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Sirius slows mine development work as funding crisis prompts search for new development alternatives

Sirius still needs to raise significant sums if it is ever to get into production

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This product will not be hitting the market any time soon

Sirius Minerals PLC (LON:SXX) has slowed development work on its project in the north of England to allow for a six month strategic review period, funded by existing cash resources.

The thinking is that Sirius will develop the mine in stages now, or in what it calls “scopes”, thus limiting the requirement for one huge up-front funding package.

The first stage of development is likely to cost US$600mln.

As usual, the company has laid out the attractive nature of the economics of the project, but whether anyone will buy those numbers is another matter.

"Our analysis has identified a two-stage development plan that enables us to achieve the key de-risking milestone of first polyhalite, when the service shaft reaches the polyhalite ore body, with an upfront capital requirement of around US$600mln,” Sirius chief executive Chris Fraser said in a statement

“The additional works required to reach an installed and ramped up production capacity of 10 mln tonnes per annum contemplates up to US$2.5 billion of capital expenditure.”

Sirius’s shares have dropped precipitously over the past two years, having traded as high as 38p back in 2018.

In afternoon trading on Monday, Sirius shares had gained 10.4% at 3.528p.

 -- Updates share price --

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