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Sirius Minerals announces 2017 results

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World Fertilizer,

Sirius Minerals Plc has announced its results for the year ended 31 December 2017.

The CEO of the company, Chris Fraser, said: “Our world class project based in North Yorkshire has the potential to disrupt the global fertilizer market and contribute substantially to the UK economy.

“We achieved a number of important performance milestones in 2017, with commencement of construction, incremental supply agreements signed, bringing the total to 4.4 million tpy, a move to the London Stock Exchanges' Main Market and inclusion in the FTSE250 amongst the highlights.

“We continue to innovate and work hard on all aspects of our project to secure value for shareholders and are focused on ensuring 2018 will be another year of significant progress on all fronts, as demonstrated by our recent shaft sinking contract.”

Sirius claims that enablement works have been completed for the Woodsmith Mine, and the formal commencement of development notice has been issued by the local planning authority. In addition to this, the company claims that site preparation and establishment works at the Woodsmith Mine site and Lockwood Beck are complete. Optimisation of the shaft construction and design has also reportedly resulted in a simpler design and construction methodology and reduced surface footprint. Sirius also claims that shaft sinking activities have commenced and diaphragm walling activities are progressing well, with three rigs operating on the service shaft foreshaft.

Sirius also claims that last year it expanded the breadth and depth of its global agronomy program, starting 80 new agronomy trials. The program now includes more than 260 trails on 32 crops in 17 different countries, demonstrating that POLY4 delivers excellent nutrient uptake and increases both yield and quality. In addition to this, Sirius claims that a binding take-or-pay supply agreement was signed with Wilmar International, which is one of the largest fertilizer buyers and distributors in southeast Asia, for the use and resale of POLY4 exclusively in southeast Asia.

At the end of December 2017, Sirius claims that cash resources were £468.5 million, comprising bank deposits and cash equivalents of £394 million and restricted cash of £74.5 million. This is compared to £665.3 million at the end of December 2016. Because of IFRS fair valuation requirements relating to elements of the stage 1 financing, the 22% increase in the company’s share price over the course of the year has caused a total loss of £78.9 million being recorded for the full year. The fair valuation adjustments driving the loss are non-cash in nature. Sirius also claims that total funds deployed in developing the project during 2017 before financing costs were £197.3 million.

In the results, Sirius Minerals also provided its outlook for this year, claiming that 2018 will be another successful year, ultimately leading to the completion of the stage 2 financing. This year, the company expects to complete main service shaft foreshaft construction and excavation, as well as the installation of the main production shaft foreshaft. It also expects to commence foreshaft excavation, as well as mineral transport system (MTS) access shaft construction at the Woodsmith Mine site. Sirius also claims that it is planning to largely complete construction of the MTS portal at Wilton, and is aiming to commence shaft sinking at Lockwood Beck intermediate shaft site, as well as commence early works for the materials handling facility. The company is also expecting to finalise harbour facility strategy and complete procurement.

This year, Sirius also claims that it is looking to expand its global agronomy program and establish an additional 80 trials. It is also looking to execute 2 million tpy incremental supply agreements. In addition to this, Sirius claims that it is looking to substantially complete project procurement, drawn down the stage 1 financing royalty instrument and execute stage 2 financing.

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