Sirius secures financing of up to £25m

Sirius and its subsidiary York Potash first unveiled proposals for the North Yorkshire mining operation at the start of 2011.

Last month, Sirius asked the National Park Authority to defer a decision on the scheme, saying it needed more time to ensure the development would not harm the environment.

Chris Fraser, managing director and CEO of Sirius, said today: “We are delighted to secure this financing which demonstrates confidence in the ongoing development of the York Potash project, especially at a time of increased volatility in the sector.

“These funds will enable the company to undertake the necessary work needed to secure the required approvals, in addition to other development initiatives including global crop trials that will continue to demonstrate the unique value of polyhalite and de-risk the project.”

Under the agreement, the investor will inject up to £25m into the company by purchasing up to four tranches of interest free convertible securities, which are convertible into ordinary shares in the capital of the company. The first tranche is £10m with a face value of £11m.

The subsequent three tranches can be activated at 120 day intervals at the company’s discretion with a minimum of £1m with a face value of £1.1m and a maximum of £5m with a face value of £5.5m per tranche. Each convertible security will have a maturity of 18 months.