The FTSE 250 group is behind one of the biggest civil engineering projects currently being undertaken in Europe.
It is building the Woodsmith polyhalite fertiliser mine in North Yorkshire, which is 1.5km deep and requires a 37km-long underground conveyor belt to take the minerals from the mine to a processing facility.
Work on the initial construction is already underway and Sirius is now working with a global financial institution to close its US$3bn stage 2 financing package.
That is expected to complete by the end of this month (April) and will be used to fund the next stage of works at Woodsmith. Once it does close, Liberum believes it will trigger a re-rating of the stock.
“Sirius is now within weeks of its targeted closure of the US$3bn financing for the North Yorkshire polyhalite project,” said Liberum in a note to clients.
“Successful closure would eliminate what, in our view, is the largest component driving the current discount to net present value – financing risk.”
The analysts added: “With only construction risk standing between Sirius and first production, we would expect the shares to re-rate towards c.60% of our NPV range of 75p to 100p, depending on dilution.”
European offtake could drive shares higher
Another potential share price driver is a European offtake deal. Sirius already has major supply agreements in place with several industry players across four continents.
“Europe is the only major agricultural region without a major POLY4 supply agreement, and Sirius has noted it is in advanced discussions. A big player could be a share catalyst.”
Should Sirius manage to close the debt package and secure another offtake deal from a major European player, Liberum thinks shares could surge by 150% over the next 12 months to 50p.
Shares were down 0.6% to 20.1p on Tuesday.