Every thing looks good , why the big share price drop?
Probably a reaction to the debt news in the recent RNS, with the IPA only being used at the latter end of the project and being a third of the debt as opposed to the previously expected half ?
Chances are that will mean that the interest payable will be a bit higher than it otherwise would have been. If we’re paying more in interest, then that’ll eat into the earnings available to shareholders, so, until the debt’s paid off, we’d end up with a slightly smaller piece of the pie
The first point us they have a funding shortfall. However following this latest announcement the shortfall has increased. The debt investors will likely want more equity to offset the withdrawal of 500m protected funding from the IPA. Higher interest unlikely to be enough because in this revised structure there is clear hierarchy with public debt suffering losses first in the event of construction delays and cost overruns. So net net whatever dilution the equity return was likely to suffer has increased further following the latest announcement and you could argue there is little value in the current equity.
“Hey man, why don’t you knock it off with them negative waves?” as one DS once said.
Keep the faith, Chris Fraser will sort it.
“Can we build it? Yes we can”
Nice news item posted by Sirius yesterday.
"This product is going to change the fertilizer landscape here…
POLY4 has a place in every agricultural market in Brazil” - Santiago Franco, Cibra CEO.
Tell Mr. Fraser we need this funding issue sorted,
although the positive side to the present jitters downwards, do provide buying more opportunities for us long termers.
Anyone see the article in the Telegraph on Monday 28th showing that Sirius Minerals is amongst the 10 MOST SHORTED stocks in the UK and by whom?
The already filthy rich Hedge Fund b********s.No wonder the price is so volatile.
Yes, seen that report.
A lot of City people are gambling SXX to get lower than just 18-19p before S2, very risky for the PI.
But just keep some spare money for the top up if it does, I am. IB
Speculation appears to be rife on some chat sites concerning how much cash Sirius have in reserve, and when they will need to call Gina Rhinehart for the next top up whilst next funding drags on.
Come on Mr Fraser we need the S2 details sooner, not later. IB.
Great photo of Woodsmith in the snow.
Great photo thanks IB.
TBM for MTS tunnel.
It’s on the way.
Sirius advise that components of the first TBM are being loaded into barge on the Rhine for transport to Rotterdam before ship transfer to Teesside.
Sirius Minerals boss Chris Fraser ‘confident’ of potash mine project revival
16:28, 22 SEP 2019
The man in charge of Sirius says he is confident its Moors mine will get back on track as he hinted smalltime investors may have been misled.
Chris Fraser is exploring options to reduce costs and attract new investment to the firm’s struggling £3bn potash project near Whitby.
But with shares plunging in value , a shortfall in cash still to be plugged and staff being laid off, his company faces an uphill battle.
The Australian miner told The Sunday Times : “I am confident we will get through this.
"That doesn’t mean there isn’t a risk, but I am confident. We have an excellent project.”
More via link below:
From the ‘One Show’ yesterday (5:20 in):
Good to see some moving images rather than still photographs, but why did the BBC air this on Tuesday?
Four holes in the ground and one burrow, Nice.
Treasury is short sighted on interest potential. A news article yesterday.
The Government could have earned hundreds of millions of pounds if it had backed the recent $3.8billion (£3billion) finance package for Sirius Minerals.
Sirius asked the Government to guarantee up to $1billion of bonds as part of the complex deal.
If the Treasury had agreed, Sirius would have paid the Government annual interest estimated at $50million to $100million over the life of the bond – amounting to at least $400million in total.
Chris Fraser talks to The Times.
300 jobs gone, slow down mine construction, strategic review to get high risk shafts built.
He is confident that such a review could be completed by the end of this month, boss Chris Fraser told The Times newspaper that one option could be to raise a much smaller sum to fund construction of the parts of the mine that the bond markets were most worried about.
he told the newspaper that Sirius was looking at getting separate funding to for the elements of the mine that the project finance banks and bond market were “least comfortable with”, such as the construction of deep mine shafts, before financing other parts with lower perceived risks separately.
IMHO. News in mid November, probably after Brexit dust settles?
Sirius Minerals could start mining early to raise cash as it reveals job loss numbers
11:29, 7 OCT 2019
Firm reveals true extent of job losses so far as it protects cashflow; part-built tunnel could be used to extract mineral early
"A further 900 employees have remained in place , after Sirius said it would keep “as many of its people” as it could so the project was “ready to go” as soon as a solution was found.
Sirius boss Chris Fraser announced a six-month review as the company promised shareholders it would do its “absolute utmost” to solve the current cash troubles.
Options “on the table”, according to the firm, could include using its part-built underground tunnel to extract the available mineral and then selling it.
The firm is also exploring the idea of raising a far smaller amount to fund construction of what is thought to be the riskiest parts of the project first.
It could also join forces with a “strategic partner”.
A spokesperson for the firm said: “We are leaving no stone unturned, [last month’s announcement] was not Plan A but we are still here and looking at various different options.”"
North East Politicians send letter to the PM.
Here below is there letter in full:
Dear Prime Minister,
On behalf of the people and businesses in North Yorkshire, Tees Valley and the wider region we urge the Government to put its full support behind the Sirius Minerals project.
We share your belief in the need to realise the productive power of the country, outside of London and the South-East, and that the benefits of economic growth should be shared with communities across the country.
The Sirius Minerals project can help to deliver these aims and help the UK develop an important new fertiliser industry.
This project represents an opportunity to boost export-led growth and deliver economic benefits on a national scale. It is ambitious, outward-looking and is exactly the sort of enterprise that Government should be supporting. Sirius has already invested over £1 billion in the project and has become a crucial and very visible part of the northern economy.
