BHP to spend 43M building Nickel plant near Perth, page-57

Not at all sure how much more value I can add to T's post here, which answered the unasked but more important bigger picture question. However, I'll give it a crack...

Freakster, you have asked a number of Qs, which I will answer using a paint-by-numbers approach, for the benefit of any other newbsters who might have been afraid to ask.

"Warwick" is name members of this thread have given to automate trading algorithm that "caps" (soaks up) any upward share price movement in POS by absorbing any upward price moving bids. He (it) is widely believe to be acting on Pershing's behalf atm. Although there have be historical instances in which Wazza has acted independently. It's basically a play on words. Remember Warwick Capper?

Pershing are a brokerage house that offer a wide range of services to the finance industry. As I understand it, their arrangement with POS is to take all the new shares issued by POS management and convert them to much needed cash. Under normal circumstances one might believe that when a 3B states that the shares have been placed to "professional and sophisticated investor clients" ("sophs") for a deemed price, you could take it at face value (i.e. that the shares had been sold to sophs for the price indicated).

BUT, there is ample evidence (imo, which I have previously demonstrated in detail on this board) to suggest that we are not operating under "normal" conditions. Rather, it appears that Pershing take all new shares issued on a "best efforts" basis (or something like that) and try to offload them any way they can. For quite a while now this translates into offloading them into the secondary market (i.e. ASX &/or chi-x). The problem here is that the market for POS shares has become thinner and thinner over time (presumably due to loss of credibility of management and also a general loss of interest in the broader Ni sector). This means that Persh has the unenviable task of trying to sell (offload) large parcels chunks of shares (20M for the most recent CR) into a reasonably illiquid market. So it must be done with care, so as to not scare the horses (i.e. dribbled out a bit at a time). Pershing's challenge, however, is to convert all these shares to cash in a reasonably short period of time and pass on the proceeds to POS management, less their commission. And because they need to offload into a reasonably illiquid market, their activities place material downward pressure on the share price. It's a vicious cycle: the actual cash amounts raised from new shares issued are more often than not less than the amounts implied by the 3Bs. This has meant that management must then issue greater amounts of shares more often, just to keep the doors open.

To put this into context, for this current quarter, management will need to issue and sell ~40M shares, just to stay solvent. There's also an argument to be made that an additional ~15M may also need to be issued and sold this quarter.

That 20M of new shares that was the subject of the 3B issued on 26 July was only the first tranche for this quarter.

There was great hope (<- that word again!) that the proposed processing plant lease to KDR would solve much of our operational cash woes. Sadly, it appears that the recent KDR-SQM JV announcement has killed it. The option doesn't expire until the end of this month, so well have confirmation then.

No. The CN interest payment is totally separate. It is paid quarterly (in arrears) to Jefferies Bank (JB). POS has the option to pay them using cash or shares. In recent times we have paid them using shares. For as long as SP erodes we must pay them an ever increasing amount of shares, in order to satisfy the dollar amount of interest due. For a while we thought that JB were also offloading their in specie CN interest payment shares, placing downward pressure on the SP, but recent evidence indicates that they have been hoarding (accumulating) them all along.

Hope that helps.

Z