Preliminary results announcement for the year ended 31 December 2018
Sirius Minerals Plc (“Sirius” or the “Company”) announces its preliminary results for the year ended 31 December 2018.
Click here to read the full announcement.
Chris Fraser, Managing Director and CEO of Sirius, commented:
"It has been another year of exceptional progress for the business as we continue to increase our customer base around the world and develop the Woodsmith Mine and its associated infrastructure.
The ongoing development of our world class project will see Sirius become a major global producer of our multi-nutrient fertilizer product POLY4 and the launch of our stage two financing transaction today sets the pathway for delivering our polyhalite Project.
Construction and procurement
- Procurement completed for the major construction packages which was a significant achievement for the Company
- Multiple construction milestones achieved
- Service shaft foreshaft excavation near complete at year end and production shaft foreshaft excavation commenced
- Vertical sinking machine (“VSM”) launched to construct the mineral transport system access shaft
- VSM activities progressing smoothly
- Mineral transport system tunnelling commenced and excavated to a distance of 100m at the time of writing
- Earthworks underway at the materials handing facility
Sales and marketing
- Binding take-or-pay supply agreements signed for the distribution of POLY4 into China, Africa, Brazil and 12 other South American countries
- Total peak aggregate take-or-pay supply agreements increased to 8.2 Mtpa in the year, and to 10.7 Mtpa post period end, materially exceeding 2018 targeted level of 6-7 Mtpa, with contracts signed in several key new target markets
- Fortune 500 US-based agri-business Archer Daniels Midland confirmed as North American POLY4 off-take partner with a supply agreement for volumes of POLY4 increasing to 1.5 Mtpa
- Global agronomy programme expanded by 110 new trials in 2018, in excess of 2018 target
- Overall programme encompassing 382 trials on 42 crops in 28 different countries at the end of 2018
- Trial results continue to demonstrate that POLY4 increases yields compared to existing fertilizer practices in a range of conditions
Corporate and commercial
- Successful drawdown of US$250 million royalty investment from Hancock British Holdings Ltd
- US$50 million equity component of Hancock royalty investment aligned with Stage 2 financing commitments
- Acquisition of a 30 per cent. equity interest in each of the Cibra Group Companies, linked to the 2.5 Mtpa binding supply agreement with Cibra for resale of POLY4 into Brazil and certain other South American countries, providing access to strategically important fertilizer markets
- A good level of participation in tender process lead to a successful convertible bond conversion to release escrowed cash and to optimise the Company’s capital structure
- £391m deployed in the year for the purposes of developing the Project
- Total funds at the end of December 2018 were £290.4m, comprising unrestricted cash and cash equivalents of £230.1m and restricted cash of £60.3m
- Total loss of £12.5m compared to a loss of £78.9m in the prior year. The main driver of the loss is the fair value re-measurement of the derivatives associated with the convertible loans
- Safety of our workforce is our number one priority on site, and we are committed to promoting the highest standards of safety in our Company. The Project’s Lost Time Injury Frequency Rate (LTIFR) at 31 December 2018 was 3.54. We work collaboratively with our contractors to create a one-team approach to health and safety and significant effort is being made to promote a strong health and safety culture across our business.
Post-balance sheet events
- Major European supply and distribution agreement with BayWa AG signed on 25 April 2019 for guaranteed minimum volumes of POLY4 ramping up to 2.5Mtpa in year five.
- Aggregate peak contracted sales volumes increase as a result of the BayWa AG agreement to 10.7 Mtpa
Stage 2 financing
- The Company will today launch an underwritten Firm Placing and Placing and Open Offer and Convertible Bond Offering as well as announce an update to its Stage 2 Financing, under which it intends to raise approximately US$3.8 billion to fully fund the Project to the point at which it generates positive operating cash flows.
Outlook for 2019
2018 was a year of significant construction progress and material expansion in the Company’s global distribution footprint for POLY4 through its growing number of binding take-or-pay supply agreements. 2019 is a critical year for the Company as we work towards securing the financing of our Project through to the extraction of first polyhalite from the Woodsmith Mine by end 2021, and delivering transformative economic benefits to the region and the UK.
- Complete construction of the main shafts foreshafts to enable the commencement of excavation of the main shafts using shaft-boring roadheaders
- Commence mechanical tunnelling of drive 1 of the MTS and advance tunnel excavation to 3km
- Complete early works and commence civil works for the MHF
- Finalize commercial approach to Port facilities
R&D, Sales & Marketing
- Continue to expand our global agronomy programme in conjunction with distribution partners
- Expand our global distribution footprint into incremental key markets
Corporate and commercial
- Achieve financial close on all components of the stage 2 financing plan
Annual report and accounts
The annual report and accounts for the year ended 31 December 2018 (the “Annual Report”) will be published on the Company’s website (Siriusminerals.com) and posted to shareholders in due course.
The Company’s 2019 Annual General Meeting will be held at 1.00pm on Thursday 13 June 2019 at The Events Centre, The Principal York, Station Road, York, YO24 1AA.Back to news archive