The company behind plans to build a new potash mine between Whitby and Scarborough is to raise £50m through a share placing to accelerate the drilling programme at the site.
Sirius Minerals said the proceeds will help fund the drilling of up to eight extra bore holes at the York Potash Project.
The money will also fund a detailed scoping study, to be carried out in March, and pilot plant programmes to select and develop the preferred process route for the project.
The funding will see the project through to the Definitive Feasibility Study and will help secure options over additional mineral and land rights.
Russell Scrimshaw, chairman of Sirius, has indicated his intention to subscribe for £3.4m of placing shares. Chris Fraser, Sirius chief executive, said: “Following on from the very encouraging results from our first two new holes and the evidence from the second hole that it may be possible to develop the mine with a lower cost shaft than had originally been envisaged, we are keen to further accelerate the project’s development programme.
“With the backdrop of continuing uncertainty in global markets we have decided to raise all of the funding necessary to take the York Potash Project through to the completion of its Definitive Feasibility Study.
“This will allow us to fast-track the project development without any funding constraints so that the project can be brought into production as soon as possi- ble.”
Since the acquisition of the York Potash Project in January 2011, Sirius has drilled two boreholes and confirmed the presence of the three seams of potash mineralisation.
As a result of the better than expected results, the company has looked at ways to accelerate the project.
Last week, Sirius appointed former business secretary Lord Hutton to its board.
The former cabinet minister replaces Richard Poulden as a non-executive director of Sirius Minerals.
Sirius believes that the proposed new mine could lead to the creation of around 5,000 jobs, with approximately 1,000 skilled jobs required for the mining operations itself.
A further 4,000 are anticipated to be created in the wider economy as a result.
No location for a potential minehead has yet been identified as the drilling phase is required first to establish the underground conditions.
The project area is broadly in the area between Scarborough and Whitby.
Two weeks ago Sirius said it had encountered further fluid loss zones at a test hole in its new deep mine, delaying its progress.
The group said the delays were an inevitable part of the drilling process.