Sirius Minerals Plc (LON:SXX) announced today the results for Sirius and its subsidiaries (“the Group”) for the year ended 31 December 2017.
Sirius Minerals Plc CEO Chris Fraser commented: “Our world class project based in North Yorkshire has the potential to disrupt the global fertilizer market and contribute substantially to the UK economy.
We achieved a number of important performance milestones in 2017, with commencement of construction, incremental supply agreements signed, bringing the total to 4.4 million tonnes per annum, a move to the London Stock Exchanges’s Main Market and inclusion in the FTSE250 amongst the highlights.
We continue to innovate and work hard on all aspects of our project to secure value for shareholders and are focused on ensuring 2018 will be another year of significant progress on all fronts, as demonstrated by our recent shaft sinking contract.”
Business highlights
Construction
· Enablement works completed for the Woodsmith Mine and the formal commencement of development notice was issued by the local planning authority.
· Site preparation and establishment works at the Woodsmith Mine site and Lockwood Beck complete.
· Optimisation of shaft construction and design has resulted in a simpler design and construction methodology and reduced surface footprint.
· Shaft sinking activities commenced, diaphragm walling activities are progressing smoothly with three rigs operating on the service shaft foreshaft.
Sales and Marketing
· Expanded breadth and depth of global agronomy programme, the Company has initiated 80 new agronomy trials. The overall programme now encompasses over 260 trials on 32 crops in 17 different countries, demonstrating POLY4 delivers greater nutrient uptake and increases both yield and quality.
· Binding take-or-pay supply agreement signed with Wilmar International, one of the largest and most established fertilizer buyers and distributors in South East Asia, for the use and resale of POLY4 exclusively in South East Asia.
Corporate and commercial
· The Company secured admission to trading on the London Stock Exchange (“LSE”) Main Market with a Premium Listing and inclusion in the FTSE 250 index.
· More than doubled the number of employees and established new Corporate Headquarters in North Yorkshire as we ramp up construction and development.
Financial Highlights
· Cash resources at the end of December 2017 were £468.5 million, comprising bank deposits and cash equivalents of £394.0 million and restricted cash of £74.5 million compared to £665.3 million at the end of December 2016.
· Due to IFRS fair valuation requirements relating to elements of the stage 1 financing, the 22% increase in the Company’s share price over the course of the year has caused a total loss of £78.9m being recorded for the year. The fair valuation adjustments driving the loss are non-cash in nature. Further detail relating to the fair valuation adjustments can be found within the financial review.
· Total funds deployed in developing the project during 2017 before financing costs were £197.3 million.
Safety
Safety is paramount to the success of our business. Our culture places safety at the forefront of everything we do and we are continuously engaged with our contractors and consultants to ensure they adopt our safety culture and company values. Two recordable incidents have occurred during the first year of construction and we are constantly working to improve our processes and find safer ways of working in order to ensure that we all return home to our families at the end of the day.
Outlook for 2018
2017 was a year of meaningful progress on the ground in North Yorkshire and in the global fertilizer markets. 2018 will be another year of significant progress on all fronts, ultimately culminating in the successful completion of the stage 2 financing.
Construction
· Complete main service shaft foreshaft construction and excavation.
· Complete the installation of the main production shaft foreshaft and commence foreshaft excavation.
· Commence Mineral Transport System (MTS) access shaft construction at the Woodsmith Mine site.
· Largely complete construction of MTS portal at Wilton.
· Commence shaft sinking at Lockwood Beck intermediate shaft site.
· Commence early works for the Materials Handling Facility.
· Finalise Harbour facility strategy and complete procurement.
R&D, sales & marketing
· Expand global agronomy programme and establish 80 new trials.
· Execute 2 Mtpa incremental supply agreements.
Corporate & commercial
· Substantially complete project procurement.
· Draw down the stage 1 financing royalty instrument.
· Execute stage 2 financing.
Post-balance sheet events
On 14 February 2018 we announced that we have entered into a design and build contract with one of the world’s leading shaft sinking and mining contractors, the Canadian headquartered, DMC Mining Services (DMC), for the construction of the four shafts required for our polyhalite project in North Yorkshire. DMC will utilise proven shaft boring roadheader (SBR) technology to sink the main shafts at the Woodsmith Mine site. Adopting the SBR opens opportunities to accelerate first polyhalite production by up to six months.
Annual report and accounts
The annual report and accounts for the year ended 31 December 2017 will be published on the Company’s website (siriusminerals.com) and posted to shareholders in due course together with the Notice of 2018 Annual General Meeting.
The Company’s 2018 Annual General Meeting will be held at 1.00pm on Thursday 31 May 2018 at The Events Centre, The Principal York, Station Road, York, YO24 1AA
