Sirius Minerals Plc, Scarborough, England, reported this week that it is on track to complete the US$3.8 billion stage 2 financing launched on April 30 to fund its North Yorkshire polyhalite mine and processing plant project to completion before the end of September this year (GM May 3, p. 1).
The company already has raised US$825 million from investors via a firm placing and open offer of ordinary shares for US$425 million and through an offering of guaranteed convertible bonds due 2027 for new gross proceeds of US$400 million.
Sirius said the rest of the funding, comprising a US$500 million bond that would unlock a US$2.5 billion revolving credit facility from JP Morgan Securities LLC, remains on track to complete before the end of September this year.
That credit facility is contingent upon the completion of the full US$500 million bond issue before Oct. 30, 2019 (GM May 3, p. 1). While J.P. Morgan would endeavor to procure purchasers for the full US$500 million of these initial bonds, it would not be under any obligation to acquire any for which it cannot procure purchasers. As a result, Sirius said earlier it does not have any certainty that it will receive the full US$500 million of gross proceeds of the initial bonds.
The three main elements that need to be in place ahead of the launching of the bond are finalizing the bond offering document, completion of the revolving credit facility paperwork, and the receipt of a public rating from the rating agencies. But Sirius said it is making “good progress” on all the necessary workstreams connected with the proposed bond issuance and entry into the proposed revolving credit facility.
Meanwhile, the company confirmed that construction is advancing well at its North Yorkshire polyhalite project and remains on track to produce its first polyhalite in 2021 and commercial production on time and in line with its cost schedule.
Sirius now has offtake deals in place with total peak aggregate volumes under contract at 11.7 million mt/y – or 13.4 million mt/y when customer volume options are included. Its most recent deal was a take-or-pay supply agreement with Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) for the supply of Poly4 in India, signed last month (GM June 14, p. 1). Volumes under the agreement with IFFCO will ramp up to 1 million mt/y in year eight of the 11-year term, with an option, subject to mutual agreement of the parties, to increase this by an additional 250,000 mt/y to 1.25 million.