The conditional proposal is for US$3 billion, which will be used to further develop the company’s flagship project — the Woodsmith mine.
UK-based potash developer Sirius Minerals (LSE:SXX,OTCQX:SRUXY) will advance development at its world-class potash mine in the UK after finally securing a backer for the multi-billion dollar project.
The conditional proposal from an unnamed major global financial institution is for US$3 billion, which will be used to further develop the company’s flagship project — the Woodsmith mine, located beneath a national park in North Yorkshire, United Kingdom.
Company shares were up by as much as 11.03 percent on Wednesday (March 13) following the announcement.
Sirius has been looking for additional financing for the project considered to be the “world’s largest and highest grade polyhalite deposit” for the past three years, and began developing the massive mine in 2017.
“The company believes that the alternative proposal potentially offers a more flexible and attractive solution to its stage 2 financing requirements and therefore it is pausing discussions with its existing prospective lenders to pursue the alternative proposal,” noted the statement.
In order to access the polyhalite resource, the complex project requires the sinking of two mine shafts to a depth of 1,600 meters, the development of a 37 kilometer long underground mineral transport system to process and produce the final product, and lastly, a harbor facility for export.
Much of the work is in various stages of completion as noted in Sirius’ Q4 2018 progress update released at the end of January.
When complete, the Woodsmith mine is expected to operate at 10 million tonnes per year by 2024, steadily ramping up to 20 million tonnes per year by 2029.
Polyhalite is part of the low-chloride potash family used as a fertilizer in the agricultural sector.
Sirius will now focus on, “working towards obtaining firm commitments for the alternative proposal and its additional financing requirements before the end of April 2019.”
Company shares were up 10.10 percent midday Wednesday (March 13), trading at GBX 19.88.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.