2nd Jun 2016 07:14
LONDON (Alliance News) - Sirius Minerals PLC Thursday said it has selected its preferred contractors to help develop the company's huge development of a polyhalite mine in North Yorkshire, and said it is now revising its capital expenditure estimates as a result.
Sirius is in the process of developing a large polyhalite mine in the North York Moors National Park and has now selected its preferred contractors to develop the mine site and the mineral transportation system following a 19-month tender process.
The project is being tackled in stages, and now that Sirius has a better idea about the initial costs of the project the company plans to revise its capital requirements for stage one of the project, which it said should "reflect a reduced cost in the near future".
"This is the culmination of a huge amount of work by both the successful bidders and those that have been unsuccessful and we thank all of the groups involved for their efforts. We are delighted to now be moving forward with our selected partners towards the implementation of the project," said Chris Fraser, managing director and chief executive of the company.
Associated Mining Construction UK (AMC) has been selected as the preferred contractor for the design and the construction of the mine site. AMC will construct the shafts for the mine and for the mineral transportation system, which delivers ore and product from the mine to surface to be treated.
AMC is a joint venture company formed by Thyssen Schachtbau GmbH of Germany and Thyssen Mining Construction of Canada, both members of the Thyssen Group, and JS Redpath Ltd of Canada and Deilmann-Haniel GmbH, both members of the Redpath Group.
"As a result of the refinement of construction methodology by the tenderers, and the current competitive tender rates and design evolution, a significant saving from the definitive feasibility study estimate is expected to have been captured through the tender process," said Sirius.
AMC will start by working on the front end engineering and design process and will be formally awarded the contract one Sirius has secured the required financing for stage one of the project.
Another joint venture has been chosen to design and build the tunnel which will host the mineral transport system which will link the mine and the material handling facility. The joint venture is between Hochtief (UK) Construction Ltd and J Murphy & Sons Ltd, which have been working together since 2001.
The first phase of work will include front end engineering and design work and a detailed geotech programme covering the route where the transport system will lie.
"From this work a refined estimate based on a full design will be compiled, prior to agreement of the contract sum. This work is expected to take over 12 months to complete and will be funded from the proceeds of the stage 1 financing. However commitment to the full mineral transport system implementation scope of work will be part of the company's stage 2 financing for the project," said Sirius.
Sirius will now revise the stage one capital requirements that were published as part of the definitive feasibility study earlier this year to take its preferred contractors into account, which it believes will lower the stage one requirement.
Sirius said the funding requirements for stage two could also fall, but it is currently too early to tell.
Sirius shares were trading up 2.4% to 20.23 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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