viewSirius Minerals PLC

Sirius Minerals aims to finish strategic review by end of October

The fertilizer miner has cut a quarter of jobs at its North Yorkshire mine as it looks to preserve funds

Sirius Minerals PLC -

Sirius Minerals PLC (LON:SXX) has cut hundreds of jobs at its Woodsmith mine and aims to have a good idea of alternative funding options by the end of October.

Last month, the company failed to get a US$500mln high-yield bond issue away, citing market conditions.

Sirius, which is in the early stages of developing the Woodsmith potash mine under the North Yorkshire moors, said at the time that it had enough cash to keep going for about six months as it carries out a strategic review.

READ: Odds of Sirius Minerals mine going into production lengthen significantly, says German bank

Confident that such a review could be completed by the end of this month, boss Chris Fraser told The Times newspaper that one option could be to raise a much smaller sum to fund construction of the parts of the mine that the bond markets were most worried about.

Fraser, who said that 300 staff had been axed, told the newspaper that saw the strategic review taking around six weeks and there would be around another six months to carry out the resulting plans.

With 900 employees still in place, Sirius said it was keeping the bull of its workforce so the project was "ready to go" as soon as a solution was found.

Cash savings

When the bond issue failed last month, Sirius had to return $400mln of previously raised funds and was also unable to tap an anticipated US$2.5bn credit facility, which was part of a plan that required roughly $3.8bn to be spent over two years.

Fraser now says that rather than working at breakneck speed, the company would look to lower spend, including possibly doing away with a third tunnelling machine.

In terms of finance, he said Sirius was looking at getting separate funding to for the elements of the mine that the project finance banks and bond market were “least comfortable with”, such as the construction of deep mine shafts, before financing other parts with lower perceived risks separately.

A spokesperson said other options on the table could include using the initial part of the underground tunnel to extract what minerals are available and selling it, while there was also the possibility of teaming up with a "strategic partner".

Quick facts: Sirius Minerals PLC

Price: 3.548 GBX

Market: LSE
Market Cap: £2.49 m

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