Once operational the project will support over 1,000 good quality, well-paid direct jobs, with more in the supply chain. We also welcome the positive contribution that Sirius has made to the community through our boroughs, which we have seen first-hand.
The problems facing coastal communities are well documented; they are far away from large industrial centres, often have poor communication links and suffer from low-wage, seasonal and part-time opportunities, The Sirius Minerals project gives these communities – and particularly their young people – real opportunities they would otherwise have to leave the area to secure.
Up until last week there were 1,200 people working on the project across its sites in North Yorkshire and Teesside.
With last week’s announcement that Sirius was unable to deliver its stage 2 financing plan, we are obviously concerned that the delivery of this important and transformational project will be delayed, and the impact such a delay would have on the regional and UK economy.
Indeed, as Sirius reduces the pace of the project while it develops an alternative financing plan, there has already been a reduction in personnel employed at the development.
We understand that current global market conditions and uncertainty regarding the ongoing trade war between the United States and China have made it difficult for Sirius to raise the financing it needs.
We urge the Government to continue to engage with Sirius, to continue to support this truly transformational project and to work towards a solution that sees it delivered on time.
Cllr Steve Siddons
Scarborough Council leader
Cllr Mary Lanigan
Redcar and Cleveland leader
Tees Valley Mayor
Cllr Carl Les
North Yorkshire County Council
Head of Sembcorp Energy UK
Director of the Northern Powerhouse Partnership
David Kerfoot MBE DL
Chair York, North Yorkshire and East Riding LEP
11 October 2019
Sirius Minerals Plc
Major supply and distribution agreement with Muntajat
– Muntajat is a state-owned Qatari company which markets and distributes approximately 9 million tonnes of fertilizer per annum
– Ten-year supply and distribution agreement with Muntajat into Africa, Australia, New Zealand and certain Middle Eastern and Asian territories
– Contracted volumes increase to c.2.0 Mtpa in year five and peak at 2.1 Mtpa in year eight - taking Sirius’ aggregate peak sales volumes to 13.8 Mtpa
Sirius Minerals Plc (“Sirius” or the “Company”), through its subsidiary York Potash Ltd, has entered into an exclusive ten-year supply and distribution agreement with Qatar Chemical and Petrochemical Marketing and Distribution Company Q.P.J.S.C (“Muntajat”), for the sale and distribution of volumes of POLY4 into Africa (except Nigeria and Egypt), Australia, New Zealand and certain remaining Middle-Eastern and Asian territories (the “Agreement”).
Chris Fraser Managing Director and CEO of Sirius, comments:
“We are delighted to expand our growing partnership with Qatar through this long-term supply agreement with Muntajat. Qatar is already a major investor in Sirius via QIA and Sirius is working with Muntajat to explore the downstream combination of POLY4 with nitrogen products in Qatar and/or the United Kingdom to create a value-added multi-nutrient fertilizer. This new supply agreement with Muntajat provides us with access to a number of new markets for POLY4 and further underpins the large scale, international market appetite for POLY4, lifting our aggregate peak sales volumes to 13.8 Mtpa.”
Abdulrahman Ali Al-Abdulla, Chief Executive Officer of Muntajat, comments:
“We see tremendous potential in POLY4 and Sirius’ Project which will enable us to bring this multi-nutrient product to our extensive global customer network. The addition of POLY4 will complement our existing portfolio and will enable us to provide a more complete solution to our customers in these important markets by adding additional macro-nutrients to our portfolio.”
Background to Muntajat
Muntajat is a state-owned Qatari company established in 2012 which markets, distributes and sells over 16 million tonnes per annum (“Mtpa”) of fertilizer, polymer, chemical and steel products including approximately 9 Mtpa of fertilizer. Muntajat represents and is exclusively responsible for the global sales and distribution of products from 15 major industrial production entities in Qatar and for marketing, selling and distributing all of Qatar’s fertilizer production. Muntajat has a global marketing network servicing more than 3,000 customers in 135 countries from Doha and 17 international locations.
Qatar is one of the largest urea producers in the world with a 14 per cent. share of world supply and produces approximately 5.6 Mtpa of urea as well as 3.8 Mtpa of ammonia and 2.3 Mtpa of sulphur.
The Agreement provides for the exclusive distribution of POLY4 for a 10-year term that commences from commercial operations and includes a five-year extension option. Minimum volumes relating to the specific territories under the Agreement increase, in aggregate, to approximately 2.0 Mtpa in year five and further to 2.1 Mtpa in year eight. The Agreement takes Sirius’ aggregate peak sales volumes to 13.8 Mtpa and peak contracted production in any one year to 12.2 Mtpa, excluding options.
The Company may terminate Muntajat’s distribution rights under the Agreement in relation to a specific territory, if Muntajat fails to distribute 75 per cent. of the contracted minimum volumes for such territory over a three-year rolling period. In addition to customary termination rights for both parties, Muntajat has the right to terminate the Agreement in the event that Sirius does not meet certain financing or operational milestones.
The pricing mechanism in the Agreement is linked to downstream pricing received by Muntajat on the sale of POLY4 and incentivises Muntajat to optimise the best FOB netback price for Sirius. Sirius expects the Agreement to deliver pricing in line with its average price expectations across the current supply agreement portfolio.
Expanding partnership with Qatar
In addition to the Agreement, Sirius is working with Muntajat to explore the downstream combination of POLY4 with nitrogen products in Qatar and/or the United Kingdom to create a value-added multi-nutrient fertilizer.
The Agreement expands the Company’s existing relationship with the state of Qatar, which, through the Qatar Investment Authority (“QIA”), is one of the largest investors in Sirius.