24 | SHARES | 01 August 2019
WHY HAS THE SHARE PRICE BEEN WEAK?
WŽƚĂƐŚŵŝŶĞƌ Sirius Minerals (SXX) needs a lot of
ĐĂƐŚŝĨŝƚŝƐƚŽƚƵƌŶŝƚƐƉŽƚĞŶƟĂůůLJŵŽŶĞLJͲƐƉŝŶŶŝŶŐ
ƉŽůLJŚĂůŝƚĞŵŝŶĞŝŶEŽƌƚŚzŽƌŬƐŚŝƌĞŝŶƚŽĂƌĞĂůŝƚLJ͘
dŚĞ&d^ ϮρϬĮƌŵŚĂƐŵŽǀĞĚĂƐƚĞƉĐůŽƐĞƌ
ƚŽƚŚĂƚƌĞĂůŝƚLJĂŌĞƌŝƚĨĞůƚĐŽŶĮĚĞŶƚĞŶŽƵŐŚƚŽ
ůĂƵŶĐŚĂΨρϬϬŵďŽŶĚ͕ƉĂƌƚŽĨŝƚƐĞīŽƌƚƐƚŽƌĂŝƐĞ
Ψϯ͘ΘďŶƐŽŝƚĐĂŶĐĂƌƌLJŽŶǁŝƚŚďƵŝůĚŝŶŐƚŚĞŵŝŶĞ͘
/ŶǀĞƐƚŵĞŶƚďĂŶŬ:WDŽƌŐĂŶŚĂƐĂŐƌĞĞĚ
ƚŽƐƚƵŵƉƵƉĂΨϮ͘ρďŶŽǀĞƌĚƌĂŌŝĨ^ŝƌŝƵƐŐĞƚƐ
ŝŶǀĞƐƚŽƌƐƚŽƚĂŬĞŽŶƚŚĞΨρϬϬŵďŽŶĚ͘ŽŵďŝŶĞĚ
ǁŝƚŚΨκϬϬŵŝŶĐŽŶǀĞƌƟďůĞďŽŶĚƐĂůĞƐĂŶĚ
ΨκϮρŵƌĂŝƐĞĚǀŝĂŝƐƐƵŝŶŐŶĞǁƐŚĂƌĞƐ͕^ŝƌŝƵƐǁŝůů
ŚĂǀĞƚŚĞĐĂƐŚŝƚŶĞĞĚƐŝĨŝƚĐĂŶŐĞƚƚŚĞůĂƚĞƐƚ
ďŽŶĚŵŽŶĞLJ͘
ƵƚǁŚĂƚŚĂƐŐŽƚŝŶǀĞƐƚŽƌƐƐŽĂŶŶŽLJĞĚǁŝƚŚ
ƚŚĞĐŽŵƉĂŶLJŝƐƚŚĞΨκϮρŵŝƚƌĂŝƐĞĚĨƌŽŵŶĞǁ
ƐŚĂƌĞƐ͕ǁŚŝĐŚŝƚďĂŐŐĞĚďLJŽīĞƌŝŶŐƚŚĞŵĂƚϭρƉ
ĂƐŚĂƌĞʹĂƐŝŐŶŝĮĐĂŶƚĚŝƐĐŽƵŶƚƚŽƚŚĞϮϭ͘εƉƚŚĞ
ƐŚĂƌĞƐĐůŽƐĞĚĂƚƚŚĞĚĂLJďĞĨŽƌĞƚŚĞƉůĂĐŝŶŐ͘
/ŶĂĚĚŝƟŽŶ͕ƚŚĞĐŽƐƚƚŽďƵŝůĚƚŚĞŵŝŶĞŚĂƐ
consistently gone up in the last few years, with
^ŝƌŝƵƐĂƐŬŝŶŐĨŽƌŵŽƌĞĐĂƐŚĞǀĞƌLJƟŵĞ͘
,ĂǀŝŶŐƐĂƚĂƚκρƉƚŚƌĞĞLJĞĂƌƐĂŐŽ͕ŝƚƐƐŚĂƌĞƐ
ĂƌĞŶŽǁƚƌĂĚŝŶŐĂƚŵƵĐŚůŽǁĞƌůĞǀĞůƐĚĞƐƉŝƚĞƚŚĞ
ƉƌŽũĞĐƚďĞŝŶŐŵŽƌĞĂĚǀĂŶĐĞĚ͘WHAT COULD SPARK A RE-RATING?
