Sirius Minerals PLC (LON:SXX) has made the breakthrough in financing the build of its giant fertiliser mine in North Yorkshire the market has been waiting for.
In total it has lined up investment of up to US$1.2bn from three separate sources.
Part of it we already knew about: the US$300mln royalty deal with an offshoot of mining billionaire Gina Rinehart’s Hancock Prospecting.
READ: Today's announcement in full
WATCH: What we said about the Hancock deal
Investors will be asked to fork out up to US$490mln (£330-£400mln) in a fully underwritten placing and open offer, while a convertible bond issue will bring in US$400-$450mln.
The raise is the first stage in a two-part programme that will take the North Yorkshire project into production at an initial 10mln tonnes of polyhalite fertiliser per year. After that there are plans to double output.
This first tranche of cash will finance the cost of all site preparation, mine shaft excavations, tunnel caverns and the money is expected to be spent in three years. The second round of fundraising will bring in a further US$1.8bn.
Chief executive Chris Fraser said: “It's been a long journey to this point, and we still have some way to go, but I want to thank everyone who has supported the company in its efforts to reach this major milestone.
“Once we have received shareholder approval, we want to get on with the job of delivering this compelling value proposition, not only for our shareholders but also for the North Yorkshire community."
Yuen Low, analyst at Shore Capital, in a note today said: “an investment in Sirius will become progressively de-risked and should enjoy significant value uplift as it advances towards production.”