Sirius Minerals Releases Feasibility Study For North Yorkshire Polyhalite Project

Sirius Minerals (LSE:SXX) has released results of a feasibility study for its North Yorkshire polyhalite project. Highlights of results included an NPV of US$15 billion and an IRR of 26 percent.
As quoted in the press release, highlights included:

• DFS defines framework for production capacity of 20 million tonnes per annum (“Mtpa”) with initial installed capacity of 10Mtpa
• Project net present value (“NPV”) of US$15 billion today at a 10% discount rate
• Project NPV rising to US$27 billion upon commencement of production
• Project after-tax debt-free internal rate of return (“IRR”) of 26%
• Annual operational EBITDA ranging between US$1 and 3 billion through various volume and price outcomes
• High margin business model with average cash operating costs estimated at US$27.2 per tonne, delivering industry leading cash margins of 70 to 85%
• Two stage financing plan with stage 1 comprising US$1.63 billion and stage 2 comprising US$1.93 billion (total US$3.56 billion) for installation of 10Mtpa capacity
• Funding plans well developed to deliver tailored financing package
• First product expected in 2021 followed by completion of fit out and ramp-up with 10Mtpa rate anticipated in 2023

Sirius Managing Director, Chris Fraser, said:

The business that is created from this Project will sit as a world leader in the fertilizer industry based here in the UK.  It is expected to have a low operating cost structure, high margins and a very long asset life in one of the most business friendly, stable and dynamic economies in the world.
In delivering this Project we can create thousands of jobs in North Yorkshire and Teesside, deliver billions of pounds of investment to the UK and put the country at the forefront of the multi-nutrient fertilizer industry.
The DFS represents the blueprint to bring this global fertilizer business into large-scale production and successfully delivers on the core strategic vision of the Company to become a major low cost producer of multi-nutrient fertilizers.
Work is advancing with our financing partners globally to bring together the pieces of the initial financing of this Project.  This process is expected to take a number of months but certain parts of the early construction activity, such as highways upgrades, are commencing soon to facilitate an efficient start of the Project.

Click here for the full press release.