, these new CB has been held in escrow in JMP bank account. SM cannot use them and has announced to return the new CB to the lenders. How can the lenders still expect to get the 5% interest? only for certain period?

SM still has USD 236,600,000 debt in convertible bonds, including
1) USD 137,600,000 8.5 per cent convertible bonds due 2023 (ISIN code: XS1515223516) and
2) USD 99,000,000 5 per cent convertible bonds due 2027 (ISIN code: XS1991118255).

The $99m is the new CB, the lenders can get them back in their original price, why are they still here?
Traded in the market? or the owner believe that they can get more than the original amount from SM project?

We do hope for "more positive outcome" then the current offer as the AAL offer kicks out of the IIs and PIs, and takes 100% of the mine. The plan as shown in Nov strategy review update was to look for strategy partner and investor, rather than takeover. AAL or other parties, if they were getting involved in the DD as potential strategy partner or investors, they should leave some part for existing shareholders. It would be a cheating if they pretend to be interested in serving such roles and get assess to all the business information or secretes of SM, and then change their role to a 100% acquirer.

"It will bring jobs, money, investment and increase tax revenues to UK PLC."
But there are "two parts to this story," he added - and it was not all "plain sailing" for investors.
"If this announcement plays out as stated then there will be lots of private investors who will lose money as a result."
"This announcement may not be the end."
"There now may be other potential investors who come out of the woodwork, which may result in a more positive outcome. Time will tell."
https://www.gazettelive.co.uk/news/teesside-news/sirius-minerals-possible-cash-offer-17539341
He added: "Still a long way to go though and I feel as though there may be some twists and turns before the end."

5.5p per share for all the shares of the company is indeed very low (especially for existing shareholders). However, this comes together with full funding needed to complete the mine.

The possible offer is still a very positive good news: from a large mine company, rate Sirius as a tier 1 asset, ...
which would enhance the confidence of other potential partners/investors, offers/bids.

brickroad: "Why have two employees resigned as directors from York Potash in early December?"

As Sirius has multiple subordinate companies; resign or remove of a role in one subordinate company may not mean to take out their role in another subordinate company or at a higher level. I gather Graham Clark is still operation manager of the project; and he seems to still work there and will address to a conference on behave of SM.
It would be not good if both development and operation managers are going to step down or leave.

Double or triple of the share count, i.e., let the new strategy partner taking 50% or 75% were what I expected before in wishful thinking. However, AAL got in as an strategy partner candidates, did the DD, and then turned their role into a takeover party that wants to get the whole (100%) in less than the required $600m.

Due to the wide PI base, a fundraising in an open offer might be difficult, as most PIs might not be affordable to double or triple their holdings. Open offer plus firm replace should still be a final resort if the big IIs to push in this way.

Better solutions would be a combination of a strategy partner and bank/sovereignty funds to raise the $600m and share the
7b or 14b new shares; while now they seem more and more less unlikely, but still the best we are hoped for (i.e., options based on the plan that SM told us in the Nov strategy review update).

Most reports/news mentioned £386-million, or about $505-million only, even including ratings agency Moody:

"It pointed out, however, that the initial financial impact of a potential acquisition of Sirius would not be material for Anglo as the possible acquisition price of £386-million, or about $505-million, and Sirius’ small financial debt represent less than 10% of Anglo’s Moody’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), which Moody’s projected would reach more than $10-billion in 2019.

In addition, with a cash balance of $7.1-billion at the end of June 2019, the ratings agency said Anglo had strong liquidity which enabled it to fund a potential acquisition without having to raise external capital."

What are the additional that AAL has to pay before they take SM fully?
Gina's $250m; Can Gina keep the old deal to have 5% revenue when SM in production? or has to be buy out?
I thought all new CB should all have been returned; however, from the RNSs, we can noticed that some new CB still listed under several IIs., and some of them are trading the CB (not clear the old or new, or both). Why?
How AAL is going to pay these and how much to pay?

Shorts of the top five shorters droped from 6.46% to 5.37%
Highbridge and Polygon reduced their short (0.49% in total) on the 8th of Jan.
Citadel and Whitebox increased their short (0.15%) on the 7th and 8th of Jan.

They are all the SM CB or new CB investors. Some of their previous shorts were for hedging purposes.
The new shorts increased by Whitebox and Citadel indicate their negative view on the share price;
while Polygon has a more positive view as the deduction of shorts and increase long position in CFD.

Jupiter increased their holding before the announcement (327,719,269, 4.67% to now 547.2m, 7.79%), therefore, may be able to reduce their level of loss (in case the AAL bid is successful). They are now the largest SM investor.

