Sirius Minerals PLC (LON: SXX) are seeking for a $600 million investment for a new flagship project from investors after reviewing plans, for financing its North Yorkshire potash mine, the largest project of its type in the world.
Shares of Sirius rallied 15.77% after the Monday morning announcement, and are trading at 3.7p. 11/11/19 10:25BST.
After seniority reviewed the project back in September, the conclusions that were reached meant that a $600 million investment was needed.
In order to achieve a production capacity of 10 million tonnes per annum, the project will require $2.5m in capital expenditure.
Commenting on the update, Neil Wilson, chief markets analyst for Markets.com, said that the plan would “require significantly less capital than the previous incarnation.”
He added: “A possible way out of the mire, but needs to be picked over in more detail.”
The mine will consist of a two 1.5km shafts drilled below the North York Moors National Park to access the world’s largest deposit of polyhalite, which is used in fertilisers.
The minerals and mining sector has been varied by firm, where Serabi (LON: SRB) saw their shares rally after a strong third quarter, London listed Antofagasta (LON: ANTO) have not been so successful after tough political conditions.
Additionally, big time Thor Mining (LON: THR) reported that their shares slipped even after a new discovery, showing the inconsistency in the market.
Group managing director and chief executive Chris Fraser welcomed the approach, saying:“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.”
Earlier this year, the project was thrown a curveball when Sirius was forced to scrap a $500m bond sale and pay back $400m from a separate sale to investors.
Chris Fraser said that an uncertain market, including concerns over Brexit, had impacted the company’s ability to raise the money it needed.
