Sirius forges ahead with £10bn Yorkshire mine

'‹Sirius Minerals, the company behind the £10bn North Yorkshire polyhalite mine'‹, '‹said its £370m open offer for Stage 1 financing was "modestly oversubscribed" as it forges ahead with plans for the mine.

Sirius has a large number of private investors in North Yorkshire who are keen to see the mine succeed

Sirius' CEO ​Chris Fraser said:​ ​"I would like to thank our shareholders for their continuing support and playing their part in this important moment in the ​c​ompany's history.

​"​It has always been our intention to make this provision available and it's good to see so many existing shareholders taking part."

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A​nalysts​ said the 100 per cent take-up means the financing has now essentially been successfully completed ​and​ it is only conditional on obtaining shareholder approval at a general meeting that is being held this morning.

​Analyst​ ​Yuen Low​ ​at Shore Capital said: "Sirius has attracted myriad detractors and doubting Thomases over the years, who have tried to find fault with the company and its paradigm-shifting North Yorkshire project from virtually any and all conceivable angles (​for example​ that the global market for polyhalite would be a few hundred thousand tonnes at best, that permitting would be impossible, that the Stage 1 funding requirement was too large to be successfully raised).

​"​To its credit, Sirius has made its critics eat humble pie at every step of the way thus far, systematically proving false their claims (which in our view range from simply unresearched to maliciously poisonous).

​"​For example, it has 3.6Mtpa of take-or-pay offtake agreements in place (customer commitments of all degrees of ‘firmness’ total 8.1Mtpa), obtained all the key planning permits and as noted above, Stage 1 of the company’s two-stage construction financing plan is now essentially only conditional on obtaining shareholder approval - despite being undertaken in a turbulent market that saw a number of IPOs (Initial Public Offerings) being cancelled or postponed.​"

He added that the financing means there will​ be no further need to raise equity​ and​ reiterate​d​ ​his "buy" rating​ on the stock.​

Last month Sirius was boosted by the news that Australia’s richest woman ​wa​s investing £245m in ​the firm.

Hancock Prospecting, ​which is controlled by Australian billionaire iron ore magnate Gina Rinehart, said Sirius could become one of the world’s leading producers of multi-nutrient fertiliser and the mine could have a life of 100 years.

Sirius has a large number of private investors in North Yorkshire who are keen to see the mine succeed.

It will become a big employer in the region once the mine gets underway. Around 2,000 construction jobs will be created and a further 2,500 will be employed when the plant is fully operational, expected to be in 2021. Sirius will fire the starting gun on construction in January and, once completed, the mine will produce polyhalite, which can be used as a fertiliser.

Sirius, which has been given planning permission for the potash mine, has previously said the mine will deliver a huge boost to North Yorkshire and Teesside and could have a value of over £10bn, rising to £19bn when production starts.

It said that at full production, the mine’s annual contribution to UK GDP would be £2.3bn, with £2.5bn of exports helping to decrease the 2015 balance of trade deficit by 7 per cent.

The mine will produce 20 million tonnes of potash a year.

The mine’s potash is a multi-nutrient fertiliser called polyhalite, which is a naturally occurring mineral containing four of the six nutrients key to plant growth – potassium, sulphur, magnesium and calcium.

​On signing the deal, Ms Rinehart​ said:​ “This fits with my approach of investing in strategic areas for the long term, and I hope the product is of assistance to many Australian farmers.​"