Financing - progress update

Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") provides an update on the financing for its North Yorkshire polyhalite project (the "Project").

The Company's financing plan was articulated in the announcement of 17 March 2016 and updated in the capital funding requirement reduction announcement of 24 June 2016. The Company continues to make good progress with its two stage financing plan.

Following a market sounding with potential senior debt lenders the Company has now mandated a group of six financial institutions experienced in mining and infrastructure project finance as Mandated Lead Arrangers (the "MLAs"). The MLAs - Export Development Canada ("EDC"), ING; J.P. Morgan; Lloyds Bank plc; Societe Generale, Corporate & Investment Banking; and The Royal Bank of Scotland Plc - have been mandated on the basis of a non-binding but mutually agreed term sheet, having undertaken initial due diligence of Project documents.

Once approved the Stage 2 financing is expected to comprise of aggregate senior debt facilities of up to US$2.6 billion (the "Facilities") to fund the Stage 2 capital funding requirement and costs relating to financing the Project. Financial close for the Facilities is expected to take place in 2018.

The Company expects the Facilities to be provided from a group of commercial banks, Export Credit Agencies ("ECAs") and other financing institutions (including the MLAs) with a component receiving the benefit of a HMT Guarantee to be provided under the UK Guarantee Scheme ("UKGS"). The MLAs will seek to arrange the Facilities and have indicated that they will fund up to US$700 million in aggregate of the Facilities. The initial marketing conducted by the Company indicated that further funds will be available above and beyond the amounts indicated by the MLAs.

The Infrastructure and Projects Authority ("IPA"), which was established in January 2016 by merging the Major Projects Authority with Infrastructure UK, and reports jointly to both HM Treasury ("HMT") and the Cabinet Office, has already prequalified the Project for consideration for a HMT Guarantee (announced 22 September 2015). IPA has discussed the Stage 2 financing plan with the Company and confirmed its interest in supporting the Stage 2 financing for the Project.

The appointment of the MLAs does not constitute an offer of financing or an underwritten commitment by the MLAs to provide financing. The MLAs' appointment is subject to market standard conditions including due diligence, credit and other business approvals, and execution of legal documentation acceptable to the MLAs. Similarly, IPA's prequalification does not constitute an offer of financing or an underwriting commitment. IPA requires its normal processes to be undertaken in addition to due diligence, such as satisfaction of conditions, HM Treasury credit process, risk committee, credit committee and ultimately Ministerial approval.

The Company intends to progress the Stage 2 financing, with the MLAs and IPA commencing detailed due diligence, following the successful completion of the Stage 1 financing. The Company continues to progress the Stage 1 financing and is in active discussion with a number of parties undertaking due diligence. The details of the Stage 1 capital structure and timing will be subject to further announcement at an appropriate time.

Chris Fraser Managing Director and CEO said:

"The Stage 2 senior debt financing is a major component of the total financing plan for the development of the Company's North Yorkshire polyhalite project. The progress to date provides a strong foundation of support for the Company to further expand on over the next two years to complete the full financing of a development that can generate so many positive economic benefits to the region and country as a whole.

"The Company is now focussed on the finalisation of the Stage 1 financing to enable construction to commence as soon as possible. This positive step on the senior debt financing should provide Stage 1 investors with greater clarity and confidence on the total financing of our world class fertilizer business."

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Are you tempted to cash in and wait for a bigger dip skinny? ......or looking at the bigger picture?

sold @ 39. 37 today more money wanted @ 35p will buy back in @ 30p ? BB

I'll hold these Harry - as I said, its not a massive holding and I'm busy elsewhere atm.

LLOY & REDD worthy of a look today.

Sirius Minerals makes funding progress

looking cheap right now

gla
http://www.telegraph.co.uk/business/2016/09/01/sirius-minerals-inches-closer-to-fertiliser-mine-in-north-york-m/

Will be cheaper, imo.

Had a small S/B today - now closed - another large volume day.

here we go - new 75p buy rating today
http://www.proactiveinvestors.co.uk/companies/stocktube/5527/sirius-minerals-making-impressive-progress-says-investec-s-wrathall-5527.html

A new upward move for Sirius Minerals?

Top riser in the market.

A bit oversold, but 30 was a logical support level. I saw figures somewhere that suggests exports when and if all comes to fruition of £2 billion annually. - something like 7% of annual exports.

