Sirius Minerals changes $3bn finance plan for North Yorkshire mine

Sirius Minerals has announced it is making progress in obtaining commitments for the $3bn debt component of its stage two financing plan for the potash mine project in Whitby.

The funding package of the polyhalite Woodsmith Mine has been changed to “modify the credit risk allocation” amongst its prospective lenders.

The original plan comprised two equal tranches of debt, one commercial bank tranche and one IPA guaranteed tranche.

The new structure now features three tranches of debt, totalling $3bn. The first tranche will be an uncovered debt capital markets tranche, the second a commercial bank tranche, followed by the third being the IPA guaranteed bond tranche.

The three new trenches will be linked to key construction milestones.

Sirius Minerals said: “This structure is designed to reduce both the risk and the quantum of any IPA guaranteed bond tranche to the taxpayer as by this time we will be past the major construction risks and POLY4 sales underway.”

At the Woodsmith Mine site, the service shaft foreshaft excavation has been completed at 44m and is expected to reach the final depth of 45m this month.  

Chris Fraser, managing director and CEO of Sirius, said: “2018 was a year of significant progress for the Company. Completion of procurement to support the stage 2 financing and the signing of an additional 4.8 Mtpa of take-or-pay supply agreements, have been substantial achievements.

“Considerable progress has been made across all our construction sites and development activities are advancing at pace. More than 800 people are now employed on the Project, demonstrating the transformational potential for jobs and growth in the local area.

“Executing our stage 2 financing plan remains our priority. We continue to make progress towards obtaining stage 2 financing commitments and are working constructively with all relevant parties to achieve this. The process with the lenders is continuing this quarter as we work through the due diligence reports with the lending group and progress discussions on the revised debt structure.”

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