Sirius announces $500m offering for construction of mine

Sirius Minerals, the company behind major potash mining plans in the North Yorkshire Moors, is offering $500m as part of its stage two financing plans to construct and develop the polyhalite mine.

The proceeds of the offering will be used, together with proceeds from the other elements of the stage two financing, to fund the construction and development of a polyhalite mine in line with project milestones to the point at which the project generates positive operating cash flows.

The company announced its second stage of fundraising earlier this year  and raised £327m through a placing of shares.

Sirius is looking to tap into what is thought to be the world’s largest deposit of polyhalite beneath the Yorkshire Moors National Park. It already has a mine near Whitby in North Yorkshire. However it will be a difficult and complex extraction process to extract the estimated 2.66 tonnes of multi-nutrient fertiliser.

If operations begin by 2021 as Sirius has suggested, two mine shafts will be used to help extract the potash, which will then be transported outside the National Park to Teeside via an underground tunnel for processing.

Sirius will ramp up production from 2021 when it plans to complete its Woodsmith Mine, the only deep mine to be sunk in Britain for the past 40 years. It says it is aiming for a production capacity of 10 million tonnes per year, up to 20 million tonnes per annum at its height. It has reportedly already agreed deals to deliver 8 million tonnes per year.

Permission was granted for mining to go ahead by the North York Moors National Park Authority in October 2015, but since then it has faced high costs getting the project off the ground. Last year Sirius announced it would need up to a further $600m to complete development of the project.

Earlier this year, Sirius announced that a “major global financial institution” had made an offer to fund the second phase of the Woodsmith Mine project.