Can Sirius Minerals see a fresh rally back to 50p highs?
Share
11:31 28 Sep 2016
Chart guru Zak Mir reckons it is a real possibility, and says 35p is the trigger for new buyers to watch out for.
POLY4, the polyhalite product that will be made from the the new mine in North Yorkshire.
Polyhalite helps increase yields for crops, now is Sirius ready to grow its share price again?
Sirius Minerals PLC’s (LON:SXX) valuation pushed above £1bn this summer as the British mine developer advanced to around 50p per share; it has since fallen back to the 30p level, but could a fresh rally be on the way?

Chart guru Zak Mir reckons it is a real possibility, and he says a ‘buy’ trigger of 35p is what traders should be looking out for.

If this trigger occurs the popular resource stock could again rally higher to ‘re-test’ the 50p per share level, he says. The rally would likely happen in the two months following the trigger, Mir added.

WATCH: Zak’s analysis right now

Sirius Minerals is currently working on the project financing for its world-class fertiliser asset in Yorkshire, where earlier this year it hit major milestones by securing planning permission approval for the project.

In early September Sirius confirmed that the window for all appeals against the company’s giant fertiliser mine had slammed shut.

It follows the closure of the judicial review period for the mine’s proposed harbour facility on Teesside.

“As a result of this, all key planning and development consent approvals for the company's North Yorkshire Polyhalite Project have therefore been received and all related judicial review periods have expired without any objections being tabled,” Sirius said in short stock exchange statement.

Now, the focus will turn to actually building a mine that will, initially, churn out 10mln tonnes of this nutrient-rich polyhalite material to be transported 23 miles underground to the shipping site mentioned above.

The cost of the initial development is put at £833mln (US$1.09bn) to get the company producing its first exports by 2021.

There is the potential then to double capacity for a similar cost.

The project financing will come from the debt market, although investors may have to dig in their pockets one last time for the initial phase of the mine development.

Share

Well it is ready now to move higher again, the 34p does not want to go on the offer so that is it 33.75 v 34.25p

I bought some under the offer price 34.25p

Time to pounce at the stock if there is money for it, at this point the retracement is done.

-

34.375p +0.375p

China on the market for potash?........

South China Morning Post - 06 October, 2016 Business/Commodities
Low potash stocks could push China into buying early supplies in fertilizer market

Dwindling inventories of the crop nutrient potash held by Chinese buyers could lead to an earlier 2017 sales contract with Canpotex Ltd, the offshore sales arm for Canadian mines operated by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc , the chief executive of Canpotex said.

Low potash stocks could push China into buying early supplies in fertilizer market

A late rally got the stock up to 35.50p +1.50p

Closing with a 35p UT

35.50p +2p

is moving out of the side ways with volume picking up a sign of further movement up on the next days, possible with news.

Volume the same as yesterday after 3 hours of trading

StockMarketWire.com
Sirius Minerals has entered into a royalty financing agreement for its North Yorkshire polyhalite project with Hancock British Holdings, a subsidiary of Hancock Prospecting Pty.

Under the agreement, Hancock has agreed to: purchase a royalty on the Project of 5% gross revenue on the first 13 million tonnes per annum (mtpa) of sales produced in each calendar year and 1 per cent for sales volumes above 13 mtpa in return for $250m.

It had also agreed that upon drawdown of the Royalty purchase amount, Hancock would subscribe for new ordinary shares in the Company in an amount of $50m, subject to certain conditions.

"The structure of the Royalty Financing Agreement is similar to that of the arrangements with mineral rights holders and runs for the life of the Project or 70 years, whichever is longer," said Sirius in a statement.

"The funding obligations of Hancock under the Royalty Financing Agreement are guaranteed by Hancock Prospecting Pty Ltd.

"The Royalty Financing Agreement is conditional upon the Company completing its Stage 1 financing (taking into consideration amounts received under the Royalty Financing Agreement) and two confirmatory due diligence items which will be satisfied prior to the Stage 1 financing being finalised.

"Once completed, drawdown of funds under the Royalty Financing Agreement is conditional on, inter alia, notice having been given to Hancock that the Company has expended $630 million of the total amount of its stage 1 financing; creation of the royalty interest including the granting of certain obligations and arrangements to secure such obligations in favour of Hancock, to ensure that the Royalty attaches to certain assets which comprise the Project; all material permits, commercial arrangements and authorisations for the Project remaining in place; and other drawdown conditions typical for an agreement of this nature."

35.50p +1.25p

Nice agreement and confidence on the company ( Australian mining billionaire Gina Rinehart's company to become an investor in and backer of fertiliser company).
Expect lots of positives views from the press on benefits to UK economy that the Government is trying to encourage ...............

