Sirrus Minerals

[bitchstewie]

I haven't seen a thread on this so apologies if there is one.

I've noticed on Hargreaves Lansdown's "most traded" chart a company called Sirrus Minerals and wondered "who are they?".

https://www.bbc.co.uk/news/business-49766418

In some ways I feel tremendously sorry for them but I also thing this doesn't have the traditional hallmarks of having been mis-sold or mis-led as has happened over things like dodgy bonds.

I appreciate it may come down to a single word, "greed" but how do ordinary members of the public end up in this situation?

[xx99xx]

See the share tips thread.

And I wouldn't say it's entirely greed. 6 months ago the project looked like a fantastic long term investment. Even a few years ago it did but had a few more hurdles to clear to reduce some of the risk back then.

Unfortunately the effect of Brexit and Trump were unforeseeable when the company starting developing the project and people started buying shares.

Edited by xx99xx on Saturday 21st September 10:32

[bogie]

Fear of missing out I guess. Its easy for those with little investment experience to get carried away with their friends excitement. When you read some of the forums you realise that many new private investors have so little understanding they should not be investing in the markets at all, certainly not putting significant amounts of their savings into a single speculative share.

It still could be a success, there is still time for rabbits to be pulled out of the hat, it would be a shame to see it fail after all the work to date. What is most uncertain is the nature of any rescue deal, even with funding from existing institutional investors, and how it could dilute private investors even further.

[Condi]

Why have they struggled to get funding? With customers confirmed, and I think I read some of those customers being international (so Sirrus benefits from FX movements over the last few months), what do the banks know that the private investors don't? Surely if the model worked at £1:€1.2 at £1:€1.1 it is more profitable than expected, and they should have no issue raising cash for the last push to production.

Or maybe someone can explain why Brexit and Trump have any impact on an exporting business supplying fertiliser to a very inelastic market. People continue to need food, and farmers will continue to apply fertiliser to maintain their yields.

[bogie]

Various market reasons, they had the funding sorted out with JP Morgan but in order to qualify they had to sell $500M of bonds by end Sept.

I read this earlier, seems like one of the most sane assessments ....

https://www.express.co.uk/news/uk/1180696/sirius-m...

[xx99xx]

They report their finances in US dollars rather than GBP so have already benefited from a weak pound.

Brexit - a) the government are slightly distracted by it and in different times may have been placing more priority on the 'northern powerhouse' and would do more to prevent Sirius from failing. B) investors are more cautious with their money with Brexit uncertainty.

Trump - his proposed trade war with China hit the share price last month. Again, it just promotes economic uncertainty which affects investors.

[anonymous-user]

There are jitters about the need for the mine (ICL's Boulby mine just up the road is still going strong)

And it is eating money at a rate that can't be imagined!

Other people's money and other people have blinked when asked to dig in for another wedge

[Condi]

There must be more than that. Trump/China has little or no impact on their export plans, and given what they've said about having customers lined up there must be something in the investor documents that is unsettling, especially with central bank rates being cut I would have thought a bond would have been attractive if their plan looked achievable.

Its a shame the government is not prepared to guarantee the debt, considering the potential benefits to the region. Meanwhile the SNP controlled Scottish government own a handful of loss making business' and are quite happily buying more! Or 'rescuing' as they would have it.

EDIT - JP, sorry just seen your post. Makes sense, but I still don't understand, if they have a solid business plan, and sensible costings, why investors are complaining about another round of financing as long as it is in line with the original plan? If, however, the business just keeps eating more cash with no end in sight, then maybe I can understand.

Edited by Condi on Saturday 21st September 18:19