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Sirius Minerals release half year results

Published by , Assistant Editor
World Fertilizer,

Sirius Minerals Plc has announced the unaudited half year results for Sirius and its subsidiaries (the "Group") for the six-month period ended 30 June 2018.

Business review
  • The Project remains on track to deliver first polyhalite and commercial production on time.
  • Construction activities during the period progressed in line with 2018 guidance.
  • Design and build contract signed with DMC Mining Services for the four shafts required for the project.
  • Design and build contract signed with STRABAG for Drive 1 of the mineral transport system ("MTS").
Financial review
  • Operating loss for the period was £10.8 million compared to £14.7 million in the prior corresponding period, with the reduced loss being driven by a reduction in certain one-off charges incurred in 2017.
  • Total loss of £95.3 million compared to a loss of £151.3 million for the equivalent six-month period in 2017. The main driver of the loss is the fair value re-measurement of the derivatives associated with the convertible loans and, to a lesser extent, the equity component of the royalty financing agreement. £148 million deployed during the period for the purposes of developing the project.
  • Total funds at the end of June 2018 were £323.4 million, comprising bank deposits and cash equivalents of £263.7 million and restricted cash of £59.7 million.
  • A conversion invitation to bondholders in the Company on 11 April resulted in the conversion of US$63.8 million in aggregate principal amount of bonds.
Post balance sheet events
  • Materials handling agreement and long-term lease of land agreement signed with Redcar Bulk Terminal Limited.
  • Design and build contract signed with STRABAG for the remaining drives of the MTS tunnel.
  • EPC contract with Jacobs UK Limited for the materials handling facility at Wilton.
  • 2.5 million tpy peak aggregate volume supply agreement signed for the key markets in South America including Brazil.
  • Acquisition of 30% equity interest in the Cibra Group Companies for 95 million ordinary shares in Sirius.
  • The announcement of a revised stage 2 capital funding requirement of US$3.4 billion - US$3.6 billion.
  • Hancock royalty funding of US$250 million, agreed as part of stage 1 financing, received.

Chris Fraser, Managing Director and CEO of Sirius commented:

"Construction activities at our sites continue at pace and significant milestones have been achieved in the first half of the year, such as breaking ground at Wilton. This, combined with excellent progress to our procurement process, has ensured the project remains on track to deliver first polyhalite production on time in 2021.

"Post the balance sheet date we have finalised the major procurement packages for the project and are diligently reviewing the most appropriate form of financing to cover the revised capital funding requirement increase of between US$400 million to US$600 million, to complement the successful delivery of stage 2 financing.

"Since the period end and in line with the schedule set out in our full year results, we have received US$250 million from our stage 1 royalty financing instrument with Hancock to fund project progress in advance of stage 2 financing.

"I want to thank all our employees, contract partners, shareholders, and supporters for their continued confidence in the Project and its long-term market potential."

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