Global mining firm Anglo American has today confirmed its offer to purchase the Scarborough-based company for £404.9 million, the equivalent of 5.5p per share.
Sirius' board of directors has recommended the acquisition which will be voted on by shareholders at a general meeting.
Russell Scrimshaw, Chairman of Sirius, said the offer is "the only feasible option" and warned shareholders that if the deal does not go through, the company could be placed into administration or liquidation "within weeks".
He said: "We acknowledge that to many Shareholders our decision as a board to recommend this offer will have come as a shock. Your board deeply regrets that we could not deliver the complete stage two financing in 2019 despite a very broad and thorough process. Going into the strategic review the Sirius Board's strong preference was a solution that allowed current Shareholders to participate as fully as possible in the future development of the Project. Following the strategic review process it is clear that no such options are currently available to us and in that context Anglo American's offer is the only feasible option.
"We also recognise the returns that this offer would represent are not what either our shareholders or the Sirius Board had previously hoped for. We regret that we are not able to deliver on our long-term goal of Sirius being able to deliver the Project into production, although we assure all stakeholders that the team has worked tirelessly and diligently over the last nine years to try and achieve that. However, given the current cash constraints of Sirius, and lack of realistic and deliverable alternative financing and development options, we believe this to be a fair approach from Anglo American, a company committed to approaching the Project in the right way, and with the resources to complete the job.
"We now face a stark choice. If the Acquisition is not approved by Shareholders and does not complete there is a high probability that the business could be placed into administration or liquidation within weeks thereafter. This outcome would most likely result in Shareholders losing all of their investment, as well as put the future of the entire Project, and its associated benefits for the local area and the UK, at risk.
"This is the context in which your board must assess the offer for your company and, having given due consideration, your board believes the Acquisition to be in the best interests of Sirius and all of its stakeholders, providing Shareholders with some financial return."
In order to go through, the bid must be approved by a majority in number of the Sirius shareholders voting either in person or by proxy, representing at least 75 per cent in value of the Sirius Shares voted.
In addition, a special resolution implementing the scheme must be passed by Sirius shareholders representing at least 75 per cent of votes cast at the general meeting.
Mark Cutifani, Chief Executive of Anglo American, said: "Anglo American's recommended offer provides greater certainty for Sirius' Shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential Tier 1 Project closer to reality. We intend to bring Anglo American's financial, technical and product marketing resources and capabilities to the development of the Project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area.
"The addition of the Project supports our ongoing transition towards supplying those essential metals and minerals that will meet the world's evolving needs - in terms of the undoubted need for cleaner energy and transport, and providing infrastructure and food for the world's fast-growing and urbanising population. Our development of the Project in the years ahead reinforces the quality of our portfolio and our long-term growth profile, further enhancing our ability to deliver leading returns on a sustainable basis and enduring value for all stakeholders."
A document explaining the details of the acquisition will be sent to shareholders within 28 days; the scheme is expected to become effective by March 31.