So far, as seen from the RNSs in last two days, no big IIs had sold their shares. They still hold more than 33.81% (of the total 7.02b): Qatar Investment Authority: 230.2m shares, 3.28%, and 100m shares in CB. Norges Bank: 156.2m shares, 2.23%.
Pelham Capital Limited: 353.5m, 5.04%. BlackRock Group: 189m shares, 2.7%. Vanguard Group: 219m shares, 3.13%. Capital group, 196.8m. Barclays: held 91m shares. L&G: 143m share. Polygon: 109m shares 1.55%. ...
What do these tell us?

AAL bought 55m shares at around 5.5p with the help of Bank of America and Morgan Stanley. Not a significant number yet, however, it is interesting to see if they would grab more by themselves or with the help of others. What might be the purpose for this? Only to get them a chance to attend the General Meeting and vote ?

* Polygon:
held 239.6m shares
held 2m in new CB
shorted 25.8 shares
just reduced 26.9m shares short position in CFD
and increase 127.6m shares long position in CFD

The added over 120m shares of long position in CFD seems to indicate that Polygon is made a long bet, as they have a significant long position in shares and a small new CB.

* Highbridge Capital Management:
shorted 60.5m shares
held 14.8m new CB
sold 1.2m shares worth of CB
reduced 4.9m shares worth short position in equity swap

JiffyBag: "I think this has been on the cards for sometime"

Yes, I tend to agree after reading the article (see link in JiffyBag's 23.25 post).

'We have been . . . keeping an eye on this project for some time,” Stephen Pearce, chief financial officer, said yesterday. He joined Anglo in 2016 from Fortescue Metals, an iron ore miner based in his native Australia, where he had served as an executive director since 2010. There, he overlapped with the tenure of Russell Scrimshaw, who has served as Sirius’s chairman since late 2011. Mr Fraser, who grew up and began his career in Australia, used to work closely with Fortescue as an investment banker at Citi.' Note that Gina has also an Australia mining background; and they have known each other long time ago in Australia.

The deal seems to have been sealed by the Australian mining connections (unless the big IIs, especially Qatar Investment Authority, Norges Bank, or China Development Bank could provide a better offer; for example, these banks provide half of the needed $600m and ICL serves as the halo strategy partner for a counter bid that would still leave 20% for existing shareholders). If ICL does not involve in such a joint deal, after the approval of the AAL deal, its Boulby mine and polyhilte business would come to an end in a few years.

duda: "Large buys today (10M, 20M, 13M shares) are really suspicious"

Bank of America and Morgan Stanley are buying shares for AAL (over 55m see RNS).

illbetabuck: "The honest truth, I think that they are overpaying for SXX. If you account for the convertible bonds, the secured cash from Gina, the amount of the offer. They are effectively paying circa 1 billion for SXX.
Given the risks and that total, they are perhaps being generous given the absence of another bidder."

By adding the fees for Gina and CB, if their total payment is around 1b, then yes the offer under current situation is not too bad (i.e., AAL will have to pay the amount money only slightly less those already spent; plus additional over 2.5b in later stage).

By the 8th of Jan 2020, there are still 2.177b shares, i.e., 31%, held by big IIs. Could be even more, if SM has more RNS on these to add tomorrow, e.g., Citi and Capital have not mentioned, or they may have all sold. SMALLCAP World Fund of the Capital Group still held 196.8m shares. Adding this alone would raise the IIs holding to 33.81% (of the total 7.02b). Are they anticipating some solution that the shares are still worth holding (at least before the bid)?

Bank of America and Morgan Stanley are buying shares for AAL (over 55m by today, the 9th). JPM is acting as the broker for the takeover. They have been the broker, the bank group key member, the h.y.bond funding plan lead, and then takeover broker. They earn the month through fees from both sides no matter good or bad to SM. They also bought 93m shares at around 5.5p and immediately sold immediately at a price slight higher than 5.5p (something around 5.55 to 5.7p). How can we have trusted them?

Barclays held 91m shares, but shorted 103m. They shorted 45m in swap at 5.49p. They bought 40m at around 5.5p and then sold 15m at around 5.5p. Do they have a clear mind? or still on short side.
Polygon held 109m shares; had 53m shorts, and then reduced 17.6m shorts. It is a surprise to see that Polygon has just added 110m long in CFD ! It seems the only company on the long side. Highbridge has also reduced their shorts by 17m in equity swap. Shorts reduction may be starting to be reflected on the shorts tracking site (https://shorttracker.co.uk/company/GB00B0DG3H29/) in the coming days, especially if there is another bid or funding offer appear.

