Sirius minerals has unveiled its new multi-million pound funding plans, as it seeks to get its £3bn polyhalite mine project back on track. The company announced its new funding plans to the stock exchange today (Monday 11 November), designed to get its multi-million pound mine over the finish line.

The company’s project development and financing strategies to date have been built around two key objectives; to achieve first polyhalite as soon as possible due to the transformative effect that this will have on the project's risk profile and, second, to be in a position to ramp up to full production as quickly as possible to generate returns for shareholders.  

This strategy required the company's former proposed Stage 2 Financing to be in place in order to continue to achieve its goals of first polyhalite by the end of 2021, and fully ramped up production in 2024.

However, the future of the massive project near Whitby in north Yorkshire was thrown into serious doubt in September, after it failed to secure initial funding and the government failed to step in with vital support.

The company subsequently announced that it would be slowing the pace of development on the project and undertaking a six-month strategic review to explore alternative financing solutions, including conducting a process with the aim of identifying and securing a strategic investor. 

Two months later, Sirius is now in discussions with potential investors and has produced a revised two-stage project development plan, splitting the funding for its huge development into two stages:

• Initially looking to raise $600m by the end of March next year, to complete the construction of the mineshafts at its Woodsmith mine near Whitby and first section of tunnel only.
• Subsequently raising an additional $2.5bn for remaining infrastructure, including the rest of the tunnel and processing and shipping facilities at Teesside.

Sirius also claim their strategic review demonstrates robust project values, with current project net present values for the 13Mtpa business case ranging from US $11bn to US $13bn, and internal rates of return ranging from 29% to 35% for a range of development scenarios, subject to successful financing.

Chris Fraser, managing director and CEO of Sirius, said: "Our focus during the first phase of the strategic review has been to reassess the best ways to unlock the value of our project for our shareholders, our community, the UK, and our customers all around the world.

"Our analysis has identified a two-stage development plan that enables us to achieve the key de-risking milestone of first polyhalite, when the service shaft reaches the polyhalite ore body, with an upfront capital requirement of $600m. The additional works required to reach an installed and ramped up production capacity of 10 Mtpa contemplates up to US $2.5 billion of capital expenditure.

“We are in discussions with potential strategic partners and debt investors with the aim of securing the best route to finance our revised initial scope of work and will update the market and our stakeholders on the progress of those when appropriate.

“The value of Sirius is unlocked by reaching production and delivering POLY4 to our customers around the world. This approach allows us to achieve that with less upfront capital while retaining the significant return opportunity it presents for our shareholders and stakeholders.

"I would like to thank our employees, contractors and partners for their continued focus and commitment, and recognise that the progress achieved on the ground in recent months remains a source of huge inspiration for the whole team.”

The company’s share price rose by more than 10% after this morning’s announcement, to around 3.6p. This compares to an all-time high of around 45p in 2016.