The developer of a major North Yorkshire mining project has revealed a £1 billion financing plan to allow construction to get under way, having agreed a £245 million deal with a firm chaired by an Australian billionaire.
Last month, Sirius Minerals entered into the £245 million finance deal with Hancock Prospecting, which is a privately owned firm operating in the agricultural and mining sectors which is chaired by the richest woman in Australia, Gina Rinehart.
Along with the royalty financing deal with Hancock, Sirius said it would launch an underwritten placing and open offer to raise around £330 million to £400 million and an underwritten convertible bond offering to raise around £326 million to £367 million.
Chris Fraser, Sirius Managing Director, said that the scheme will create jobs throughout Teesside and North Yorkshire, and represents a major business investment in the UK.
‘Compelling value proposition’
Fraser continued: “It’s been a long journey to this point, and we still have some way to go, but I want to thank everyone who has supported the company in its efforts to reach this major milestone.
“Once we have received shareholder approval, we want to get on with the job of delivering this compelling value proposition, not only for our shareholders but also for the North Yorkshire community.”
Sirius is anticipating that the project will progress in two phases: the initial construction phase and the expansion phase.
The initial construction phase is intended to achieve first production from the mine within the next five years.
The expansion phase will be funded from operational cash flows and is intended to eventually increase production capacity subject to receipt of further planning permissions and the completion of additional infrastructure.
This first tranche of cash will finance the cost of all site preparation, mine shaft excavations, tunnel caverns and the money is expected to be spent in three years. The second round of fundraising will bring in a further US$1.8 billion.