Yes, they may also reduce the 5.5p offer, in case no other bid or funding arrangement emerge; or cancel the bid. I may have to consider sale more. AAL has been trying to push us to do so with such risk. We PIs are powerless, but even those big IIs?

They had 50% of the Boulby mine before it was sold to ICL in 2002, and they mentioned that they have had looked SM for quite a while. They have also just completed the DD. Therefore, they should have quite amount of the knowledge on the project/mine. Probably they were not able to reveal more due to regulation or other consideration. It seems a very good fit; a really halo miner; however, appearing as an acquirer (new owner) rather than a strategy partner (good for the mine and workers, but not existing shareholders).

Surprised to see so many RNS today, which shows that there are so many big IIs stilling holding a large number of SM shares. How can they could be happy to take 5p out of the 20p or 15p they paid before.

I sold half of my shares (the part that I got in a very low price) and still kept half (the old that at a loss), as so many IIs stilling holding, and several IIs reduced their shorts and added long (in CDF). In addition, AAL seams to have bought SM shares from other brokers in a price slight higher than 5.5p as shown in today's RNS. It might still be some chance for a higher price or holding potential due to other bidding/other arrangement that may emerge in the coming days. Of course, if AAL got a large enough percentage of shares from the market/other brokers/IIs in a price slightly higher than 5.5p, they may reduce their offer in Feb 5 (if they are sure that there is no other competing offers/arrangements).

Yes, King Nicholas was appointment as representative of the SM no2 company at registration for BR022056; and now reappointed of the same role signed by CF at registration for FC036968.

The company must have been activated to service a similar role in a new fundraising as before as many have pointed out :)

The (pairs of) comparison images of many corps (with and without Polyhalite) are great, which provides a visual and easy to understanding comparison on the effects of the new fertilizer.

Pupuk seems to be an Indonesia company, which packages Boulby Polysulphate (polyhalite) into a retail product named Vita 4 with the same meaning as Poly4 (i.e., the 4 main nutrients: S, K, Mg, Ca). Boulby's new product Polysulphate premium is almost identical to the Poly4 granule; this (i.e., the word premium in the new product name) confirms SM's previous claim that Poly4 granule is better than Polysulphate chips (the initial product from Boulby). Boulby initially promoted their products as a sulphur fertilizer, and now they and their customers seem to emphasize more on the multi-nutrients nature of polyhalite. They also developed a few products out of the blends of polyhalite and other N, P, K products. All these demonstrate that the SM product strategy has been a correct one from the very beginning of the project.

casa: "To be very blunt, SXX's current position is extremely precarious and no-one should entertain hopes of a double figure SP in the near or even medium term."

casa has been right multiple times in the past. Therefore, this warning is really a hit to the hope.

On the other hand, there might also be a positive-side surprise to the above projection:
JPM brokers have expected the share price would price-in a share dilution and the NPV would be greatly reduced after the bond withdraw. The share price did drop sharply as JMP brokers projected, or more extreme to a distorted level in comparison to the money that has spent on the mine ($1.775b, or around 19.44p per share)) under the high wipe out possibility . However, a sharp NPV reduction has been avoided if what SM claimed in their new plan is true (due to a large reduction of cost and other optimization): the NPV has remained largely the same as before, what a surprise! Based on this, Liberum has predicted that the dilution could be much less than what has been expected by many.

If the $600m fundraising is successful, the total raised money would be 1.775b+0.6m = $2.37b.
A 75% dilution gives a per share cost: 2.37/21.6 = 11.28c (8.8p)
while a 50% dilution: 2.37/14.04 = 16.88c (12.98p)
If the mine survives, its share price should move up to above the above mentioned cost per share.

npv 11b x 0.25 risk factor = $2.37b; turned out a projection the same as the above: i.e., a 8p or 13p fully depends on the level of dilution, no matter the project schedule delay is one year or two years.

If the Initial Scope were went well as planned, and if the perspective of the rest of the funding improves, under a risk factor of 0.4, i.e., the share price projection (before the differed scope) could move towards, npv 11 x 0.4 = 4.4b; /22 = 0.2c (15.38p) .

Therefore, it seems that a double figure SP might still be possible in the medium term (if the Initial Scope could be unfolded as planned, even with a 75% dilution), and note that if the share price could move above 13p, it would go back to a long term up trend. The share price of the company has a history of moving up and down multiple times of the bottom or top price.
It has been a bet for a long time.