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Stockbroker more confident over Sirius Minerals funding

At 60p per share the broker's new target suggests some 160% upside to the Sirius Minerals' current share price.

Sirius Minerals polyhalte product
Sirius Minerals polyhalte product

Stockbroker Shore Capital is now more confident than ever that Sirius Minerals PLC (LON:SXX) will be able to fund its world class mine without much fuss.

Analyst Yuen Low, in a note, said procuring the requisite funds should not prove overly problematic.

It comes after Sirius landed the last remaining approval for the proposed mine in North Yorkshire, with the government this week giving the green light for harbour facilities on Teesside.

Permitting is now effectively eliminated a potential issue, according to Low, who says the latest achievement will be reassuring to lenders.

He also highlighted that last month Sirius revealed a refined implementation plan which dramatically the project’s upfront capital funding requirements.

Latest estimates put the total capital requirement at US$2.9bn, 18% less than before, and that the first stage of development now needs US$1.09bn rather than US$1.6bn.

“Given these positive developments, we are more confident than ever that procuring the requisite funds should not prove overly problematic,” Low said.

“While Sirius is currently at development stage and still some years from becoming a cash flow-generating company, an investment in Sirius will become progressively de-risked and should enjoy significant value uplift as it advances towards production, we believe.”

Shore Capital has a ‘buy’ recommendation for the mine developer, and today the broker upgraded its price target.

At 60p per share the new target suggests some 160% upside to the current share price of 23.25p.

Quick facts: Sirius Minerals PLC

Price: 3.466 GBX

LSE:SXX
Market: LSE
Market Cap: £243.29 m
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