UK potash hunter Sirius to raise £50mn

IRJ – January 27 – London-listed multi-project miner Sirius Minerals Plc. (AIM: SXX.L) is to raise funds of approximately £50 million to fast-track its York potash project through to definitive feasibility study (DFS) in the northern U.K. county of Yorkshire, Friday.

Sirius’ chairman Russell Scrimshaw—of Perth-based iron ore giant Fortescue Metals Group—will subscribe around £3.4 million. The remaining funds, the company states, will be raised through institutional investment houses via book-building conducted by Macquarie and Liberum Capital.

After a second borehole at the York project suggested that it is possible for Sirius to develop the project using lower cost shaft plans, the company elected to raise funds despite ongoing market fragility. In fact, according to chief executive Chris Fraser, capital conditions played a part in convincing the executive team to act on financing now.

“This will allow us to fast-track the project development without any funding constraints so that the project can be brought into production as soon as possible,” he stated.

In addition to taking the York project to DFS and drilling up to 8 additional bore holes, Sirius also plans to use the funding to advance its detailed scoping study on the project, set for completion in March 2012, according to press reports. The company’s project development track looks swift from thereon in; including plans to announce a maiden resource in April 2012, complete testwork and pilot plant programmes, finish the DFS and tie up land rights.

Sirius states that historical data suggests that the York project houses, ‘the world's largest and richest deposit of Polyhalite, as well as world-class Potassium Chloride’.

‘Sirius believes that the York Potash Project could be developed as one of the world's largest low-cost SOP [Sulphate of Potash] producers, fulfilling our mission to become the world's New Potash Powerhouse,” the company says.

In addition to the York project, Sirius also has exploration plays in North America, and Australia.

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