Sirius Minerals PLC said this morning it is making significant headway with financing of the North Yorkshire Polyhalite Project.
The cost of the giant underground fertiliser mine is split two – US$1.63bn is needed to pay for the construction of the 10mln tonne per year fertiliser operation; US$1.93bn will bankroll the expansion to up to 20mln tonnes.
Thursday’s announcement concerned the latter portion, which Sirius calls the Stage 2 Financing.
It also revealed it is in “active discussion with a number of parties undertaking due diligence” for the initial sum, which will further hearten the market.
Sirius said it hopes to make a further announcement on progress with this first portion of money at the “appropriate time”.
In the meantime, the firm appears to be making headway the project debt required to kick on into the expansion phase. Although the headline cost is just shy of US$2bn, Sirius is actually looking for US$2.6bn.
The latest news is the group will be bringing on board six banks to help arrange around US$700mln of the required financing.
Sirius has recruited the following heavyweights of corporate lending: the Export Development Canada, ING, JP Morgan, Lloyds Bank, Societe Generale, Corporate & Investment Banking and The Royal Bank of Scotland.
It is expected that a component of the debt the debt will be covered the Treasury’s UK Guarantee Scheme.
This was set up during the credit squeeze when funds for large, long-term infrastructure projects was hard to come by and it ensures lenders are repaid in full irrespective of the project’s performance.
"The progress to date provides a strong foundation of support for the company to further expand on over the next two years to complete the full financing of a development that can generate so many positive economic benefits to the region and country as a whole,” said Sirius chief executive Chris Fraser.
"The company is now focussed on the finalisation of the Stage 1 financing to enable construction to commence as soon as possible. This positive step on the senior debt financing should provide Stage 1 investors with greater clarity and confidence on the total financing of our world-class fertiliser business."