Sirius Minerals seeking $600m funding after revising plans for mine near Whitby

The company has announced it is seeking a strategic investor to back the plan and is seeking to raise $600m by March 2020 from a new backer and debt investors.

This money would be used to complete shaft sinking at the site and the firm can access the polyhalite fertiliser they plan to sell.

The remaining construction work needed to reach full capacity of 10m tonnes a year - namely the rest of the tunnel and the processing and shipping facilities on Teesside - is to be deferred for 12 to 24 months and financed separately.

This phase of construction will cost up to $2.5billion.

Sirius believes their new approach will reduce costs and mitigate financing risk.

The company says it is already in discussions with potential strategic partners and debt investors to raise the US$600m required for the initial phase and will update the market when appropriate.

Chris Fraser Managing Director and CEO of Sirius, said: “Our focus during the first phase of the strategic review has been to reassess the best ways to unlock the value of our project for our shareholders, our community, the UK, and our customers all around the world.

“We are in discussions with potential strategic partners and debt investors with the aim of securing the best route to finance our revised initial scope of work and will update the market and our stakeholders on the progress of those when appropriate.

"The value of Sirius is unlocked by reaching production and delivering POLY4 to our customers around the world. This approach allows us to achieve that with less upfront capital while retaining the significant return opportunity it presents for our shareholders and stakeholders."

Doubt was cast on the mine's future in September when the firm pulled out of a bond sale which would have unlocked a larger finance package.

Since then, some parts of development have stopped and staff have been laid off in a bid to reduce costs.

The mine project involves sinking two 1.5km shafts below the North York Moors National Park to access a deposit of polyhalite, a mineral that can be used as fertiliser but has not yet been commercially proven.

The ore will then be moved via a 40km underground tunnel to a port on Teesside.