Major offtake agreement upgrade

Released : 19/08/2015 07:00

RNS Number : 4177W
Sirius Minerals Plc
19 August 2015
 

 

 

19 August 2015

 

Sirius Minerals Plc

Major offtake agreement upgrade

The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") announce the upgrade of its take or pay supply agreement ("Agreement") with its existing Fortune 500 US-based agri-business customer.

The initial Agreement, for the supply of polyhalite from the York Potash Project ("the Project"), was announced on 21 January 2014.  It was for 500,000 tonnes per annum of polyhalite for a five year period, from commencement of production, with a possible renewal for a further five years.  The Agreement counterparty also had the option to take up to an additional 500,000 tonnes per annum.

The revised Agreement will see the base amount of polyhalite supplied tripled to 1.5 million tonnes per annum.  The initial contract term is extended from five years to seven years, with possible extension options for two additional five year periods. 

The price to be paid under the Agreement will remain confidential but is still based on a formula linked to the market price of nutrients contained in polyhalite.  To give context on the significance of the Agreement, on current prices and over a full 17 year period, it represents a multi-billion dollar trade deal between the UK and US.   

The counterparty, which will continue to remain confidential at this time, is a major US based Fortune 500 agri-business and would be seen by investors and banks as a premium grade counterparty.

The Company has now secured 3.1 million tonnes per annum of offtake agreements, with an additional 4.8 million tonnes per annum in other forms of commitments.  These agreements will provide further assistance in underpinning future financing requirements.

Chris Fraser, Managing Director and CEO of Sirius, comments:

"We are delighted with this further show of confidence from our North American partner and look forward to sharing successes together for decades to come.

"Like many in the industry our customers understand the value of polyhalite, its multi-nutrient qualities and the fact it can help farmers get the same or better yields more economically."

For further information, please contact:

Sirius Minerals Plc

Investor Relations

 

 

Email: ir@siriusminerals.com

 

Tel: +44 845 524 0247

Joint Brokers

Liberum Capital Limited

 

Clayton Bush

 

Tel: +44 20 3100 2222

Macquarie Capital (Europe) Limited (NOMAD)

Ken Fleming, Nick Harland, Nick Stamp

Tel: +44 20 3037 2000

WH Ireland

 

Adrian Hadden

Tel: +44 20 7220 1666

Media Enquiries

Tavistock

Jos Simson, Mike Bartlett,

Emily Fenton

Tel: +44 20 7920 3150

Warrant Trading Enquiries

Liberum Capital Limited

 

Simon Smith

 

Tel: +44 20 3100 2171

 

About Sirius Minerals Plc

Sirius Minerals is the fertilizer development company focused on the development of the York Potash Project in the United Kingdom, which has the world's largest and highest grade deposit of polyhalite, a multi-nutrient form of potash containing potassium, sulphur, magnesium and calcium.  Incorporated in 2003, Sirius Minerals' shares are traded on the London Stock Exchange's AIM market.  Its shares are also traded in the United States on the OTCQX through a sponsored ADR facility.  Further information on the Company can be found at: www.siriusminerals.com.

 


This information is provided by RNS
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