Proactive Investor - -07:23 25 Oct 2016

Sirius Minerals strikes US$300mln deal with Gina Rinehart company
The pact with a subsidiary Gina Rhinehart’s Hancock Prospecting will form an important plank of the overall funding package for the AIM-listed group’s North Yorkshire Polyhalite Project.

Sirius Minerals PLC has signed a financing deal worth up to US$300mln with the company controlled by one of the world’s richest woman.

The pact with a subsidiary Gina Rhinehart’s Hancock Prospecting will form an important plank of the overall funding package for the AIM-listed group’s North Yorkshire Polyhalite Project.

Under the terms of the agreement, Hancock British Holdings is acquiring a 5% royalty on the first 13mln tonnes of fertiliser produced every year and 1% on anything over that output figure at a cost of US$250mln.

Hancock has also agreed to acquire US$50mln-worth of Sirius shares.

Hancock deal values Sirius Minerals Yorkshire project at US$3.9bn
Sirius Minerals seen as compelling for responsible investment
Time to be serious about Sirius?

The deal is subject to a number of conditions, the main one being Sirius must secure Stage-One funding for the mine, sited near Scarborough in Yorkshire, which is put at just over US$1.6bn.

The company said it is making good progress in this regard.

Chief executive Chris Fraser told investors: "We are delighted to have signed this agreement with such an experienced party in the mining industry, as well as one that has very successful and strong leadership and a long term and growing agricultural interest."

Hancock Prospecting owns the rights to large tracts of the Pilbara in Western Australia, the world’s largest iron ore deposit.

Rinehart, who is Australia’s richest person and owns almost 77% of the private company, took over it over from her late father and the firm’s founder, legendary prospector entrepreneur Lang Hancock.


Gina Rinehart with Indian Prime Minister Narendra Modi (left).

Shore Capital note today (last para is the important bit!):
"Sirius is developing the paradigm-shifting North Yorkshire polyhalite project (henceforth, ‘the project’) in England. The company has devised a two-stage construction financing plan, and the first pieces of Stage 1 have fallen into place today. Australian billionaire Gina Rinehart’s Hancock Prospecting has agreed to provide US$300m of the US$1.09bn Stage 1 requirement, comprising US$250m in royalty financing and US$50m in equity funding. We see this as a resounding endorsement of the project, given that Hancock (as Sirius puts it) is “such an experienced party in the mining industry and also one with a strong agricultural interest”.

· Equity investment would be concurrent with royalty drawdown: Hancock’s US$50m equity investment would occur concurrently with drawdown by Sirius of funds from the royalty financing. We understand from Sirius that the issue price will be determined following further progress with remainder of the Stage 1 financing package.

· Royalty equivalent to 3.6% on 20Mtpa: In return for providing US$250m, Hancock is to receive 5% of the gross revenue on the first 13Mtpa of sales for each calendar year, and 1% for any volumes above 13Mtpa (effectively, 3.6% on 20Mtpa at steady-state production). This will continue for the longer of the life of the project or 70 years. The royalty financing agreement is conditional upon completion of Stage 1 financing, and two confirmatory due diligence items that will be satisfied prior to the ‘remainder’ of the Stage 1 equity and structured capital raises being finalised.

· Confidence in production profile implied: The Hancock funds will become available once Sirius has expended US$630m of the total amount of the Stage 1 financing (the total includes the Hancock funds). The royalty returns an IRR (yield) of c.19-21% (depending on exact timing of drawdown) on our 20Mtpa 50-year ‘base case’. With 20% typically targeted by mining investors, this implies confidence in the production profile’s achievability, we believe.

· Good progress on two-stage financing plan: According to Sirius, “good progress” continues to be made on its two-stage financing plan. Details of (the remainder of) the Stage 1 capital structure and timing will be subject to further announcement “at an appropriate time.

We continue to anticipate the conclusion of Stage 1 financing during the autumn of 2016. If all goes to plan, there would be no further need to raise equity thereafter, dilution would cease to be a concern, and we believe the resulting improved clarity on potential equity returns could trigger a significant re-rating. While Sirius is currently at development stage and still some years from becoming a cash flow-generating company, an investment in Sirius will become progressively de-risked and should enjoy significant value uplift as it advances towards production, we believe. Our latest Risked NPV estimate is 70p/share post-Stage 1 financing (previously: 75p/share); we reiterate our BUY recommendation."