Mining firm receives alternative financing proposal for scheme
Sirius sees new offer as more attractive
SIRIUS MINERALS, the company behind a giant mine that is set to transform North Yorkshire’s economy, yesterday announced that it had received a conditional proposal from a major global financial institution in respect of the second stage of its financing.
The Woodsmith Mine, near Whitby, is a £3.2bn capital investment project which is expected to generate £100bn for the UK economy over the next 50 years.
Apart from creating 1,000, long-term, skilled jobs, the project is also set to support 1,500 supply chain jobs.
In a statement, Sirius said: “The company has been pursuing a senior debt financing with a group of prospective lenders since 2016. This was most recently adjusted on January 22, 2019 to focus on a US$3bn multi-tranche structure.
The alternative proposal contains an alternative senior debt structure to completely replace that structure.
“The company believes that the alternative proposal potentially offers a more flexible and attractive solution to its stage two financing requirements and therefore it is pausing discussions with its existing prospective lenders to pursue the alternative proposal.
“A number of options for the additional non-senior debt financing requirement, as previously outlined in the company’s announcement of September 6, 2018, continue to be progressed.
“The company is working towards obtaining firm commitments for the alternative proposal and its additional financing requirements before the end of April 2019.
“The alternative proposal is subject to the finalisation of the financial institution’s due diligence and internal approvals.
“Further announcements will be made in due course.”
In a note, Shore Capital described the announcement as “very intriguing”.
The note continued: “Specifically, the alternative proposal comprises an alternative senior debt structure which would completely replace the three-tranche concept for raising US$3.0bn of senior debt that had been outlined by Sirius in January 2019.
“Encouragingly, the alternative proposal potentially offers a more flexible and attractive solution, according to Sirius.”
“All things considered, while Sirius is currently at development stage and still some years from becoming a cash flow-generating company, we believe that an investment in Sirius should become progressively de-risked and enjoy significant value uplift as it advances towards production.”
Bosses at Sirius Minerals believe the new mine in North Yorkshire will have a transformational impact on the region’s economy and help to improve global food security.
Gareth Edmunds, the company’s external affairs director, said recently that Sirius aims to provide a long-term boost for North Yorkshire’s economy by encouraging more pupils to focus on STEM (science, technology, engineering and mathematics) subjects at school.
He told The Yorkshire Post last year: “The deposits here of polyhalite can play a major role in helping to improve food security, mainly through providing more balanced nutrition for crops and (supporting) better farming practices.
“The majority of our team at HQ are from the local area. We have got our own skills programme to try and encourage the development of the right kinds of skills.”
He added: “We have a big focus on STEM and on trying to help enrich the curriculum in schools and colleges throughout the area.”
The alternative proposal potentially offers a more flexible solution. Analysts at
Shore Capital