/ĨŝƚŐĞƚƐƚŚĞďŽŶĚŵŽŶĞLJƚŚĂƚǁŽƵůĚĞīĞĐƟǀĞůLJĞůŝŵŝŶĂƚĞƚŚĞĮŶĂŶĐŝŶŐƌŝƐŬǁŝƚŚƌĞŐĂƌĚƐƚŽ
ƚŚĞƉƌŽũĞĐƚ͘
ŶĚĂŶĂůLJƐƚƐĐŽǀĞƌŝŶŐƚŚĞƐƚŽĐŬďĞůŝĞǀĞŝƚ͛Ɛ
ŚŝŐŚůLJůŝŬĞůLJ^ŝƌŝƵƐǁŝůůŐĞƚƚŚŝƐĐĂƐŚ͕ŵĞĂŶŝŶŐ
ƚŚĞƐŚĂƌĞƐĐŽƵůĚďĞŝŶĨŽƌĂŵĂũŽƌƌĞͲƌĂƟŶŐ͕
ǁŝƚŚ^ŚŽƌĞĂƉŝƚĂůĂŶĂůLJƐƚzƵĞŶ>ŽǁƐĂLJŝŶŐŝƚ
ŝƐƚŚĞ͚ŬĞLJƚŽĞīĞĐƟǀĞůLJƵŶůŽĐŬŝŶŐ^ŝƌŝƵƐ͛ƐǀĂƐƚ
ƉŽƚĞŶƟĂů͛͘
ĞƐƉŝƚĞƚŚĞŵŝŶĞďĞŝŶŐLJĞĂƌƐĨƌŽŵƉƌŽĚƵĐƟŽŶ͕
^ŝƌŝƵƐŚĂƐĂůƌĞĂĚLJƐĞĐƵƌĞĚƐĞǀĞƌĂůŽŏĂŬĞĚĞĂůƐ
ʹǁŚŝĐŚŝƐǁŚĂƚůĞĚ:WDŽƌŐĂŶĂŐƌĞĞŝŶŐƚŽůĞŶĚ
ŝƚĂŚƵŐĞĐŚƵŶŬŽĨƚŚĞĐĂƐŚʹǁŝƚŚŵŽƌĞŝŶƚŚĞ
ƉŝƉĞůŝŶĞ͕ĞǀŝĚĞŶĐĞďŽƚŚŽĨƚŚĞĚĞŵĂŶĚĨŽƌĂ
ƉƌŽĚƵĐƚǁŚŽƐĞŵĂƌŬĞƚĚŽĞƐŶŽƚLJĞƚĞdžŝƐƚ͕
ĂŶĚĐƵƐƚŽŵĞƌƐ͛ďĞůŝĞĨƚŚĂƚ^ŝƌŝƵƐǁŝůůŐĞƚƚŚŝƐ
ŽīƚŚĞŐƌŽƵŶĚ͘
/ƚƐƚĂƌƚĞĚĂƌŽĂĚƐŚŽǁĨŽƌƚŚĞďŽŶĚůĂƐƚǁĞĞŬ͕
with the bond pricing on 6 August and the deal
ĐůŽƐŝŶŐŽŶεƵŐƵƐƚ͘
KŶĐĞƚŚĞĮŶĂŶĐĞŝƐŝŶƉůĂĐĞ͕ŝŶǀĞƐƚŽƌƐǁŝůůƐƚĂƌƚ
ƚŽĨŽĐƵƐŵŽƌĞŽŶƚŚĞŽƉƉŽƌƚƵŶŝƚLJĨŽƌ^ŝƌŝƵƐĂƐĂ
ƐƵƉƉůŝĞƌŽĨŵƵůƟͲŶƵƚƌŝĞŶƚĨĞƌƟůŝƐĞƌĂŶĚŚŽǁŝƚĐĂŶ
ŚĞůƉƚŽŝŵƉƌŽǀĞĐƌŽƉLJŝĞůĚƐĂƌŽƵŶĚƚŚĞǁŽƌůĚ͘
ĞƐƉŝƚĞƚŚĞƉŽƚĞŶƟĂůƚŽďĞĂŵĂũŽƌĞŵƉůŽLJĞƌ
ŝŶƚŚĞh<ĂŶĚĨŽƌƚŚĞƐŚĂƌĞƐƚŽƌĞͲƌĂƚĞ
ĚƌĂŵĂƟĐĂůůLJ͕ŝŶǀĞƐƚŽƌƐƐŚŽƵůĚŶŽƚůŽƐĞƐŝŐŚƚŽĨ
ƚŚĞĨĂĐƚƚŚĂƚƚŚŝƐŝƐĂŚŝŐŚĞƌͲƌŝƐŬŝŶǀĞƐƚŵĞŶƚ͘
dŚĞƌĞĂƌĞŐĞŽůŽŐŝĐĂů͕ƉƌŽũĞĐƚĞdžĞĐƵƟŽŶĂŶĚ
ŵĂƌŬĞƚƌŝƐŬƐƚŽĐŽŶƐŝĚĞƌ͕ĂƐǁĞůůĂƐƚŚĞƉƌĞƐƐƵƌĞ
ŽŶ^ŝƌŝƵƐƚŽŽƉĞƌĂƚĞƚŚĞŵŝŶĞƉƌŽĮƚĂďůLJĂŶĚďĞ
ĂďůĞƚŽƉĂLJĚŽǁŶŝƚƐƐŝnjĞĂďůĞĚĞďƚ͘Sirius
Minerals
(SXX) 16p
BUY
2016 2017 2018 201915253545
SIRIUS MINERALSBy Tom Sieber, Ian Conway, James Crux,
zŽŽƐŽĨ&ĂƌĂŚĂŶĚDĂƌƟŶ'ĂŵďůĞ