York Potash bought in £25m deal
SIRIUS Minerals has bought York Potash in a deal that could lead to the opening of the first UK potash mine in 40 years and the creation of up to 5,000 jobs.
York Potash, founded last year, holds mineral rights on 600 sq km of land between Whitby and Scarborough.
Sirius Minerals is now set to explore the potential for a new potash mine in the area which it believes could create 1,500 development and construction jobs and 1,000 operational jobs in the mine as well as supporting hundreds more in the supply chain.
The shareholders in York Potash will receive 150m ordinary shares in Sirius in a deal which values York Potash at £25m and also sees its founder Chris Fraser become managing director and chief executive of Sirius.
Mr Fraser said: “Demand for potash is undergoing significant growth. Potash is an essential component in the fertilizers that we all rely on for cost effective food production.
“The York Potash project, subject to successful testing, could become a new and strategically important potash mine for the UK. This will help the UK to meet its own needs, giving it security of supply and, importantly, creating a project of local, regional and national economic significance.
“Today’s announcement is just one step on a longer journey but we are confident that our vision for a high-quality, modern and efficient potash mine in North Yorkshire can be achieved and would deliver an asset of true national importance.”
The project is still in its early stages but if it goes ahead Sirius estimates potash could be extracted from the new mine for 50 years.
Sirius chairman Chris Catlow said: “The York Potash Project has the potential to make Sirius one of the world’s most important suppliers of potash. With the potential to produce several millions of tonnes annually of sulphate of potash, the premium potash product, the York Potash project could generate significant value for all stakeholders.
“Furthermore, the acquisition is fully aligned with our strategy of acquiring major projects overlying known potash targets in politically stable environments. The platform we now have for stakeholder value creation is very impressive and, we believe, unmatched by our peers.”
“I am also delighted that Chris has agreed to join Sirius as our managing director and CEO – this is a key value-add aspect of the acquisition. Chris has proven entrepreneurial abilities in the resources industry and has a clear track record in raising large amounts of capital for major strategic project developments – not least for Fortescue Metals. He has the vision, energy, skills and experience to deliver significant value for Sirius and lead the company into the future.”
York Potash was founded last year and has yet to submit formal accounts but its latest management accounts show liabilities of £144,000 and an operating loss of £362,000 for the period to January 11.
