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Sirius Minerals financing discussions 'ongoing' and 'extensive'

“The strategy is still to deliver the overall funding requirement through a range of financing mechanisms, with debt funding making up as much of the overall requirement as possible,” Sirius re-affirmed.

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The finished product. POLY4 is packed full of nutrients.

Sirius Minerals PLC (LON:SXX) said work to secure the construction finance for its North Yorkshire Polyhalite Project was “ongoing” and “extensive”.

The capital requirements are put at US$2.91bn, with US$1.1bn needed to get the first phase of the ambitious underground fertiliser mine underway at an initial 10mln tonnes per year.

“The strategy is still to deliver the overall funding requirement through a range of financing mechanisms, with debt funding making up as much of the overall requirement as possible,” Sirius re-affirmed.

The update was provided in the body of the interim results, which charted a period of significant progress.

Key was the publication of the definitive feasibility study (DFS) of the project in March, which underscored its huge potential.

The DFS assigned a US$27bn net present value to the planned mine, which will have the capacity to generate earnings of US$1-3bn a year.

Also among the highlights for the six month trading period ended June 30 was the selection of preferred construction partners - Associated Mining Construction and Hochtief Murphy.

Meanwhile, a series of off-take agreements, including a deal with China’s Yunnan Dian Huang Peony Industrial Group, has provided third party validation of the North Yorkshire Project.

"It has been another period of progress for Sirius, during which time we have successfully secured the final major approval for our important project and set the platform for the advancement of our financing strategy," said Sirius chief executive Chris Fraser.

Post the period end, Sirius has received approval for harbour facilities on Teesside that would handle exports.

As is common with companies at this formative stage of development, the company was loss-making (to the tune of £4.1mln). Cash resources as at June 30 were £16.9mln, down from £25.1mln at the end of December.

The net assets of the group currently stand at around £161.7mln.

Quick facts: Sirius Minerals PLC

Price: 3.508 GBX

LSE:SXX
Market: LSE
Market Cap: £246.24 m
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