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Released November 26, 2019 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Sirius Minerals (Scarborough, England) has proposed new funding plans to get its giant £3 billion ($3.9 billion) U.K. potash mine project off the ground after failing to secure Stage 2 round investment and government backing earlier this year.
The company said that development work across the project at the Woodsmith mine complex near Whitby in Yorkshire is now "slowed to allow for a six-month strategic review period, funded by existing cash resources." The area contains the largest, highest-grade resource of polyhalite in the world, Sirius stated, measured at 2.66 billion tonnes according to the internationally recognised JORC code.
The goal is still to achieve first polyhalite "as soon as possible." probably in 2021, in order to lessen the project's risk profile associated with deep shaft construction. However, the second phase, which was to ramp up to full production as quickly as possible by 2024 to generate returns for shareholders, is being revised. After first polyhalite, Sirius said in order to reduce the upfront capital requirements, consideration has been given to the "re-phasing and re-scoping of other works required." As a result, Sirius has confirmed that it is now in discussions with potential investors and is following a two-stage project development plan, splitting the funding. The first stage is seeking $600 million by the next March to finish the construction of the mineshafts at Woodsmith mine and the first section of tunnel only. Following this, an additional $2.5 billion will be raised for remaining infrastructure, including the rest of the tunnel and processing and shipping facilities at Teesside. It has also identified almost $370 million in cost savings by reconfiguring tunnelling and processing plans.
"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 $600 million," explained Chris Fraser, managing director and chief executive officer of Sirius. "The additional works required to reach an installed and ramped up production capacity of 10 million tonnes per annum (Mtpa) contemplates up to $2.5 billion of capital expenditure."
He added: "We are in discussions with potential strategic partners and debt investors with the aim of securing the best route to finance our revised initial scope of work and will update the market and our stakeholders on the progress of those when appropriate. The value of Sirius is unlocked by reaching production and delivering POLY4 to our customers around the world. This approach allows us to achieve that with less upfront capital while retaining the significant return opportunity it presents for our shareholders and stakeholders."
Industrial Info is tracking all of the key projects associated with the Woodsmith mine development plan. This includes sinking the shafts at Woodsmith Mine to access the polyhalite deposit, developing a 37-kilometre-long underground mineral transport system and constructing a materials handling facility in Teesside for granulating or chipping the mined material into the final product. There will also be harbour facilities comprising an approximately 3.5-kilometre-long overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The company said that development work across the project at the Woodsmith mine complex near Whitby in Yorkshire is now "slowed to allow for a six-month strategic review period, funded by existing cash resources." The area contains the largest, highest-grade resource of polyhalite in the world, Sirius stated, measured at 2.66 billion tonnes according to the internationally recognised JORC code.
The goal is still to achieve first polyhalite "as soon as possible." probably in 2021, in order to lessen the project's risk profile associated with deep shaft construction. However, the second phase, which was to ramp up to full production as quickly as possible by 2024 to generate returns for shareholders, is being revised. After first polyhalite, Sirius said in order to reduce the upfront capital requirements, consideration has been given to the "re-phasing and re-scoping of other works required." As a result, Sirius has confirmed that it is now in discussions with potential investors and is following a two-stage project development plan, splitting the funding. The first stage is seeking $600 million by the next March to finish the construction of the mineshafts at Woodsmith mine and the first section of tunnel only. Following this, an additional $2.5 billion will be raised for remaining infrastructure, including the rest of the tunnel and processing and shipping facilities at Teesside. It has also identified almost $370 million in cost savings by reconfiguring tunnelling and processing plans.
"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 $600 million," explained Chris Fraser, managing director and chief executive officer of Sirius. "The additional works required to reach an installed and ramped up production capacity of 10 million tonnes per annum (Mtpa) contemplates up to $2.5 billion of capital expenditure."
He added: "We are in discussions with potential strategic partners and debt investors with the aim of securing the best route to finance our revised initial scope of work and will update the market and our stakeholders on the progress of those when appropriate. The value of Sirius is unlocked by reaching production and delivering POLY4 to our customers around the world. This approach allows us to achieve that with less upfront capital while retaining the significant return opportunity it presents for our shareholders and stakeholders."
Industrial Info is tracking all of the key projects associated with the Woodsmith mine development plan. This includes sinking the shafts at Woodsmith Mine to access the polyhalite deposit, developing a 37-kilometre-long underground mineral transport system and constructing a materials handling facility in Teesside for granulating or chipping the mined material into the final product. There will also be harbour facilities comprising an approximately 3.5-kilometre-long overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
