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Half Year Report From Company Behind Potash Mine Near Whitby

Half Year Report From Company Behind Potash Mine Near Whitby

Published by Karen Liu at 7:47am 17th September 2019. (Updated at 9:39am 17th September 2019)

The company behind the Potash mine near Whitby has published its half year report.

Sirius Minerals says its six month period ended on the 30th June 2019.

The report says:

"Business review

  • Significant progress made across all construction sites and construction activities to date have progressed in line with 2019 full year guidance 
  • 10-year supply and distribution agreement with BayWa Agri Supply and Trade B.V. for up to 2.5 Mtpa POLY4 in Europe
  • Major 8-year take-or-pay supply agreement with IFFCO for the supply of up to 1 Mtpa POLY4 in India

Financial review

  • Operating loss for the period was £14.3m compared to £10.8m in the prior corresponding period, the increase primarily driven by a greater level of corporate and sales and marketing costs linked to the Company's Stage 2 Financing.
  • Loss for the financial period of £3.1m compared to a loss of £95.3m for the prior corresponding period, the reduction primarily driven by fair value gains attributable to derivative instruments in comparison to the fair losses incurred on these in the prior period. 
  • £240m deployed during the period for the purposes of developing the Project. 
  • Total funds at the end of June 2019 were £713.8m, comprising cash and cash equivalents of £349.0m and restricted cash of £364.8m and has reduced to $180m (£117m uncommitted) as at 31 August 2019."

For its Stage 2 Financing, it said:

On the 6 August 2019, the Company announced that it had decided to suspend the proposed offer by its wholly owned subsidiary of $500 million of senior secured notes due 2028, due to prevailing market conditions. The offer was to form part of the Group's Stage 2 Financing. 

The Company has today announced that, as a result of global market conditions, the ongoing uncertainty surrounding Brexit and the political environment in the United Kingdom, the Company and its advisors believe that a senior secured notes offering in compliance with the terms of the revolving credit facility commitment letter provided by JP Morgan is now unlikely to be achievable.

The Company has therefore today announced that the scope of construction activities on the project will now be adjusted while the Company undertakes a strategic review of its options.

The Board considers that a reduced pace of development focused on key areas of the project that will ultimately serve to preserve the most value for the project will provide the Company with a period of up to six months to review all available options for the Company to move forward.  

The Group will need to secure additional external financing in order to allow it to continue operations after 31 March 2020.

You can read the full report here: https://otp.tools.investis.com/clients/uk/sirius_minerals/rns/regulatory-story.aspx?cid=485&newsid=1329395&culture=en-GB

On the opening of its shares this morning, it was as low as 2 pence. 

Comments

There is 1 comment on this page.

Ian Dixon, on 17th September 2019 11:09am
I campaigned from the start for this Project, attending many public meetings, council meetings and putting letters to our local papers. I now wonder why ?
A lot of locals like myself bought the shares, truly believing in the Project.
Now we have seen our investment collapse.
I bet the top brass will still be okay though if it collapses !

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