logo-loader
viewSirius Minerals PLC

Sirius Minerals boss turns fire on investor bulletin boards

Chris Fraser, chief executive of the troubled potash mine developer, raised concerns that retail investors were being given advice by “unregulated, unlicensed” individuals

Sirius Minerals PLC - Sirius Minerals boss turns fire on online bulletin boards
Sirius is looking to fund development of its Woodsmith mine in North Yorkshire

The boss of Sirius Minerals PLC (LON:SXX) has criticised online shareholder forums and called on regulators to investigate and potentially shut down the sites.

Chris Fraser, chief executive of the troubled North Yorkshire potash mine developer, said in an interview with The Times that the forums, where shareholders can post comments on their investments, were a “disgrace” and that it was concerning that “unregulated, unlicensed” individuals were able to give out investment advice online.

READ: Sirius Minerals aims to finish strategic review by end of October

“Go and speak to a professional, otherwise it is gambling”, Fraser said, adding that the Financial Conduct Authority (FCA) should be investigating forums such as London South East and ADVFN, two of the most popular shareholder bulletin boards on the web.

Sirius, which has around 85,000 retail investors owning close to half its shares, has seen the stock lose around 60% of its value since mid-September after plans for a US$500mln bond issue were scrapped amid market uncertainty, with the UK government declining to step up and fill the gap.

The resulting share price plunge attracted despair from many of the company’s retail shareholders, some of whom said they had invested their life savings or pensions into the company,

Sirius is now undertaking a strategic review to reduce costs while it evaluates funding options, with the group announcing hundreds of job cuts at the Woodsmith mine on Monday.

In early-afternoon trading on Tuesday, the shares were 2% higher at 3.9p.

Broker sees “little chance of rescue”

While Sirius scrambled for financing options, analysts at SP Angel struck a pessimistic tone, saying they saw “little chance of a rescue” and that more job losses were likely to follow those from this week.

“On one level we admire the determination of management and the workforce to look to build the Woodsmith project and if willpower was enough on its own then the workers determination could get the job done” the broker said, however, they questioned the decision to proceed with the construction of a mine project that was “evidently unfunded to completion”.

“We would normally consider it to be extremely risky and unusual to start construction of a mine of this scale and this type of product without being certain of where the finance was coming from”.

SP Angel added that they would be “surprised” if the UK government decided to step in and save the project given the potential for “cost overruns, delays and the potential difficulties in the sale of its offtake”.

--Adds broker comment and updates share price--

Quick facts: Sirius Minerals PLC

Price: 3.518 GBX

LSE:SXX
Market: LSE
Market Cap: £246.94 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Group Eleven Resources finds a new investor in mining giant...

Group Eleven Resources (CVE: ZNG) CEO Bart Jaworski joined Steve Darling from Proactive Vancouver on Skype to discuss the news Glencore (LON: GLEN) has entered a shareholder agreement on Group Eleven’s Zinc Exploration in Ireland. Jaworski telling Proactive how the deal works and what it...

1 day, 23 hours ago

3 min read