Sirius Minerals - Re: SXX Stream Log - "This is a very significant...

"This is a very significant capital cost reduction and clearly good news for Sirius shareholders, although $2.91b is still a massive funding requirement for a company of Sirius' size. Management hopes that by splitting the capex into two stages the quantum is somehow reduced, but the fact is, it needs $2.91bn of funding to get the mine to profitability in year 7. That said management is planning to fund Stage 1 with 50% equity and 50% junior debt plus other instruments (e.g. royalty), and to fund Stage 2 with 100% senior debt. So splitting the funding into 2 parts is a valid approach, at least with regards its negotiations with potential funders. As things currently stand, 50% of $1.09bn is c £0.39bn (1.4 GBP:USD), not far off Sirius' current market value, but not an impossible feat. Management can reasonably argue that with an NPV10 of $15.3bn (£11.0bn) and EBITDA in year 9 of $1.8bn, £0.39bn for 50% of the company is a very attractive investment." Beaufort note out this morning on research tree