Polyhalite Take or Pay Offtake Agreement
§ Take or pay offtake agreement for polyhalite sales from the York Potash Project signed with large
Central American fertilizer distributor
§ Annual contracted tonnage ramping up to 250,000 tonnes per annum over five years, with an option for
an additional 250,000 tonnes per annum
§ Five year contract from first commercial production with an option to extend for a further five years
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") are pleased to announce the signing of an additional binding take or pay offtake agreement ("the Agreement") for polyhalite from the York Potash Project.
The Agreement is with a well-established market leading Central American based fertilizer distributor that also has operations in Colombia (the "Customer").
The Agreement is structured to align with York Potash's proposed production ramp-up schedule. It is based on the supply of 150,000 tonnes per annum ("tpa") in the first year of the Agreement, rising on an annual stepped basis to 250,000 tpa in the fifth year of production. The Agreement is for five years from first commercial production and can be extended by mutual agreement for a further five years. In addition the Customer has also been given the option to increase the minimum amount of this contract by an additional 250,000 tpa.
The price to be paid pursuant to the Agreement is based on a formula linked to the market price of nutrients contained in polyhalite and is in line with previous market guidance.
This agreement will allow the Customer to distribute polyhalite through its various networks of local and regional companies to allow for servicing a greater range of farmers. The key regions for distribution include Guatemala, Belize, El Salvador, Nicaragua, Honduras, Costa Rica, Panama and Colombia.