TIDMSXX
RNS Number : 6777B
Sirius Minerals plc
12 January 2018
12 January 2018
Sirius Minerals Plc
Quarterly progress update
-- The project remains on track to deliver first polyhalite and
commercial production on time and on budget
-- Wilmar offtake agreement signed
-- D-walling progress slightly behind schedule
-- Review of 2017 milestones demonstrates good progress
Sirius Minerals Plc ("Sirius" or the "Company") provides its
latest quarterly progress update.
Safety
The project recorded one lost time incident during the period.
As the organisation expands the Company is proactively engaging
with all staff and construction partners to communicate its safety
culture and Company values.
Cost and schedule
The project remains on track to deliver first polyhalite and
commercial production on time and on budget. Current diaphragm
walling ("D-walling") activities are approximately two months
behind schedule following some delays in commissioning the
D-walling equipment and some adverse weather conditions during the
latter stages of the quarter. The Company is confident that this
small loss of time will be recovered over the remainder of the
project schedule.
Permitting
The conditions clearing process continues to function smoothly
with all relevant conditions satisfied for the ongoing scopes of
works at all locations.
The application for 'minor material' amendments to the original
planning application was unanimously approved by the local planning
authority. This approval covered the previously highlighted changes
to the foreshaft and surface layout designs at the Woodsmith
site.
Site preparation
The site preparation scope of work at the Woodsmith and Lockwood
Beck sites is substantially complete. A number of minor activities
remain ongoing and will be completed in 2018. At Wilton, site
clearance and the removal of vegetation is underway to enable
construction activities to commence.
Geotechnical investigation
The production shaft geotechnical borehole, SM14B, is nearing
the polyhalite horizon with drilling and testing complete to
1,329m. Geotechnical and hydrogeological work continues to support
and refine parameters used in the shaft design and construction
methodology.
The mineral transport system ("MTS") seismic survey is nearing
completion and continues to provide excellent quality data to
support engineering activities. MTS drilling is ongoing with the
majority of the scope completed. Over 2,500m of core has been
recovered, logged and sub-sampled to confirm the geotechnical
parameters required for detailed MTS design. Current activities are
focussed on the Wilton Portal and the MTS caverns at Lockwood
Beck.
Shaft sinking
D-walling activities are progressing smoothly with three rigs
operating on the services shaft. Six panels are in progress or have
been completed with a total of 48 panels required to complete the
foreshaft for the services shaft. The D-walling scope of work is
approximately two months behind schedule due to delays in
commissioning and adverse weather conditions across the quarter.
The Company is confident of recovering the lost time over the
remainder of the project schedule.
Once D-walling activities are completed, excavation and fit-out
of the foreshafts and surface basements will commence. Preparation
for these activities is progressing well, including contractor
procurement and engineering.
The Company is still working to finalise the shaft sinking
contract. This activity is the key focus of management's attention
and all avenues are being explored to ensure a shaft sinking
contract will be executed as soon as possible and the impact on the
overall construction programme is minimized.
Other project activities
Procurement activities for the MTS are well advanced with a view
to commencing initial construction activities in 2018. The Company
is working closely with a number of parties in relation to the
commercial terms associated with the tunnelling scope of work.
Front end engineering and design work for the port and materials
handling facility ("MHF") is now underway and Sirius is engaged
with a number of potential delivery partners. The Company is also
pursuing port outsourcing opportunities with potential partners and
this process is progressing well.
Commercial activities across all scopes of work are scheduled to
be substantially complete by the middle of 2018 in order to
facilitate the completion of the stage 2 financing process.
Agronomy, sales and marketing
During the quarter, the Company announced the signing of a
binding take-or-pay offtake agreement with Wilmar International for
the use and resale of POLY4 exclusively in South East Asia. Wilmar
is a leading global agribusiness with the capacity to reach a
diverse customer base through well-established, trusted
relationships.
The Company is continuing negotiations with a variety of
potential customers in multiple regions to expand its commercial
reach into new markets. POLY4 continues to gain market acceptance
globally from both industry participants and experts.
The Company has initiated 28 new agronomy trials. The overall
programme now encompasses over 260 trials on 32 crops in 17
different countries.
Corporate
Activities relating to the stage 2 financing process will gather
momentum as the coming year unfolds. The Company is intending to
re-engage with the bank group during the first quarter by issuing a
comprehensive due diligence information package. This is the first
major milestone in the timetable which is aiming to have
commitments in place during the second half of 2018.
Performance against milestones for 2017
The Company set out key milestones for 2017 at the beginning of
that year. Performance against these milestones is summarised
below.
Complete site preparation works at Woodsmith Mine and Lockwood
Beck
Status: Complete
-- Site access works complete.
-- Haul road, drainage, concrete batch plant and general infrastructure complete.
-- Site welfare facilities installed and operational.
-- MTS and reinjection pads complete.
Substantially complete D-wall installation for production and
service shafts
Status: Partially complete - approximately two months behind
schedule
-- Scope of D-walling activities was substantially increased
with the change to wider foreshafts.
-- Progress on production shaft has been deferred to allow for the SM14B drilling programme.
-- Delay is estimated by comparing progress against like for like scope (total m(2) of panels).
Progress design activities for MTS and front-end design for
harbour and MHF
Status: Complete
-- MTS scope of work at advanced commercial discussion stage with multiple contractors.
-- Design scope for MHF and overland conveyor complete and out for commercial tender.
-- Port outsourcing opportunities are being negotiated in
parallel with internal design and build process.
Execute incremental offtake agreements
Status: Partially complete
-- Offtake agreement signed with Wilmar International for South
East Asia. Seven years, peaking at 0.75 million tonnes per
annum.
-- Commercial discussions for other key regions (Europe, Brazil,
China, Africa) progressing well.
-- On track for stage 2 financing requirements.
Expand breadth and depth of the agronomy programme
Status: Complete
-- 260 trials on 32 crops in 17 countries.
-- Over 60 new trials commenced during the period.
Seek a Premium Listing and move to the Main Board
Status: Complete
-- Premium Listing obtained in Q2.
-- FTSE 250 inclusion obtained at half year index re-weighting.
-- 2017 total shareholder return of 24% vs 14% for the FTSE 250.
Preparation work for stage 2 financing execution in late
2018
Status: Complete
-- Key advisors appointed and due diligence programme well advanced.
-- In principle agreement reached with IPA in relation to structure and financing process.
For further information, please contact:
Sirius Minerals Tristan Pottas Tel: +44 845 524
Plc Email: ir@siriusminerals.com 0247
Investor Relations
Manager
-------------------- ------------------------------ -----------------
Media enquiries Jos Simson Tel: +44 20 7920
Tavistock 3150
-------------------- ------------------------------ -----------------
About Sirius Minerals Plc
Sirius Minerals Plc is focused on the development of the
Woodsmith Mine, which will access the world's largest and highest
grade polyhalite deposit located in North Yorkshire, United
Kingdom. Polyhalite is a unique multi-nutrient fertilizer, which
can be used to increase balanced fertilization around the world.
Sirius Minerals' shares are traded on the Premium List of the
London Stock Exchange. 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
The company news service from the London Stock Exchange
END
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