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Sirius Minerals to prioritise debt as it seeks project financing

Planning approval and commercial supply deals were the highlights of a shortened financial year - which is the result of changes to move Sirius Minerals in line with most Main Market stocks in London.

Sirius Minerals polyhalite fertiliser product, which comprisespotassium, calcium, sulphur and magnesium and is essentially a form of potash ash
Sirius signed up two major customers for its polyhalite fertiliser product.

Sirius Minerals PLC (LON:SXX) chairman Russell Scrimshaw has told investors the company is prioritising debt financing for the funding of the North Yorkshire polyhalite project (formerly referred to as ‘York Potash’).

Scrimshaw, in the company’s financial results statement, said: “The company's board, management and finance team continue to be focussed on both the efficient management of our existing funds and the ongoing (and extensive) work to secure financing for the construction of our project. 

“We remain focussed on a range of funding options and continue to believe that the overall funding requirement can be delivered through a number of mechanisms, with debt funding likely to make up as much of the overall requirement as possible.”

The financial results for 2015 cover a shorter than normal calendar, due to Sirius changing its financial reporting schedule to move it in line with those of most ‘main market’ listed companies in London.

The report spans a nine month period, between March 31 and December 31 2015. Sirius, a pre-revenue company, reported a loss of £7mln and at the end of the period it had £29.1mln of cash.

Operationally, it was a key period for the company as it secured key planning approvals for the the North Yorkshire polyhalite project and as a result moved the project on to the development phase.

In the current year the project took another important step with the release of a definitive feasibility study, which reaffirmed the project’s ‘world class’ potential.

Attention has also been on commercial development, and the signing of cornerstone industry partners ready for when the mine is up and running.

Notably, in 2015, Sirius Minerals signed up a major American customer – a Fortune 500 agri-business – as an off-take partner of some 1.5mln tonnes of product per year, for a seven year period.

A sales agreement was also signed with Huaken International, one of a limited number of Chinese groups allowed to import fertiliser products. A seven year arrangement will see some 500,000 tonnes supplied to the customer each year, also for seven years.

Sirius Minerals also strengthened its board during 2015, with the addition of two non-executive directors.

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