Sirius Minerals Plc (LON:SXX) provides today its quarterly update on the development of its North Yorkshire polyhalite project (the “Project”) for the first quarter of 2017.
Chris Fraser, Managing Director and CEO of Sirius, comments: “It has been a productive quarter with timely progress made on site preparation works in advance of shaft sinking commencing in quarter three. The team on site and at our headquarters has grown considerably as we continue with the delivery of the Woodsmith Mine and its associated infrastructure.”
No recordable incidents were incurred during the period. As on-ground activities intensify, safety vigilance becomes even more important and the Company’s project team continues to increase its focus on safety matters as construction ramps up.
Cost and schedule
The project remains on budget and on schedule.
The Company continues to evaluate opportunities to accelerate components of the shaft and tunnel spend to further de-risk the implementation of the construction project, and potentially create opportunities for shortening the Project schedule. Some shaft design optimisations have now been incorporated into the development plan and options to bring tunnelling activities forward are in commercial discussion with the preferred tunnelling contractor.
Negotiations are nearing completion with AMC for the broader shaft sinking design and build contract. The contract is expected to be executed in early Q3 2017 on terms consistent with those previously articulated to the market. The Company is in discussions with the Hochtief Murphy Joint Venture in relation to agreements for early works activities which will form the foundation of the broader tunnelling programme.
On 4 May 2017, the Company was issued with its formal commencement of development notice from the North York Moors National Park Authority. The Company continues to make good progress in clearing conditions required in advance of its rolling work programme.
Highways works around the Woodsmith Mine are complete. Site access and initial ground water protection work is complete. The main internal site access road has been laid and surfacing work is nearing completion. The extension of the mine head platforms has commenced and the foundations for the on-site concrete batch plant are being built. All tasks that require completion in advance of the commencement of initial shaft sinking activities are on schedule.
Site preparation activities have commenced at Lockwood Beck – the site for an intermediate shaft for the mineral transport system. This has included enablement highways works and general groundworks to support future shaft sinking.
The production shaft borehole is progressing with coring and testing completed to the 840m level. The near surface geotechnical programme has now been completed and the results are being analysed and incorporated into the mine development design. A programme of boreholes and seismic work to support the MTS design work has commenced. Geotechnical drilling to help inform the shaft design at Lockwood Beck is also underway.
AMC is continuing detailed design of the shafts with a focus on completing the foreshaft component of the scope. Diaphragm walling rigs are due to be mobilised to site in the third quarter of 2017 to commence work. Planning for securing the winding equipment required for main shaft sinking activities has been completed and delivery of the equipment is on schedule. The contractor continues to expand its implementation team in the UK. The AMC team in the UK is co-located in the Sirius’ office and a strong working relationship is being developed.
Sales and marketing
Commercial discussions remain ongoing in the key growth markets of Europe, Brazil, South East Asia and Africa. Each of these opportunities represents material volume opportunities in major long-term markets for Sirius. The Company is encouraged by the increasing market interest and positive engagement from multiple parties in these key markets.
The agronomy programme continues to validate the four cornerstones of the POLY4 value proposition: efficiency, effectiveness, flexibility and sustainability. During the quarter, 15 trials were completed and are being processed and 20 new trials were commenced on barley, cabbage, chilli peppers, corn, soybean, cotton, grape, grasslands, onion, potato, rice, tobacco, tomato and turf in Brazil, China, India, Ireland, UK and United States.
The Company has obtained a Premium Listing on the London Stock Exchange and was recently added to the FTSE 250 index. Focus is now on planning and preparation for the stage 2 financing process.
The Sirius Minerals Foundation (renamed from the York Potash Foundation), the independent charity set up as a community fund in 2012 to spend a share of revenues from Sirius Minerals’ Woodsmith Mine, has launched its first grant programme. This is after receiving its first funding of £2 million from the Company. In the first funding year, the trustees of the Foundation are prioritising an initial grant giving programme of awards between £500 and £5,000. This first programme is intended to help assess initial interest in funding initiatives throughout the Project area.
Sirius Minerals Plc also provides notification that a block listing application has been made to the London Stock Exchange and Financial Conduct Authority for the admission to trading on its main market for listed securities of up to 300,000,000 ordinary shares in the Company (the “Block Listing Shares”).
The Block Listing Shares relate to the convertible bonds issued by Sirius Minerals Finance Limited during the Company’s stage 1 financing. The convertible bonds, due 2023, which were issued at US$200,000 each and raised US$400 million, were announced on 3 November 2016 (RNS number 2246O).
Block Listing Shares will be issued from time to time pursuant to the conversion of bonds. The Company will update the total shares on issue on its website on a regular basis and the market will be updated on the total number shares listed under the block listing scheme every 6 months.
The Block Listing Shares will rank pari passu in all respects with all existing ordinary shares in the Company. It is expected that the block admission will become effective on 30 June 2017.