The broker was responding to reports in the Israeli press that suggested ICL is mulling selling its Boulby muriate of potash (MOP)/polyhalite mine, situated some 12 miles away from Sirius’s Woodsmith minehead, near Whitby in the north-seat of England.
Shore Capital is not a fan of Sirius buying the ICL assets, “unless the price was really compelling” and ICL retained responsibility for any historical liabilities.
Buying the assets would provide Sirius with earlier production and cash flows than would otherwise be possible, albeit with the added operational risks entailed by Boulby’s generally aged infrastructure, Shore said.
That being said, some form of cooperation between the two companies could be a possible, Shore believes.
The broker has a ‘buy’ recommendation on Sirius Minerals.