Sirius Minerals has reported solid progress at its £10bn North Yorkshire polyhalite mine and said site preparation is well advanced.
The firm, which was recently promoted to the FTSE 250, said the project is on time and on budget as it looks at ways to accelerate construction of the mine.
Enabling works at the Woodsmith Mine, which is set to bring around 1,000 jobs to North Yorkshire, are now complete and diaphragm walling activities are scheduled to start this autumn.
Chris Fraser, managing director and CEO of Sirius, said: “It has been a productive quarter with timely progress made on site preparation works in advance of shaft sinking commencing in quarter three.
“The team on site and at our headquarters has grown considerably as we continue with the delivery of the Woodsmith Mine and its associated infrastructure.”
The group said that as on-ground activities intensify, safety vigilance has become even more important and the company’s project team is increasing its focus on safety matters as construction ramps up. No recordable incidents occurred over the past three months.
Negotiations are nearing completion with AMC for the broader shaft sinking design and build contract. Sirius is also in discussions with the Hochtief Murphy Joint Venture about agreements for early works activities which will form the foundation of the broader tunnelling programme.
Last month Sirius received a formal commencement of development notice from the North York Moors National Park Authority. The firm said it is making good progress in clearing conditions that are required in advance of its work programme.
It said that highways works around the Woodsmith Mine are complete and site access and initial ground water protection work has also been carried out. The main internal site access road has been laid and surfacing work is nearing completion.
Site preparation activities have also started at Lockwood Beck - the site for an intermediate shaft for the mineral transport system.
Analyst Yuen Low at Shore Capital reiterated his “buy“ recommendation on the stock.
“While Sirius is currently at development stage and still some years from becoming a cash flow-generating company, an investment in Sirius should become progressively de-risked and enjoy significant value uplift as it advances towards production,” he said.
He thinks the shares, which have been trading at 32p to 33p, are worth between 65p and 82.5p.
Sirius said the production shaft borehole is progressing with coring and testing completed to the 840m level.
The near surface geotechnical programme has been completed and the results are being incorporated into the mine design.
Diaphragm walling rigs are due to be mobilised in the third quarter of 2017 while planning for securing the winding equipment required for main shaft sinking activities has been completed and delivery of the equipment is on schedule. The AMC team is co-located in the Sirius office and the firms said they are developing a strong working relationship.
Commercial discussions are ongoing in the group’s key growth markets of Europe, Brazil, South East Asia and Africa.
Sirius said these four regions offer material opportunities for the group and it is encouraged by increasing market interest and positive engagement from a number of parties in these markets.
The group is working hard to get scientific proof that its polyhalite is superior to rivals’ and over the past three months it has completed 15 trials and started 20 new trials on barley, cabbage, chilli peppers, corn, soybean, cotton, grape, grasslands, onion, potato, rice, tobacco, tomato and turf in Brazil, China, India, Ireland, UK and the US.
Sirius Minerals is a fertiliser development company focused on the construction and development of its North Yorkshire polyhalite project.
It believes the project represents the world's largest high-grade known deposit of polyhalite, a multi-nutrient form of potash containing potassium, sulphur, magnesium and calcium.
Incorporated in 2003, Sirius Minerals' shares are traded on the London Stock Exchange's main market.