30th Jul 2015 08:49
LONDON (Alliance News) - Sirius Minerals PLC Thursday reported a flat pretax loss in the last financial year, a period when the company secured approval to build the world's largest potash mine in Yorkshire.
The company reported a GBP10.1 million pretax loss in the year ended March 31, flat from a year earlier, as costs remained broadly unchanged. Sirius does not currently generate any revenue.
The period was significant after the North York Moors National Park Authority, which regulates the national park in Yorkshire where the company's potash mine is to be built, gave Sirius the green light to build the UK's first new potash mine in 40 years on July 1. Potash is used primarily for agricultural fertiliser.
That will lead to Sirius constructing the project with a scope to produce around 13 million tonnes per year to be constructed over two phases. The first phase will be designed to provide a 6.5 million tonne operation with the ability to be expanded to 13 million tonnes per annum over a period of years.
On Thursday, Sirius said it had been a year of marketing and sales as it secured numerous take-or-pay agreements for its anticipated production from the project. Now, it will shift its attention to securing financing and progressing the project.
Sirius has previously said it plans to fund the project with "multiple financings" through debt markets for the majority of the project "because the underlying economics of the project business model lend themselves to high leverage," it said.
Sirius currently intends to split the financing of the project into two stages. Stage one will focus on the initial construction period where the perceived risks are higher. Sirius is expecting to secure the first stage of financing in the first quarter of 2016.
"To gain an understanding of our future plans, people should realise that our target is, very definitely, to bring a world-class fertilizer company into production. This means that any financings before reaching that first production target are important and are stepping stones to deliver a lower operating-cost structure appropriate for profitable operations to unlock shareholder value and returns," said Chairman Russell Scrimshaw.
"The financial year ahead will be an exciting period as we look to secure appropriate funding to begin construction and ultimately reach our goal of becoming a large-scale, multi-nutrient fertilizer producer," he added.
Sirius shares were up 2.7% to 17.20 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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