TIDMSXX
RNS Number : 1430W
Sirius Minerals Plc
25 April 2016
25 April 2016
Sirius Minerals Plc
Financial results for period to 31 December 2015
Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the
"Company") announces the results for Sirius and its subsidiaries
("the Group") for the period ended 31 December 2015.
The results cover the nine-month period from 31 March 2015 to 31
December 2015, following the Group's change of accounting reference
date, as announced on 10 March 2016.
Key highlights
-- Secured planning approvals from various local planning
authorities for the key infrastructure needed to commence
construction of the Company's North Yorkshire polyhalite project
("the Project").
-- Expiration of potential judicial review periods for all key planning approvals.
-- Major US-based Fortune 500 agri-business offtake partner
tripling its offtake supply agreement to 1.5 million tonnes per
annum and extending it from five to seven years.
-- Sales agreement with Huaken International in China to
purchase POLY4 as a soil conditioner and reaching 500,000 tonnes of
supply in year seven of the contract.
-- Appointment of two new non-executive directors - Noel Harwerth and Jane Lodge.
-- Appointment of J.P. Morgan Cazenove as joint broker and
Liberum Capital as nominated advisor.
-- Major progress towards completion of the Project's definitive feasibility study ("DFS").
-- Raised GBP23.3 million from the exercise of warrants, issued as part of a 2014 fundraising.
Post-balance sheet events
-- In March 2016, the Company announced the material findings of its Project DFS.
Financials
-- Cash at 31 December 2015 was GBP29.1 million (for the year
ended 31 March 2015: GBP26.6 million).
-- During the nine-month period ended 31 December 2015 the
Group's loss after tax was GBP7.0 million (for the year ended 31
March 2015: GBP9.6 million).
Annual report and accounts
The annual report and accounts have now been published on the
Company's website: www.siriusminerals.com. The annual report and
accounts will also be posted to shareholders shortly.
The Company's annual general meeting will be held at 1pm on
Friday 24 June 2016 at the Royal York Hotel, Station Road, York,
YO24 1AA. The Notice of Meeting will be issued to shareholders
shortly.
For further information, please contact:
Sirius Minerals Plc
Investor Relations Email: ir@siriusminerals.com Tel: +44 845
524 0247
------------------------- ------------------------------- ---------------
Joint Brokers
Liberum Capital Limited Neil Elliot, Tel: +44 20
(NOMAD) Clayton Bush, 3100 2222
Jill Li
J.P. Morgan Cazenove Ben Davies, Jamie Tel: +44 20
Riddell 7742 4000
WH Ireland Adrian Hadden Tel: +44 20
7220 1666
------------------------- ------------------------------- ---------------
Media Enquiries Jos Simson, Mike Tel: +44 20
Tavistock Bartlett, 7920 3150
Emily Fenton
------------------------- ------------------------------- ---------------
About Sirius Minerals Plc
Sirius Minerals is the fertilizer development company focused on
the development of its polyhalite project in North Yorkshire, the
United Kingdom. It has the world's largest and highest grade
deposit of polyhalite, a multi-nutrient form of potash containing
potassium, sulphur, magnesium and calcium. Incorporated in 2003,
Sirius Minerals's shares are traded on the London Stock Exchange's
AIM market. 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.
CHAIRMAN'S STATEMENT
Dear Shareholders,
It is a relatively short period since we published our interim
results in December 2015 and this has been brought about by the
Group opting to change its financial year end to December rather
than March. This report therefore covers the financial period from
1 April 2015 to 31 December 2015. The major reason for this change
is that we will now be in line with most main market businesses.
Additionally this change will provide our team with more
flexibility, especially around fundraising windows, for the next
financing stage of our North Yorkshire polyhalite project ("the
Project").
Highlights within this period included key planning approvals,
expiration of potential judicial review periods without any
objections being tabled, additional sales offtake commitments, the
appointment of two new non-executive directors, the strengthening
of our financial adviser teams, major progress towards completion
of our definitive feasibility study (DFS) and the raising of
GBP23.3 million from the exercise of warrants.
We were naturally delighted to secure planning approvals for the
key infrastructure needed to commence construction including
approvals for the mine, mineral transport system and the materials
handling facility from various local planning authorities. These
positive decisions subsequently passed through their judicial
review windows unchallenged and are now fully implementable. The
support from so many different stakeholders throughout the planning
process has been very much welcomed by everyone associated with the
Company.
Another key achievement during the period has been Sirius
Minerals's sales progress, with further offtake agreements secured
for our POLY4 product. This includes our major US-based Fortune 500
agri-business offtake partner tripling its supply agreement with us
to 1.5 million tonnes per annum and extending it from five to seven
years. We also secured a sales agreement with Huaken International
(Huaken) in China. This deal sees polyhalite supplied on an
incremental basis, reaching 500,000 tonnes in year seven of the
contract.
Interestingly, in a first for us, Huaken is purchasing our
multi-nutrient polyhalite product to use as a soil conditioner.
Huaken is also one of a restricted list of companies in China with
the right to import potassium fertilizer. Research undertaken by
the Company has shown the benefits of adding polyhalite to highly
acidic soils (which is of particular relevance to large areas of
China). We have made tremendous progress with sales agreements over
the past few years and we expect this to both continue and
intensify as we progress through construction to first
production.
The market view for mining companies, commodities and both
potash and fertilizer companies generally has been poor during the
period. Major mining firms and potash (muriate of potash) producers
alike have suffered in terms of their valuations. However, this has
not had an effect on Sirius Minerals's progress towards its goals.
Whilst general capital market sentiment has been bearish during
this time, it is my belief that there are significant opportunities
for companies with world-class development assets such as our
Project.
Our intention always has been to develop our polyhalite project
with a long life, low operating cost and high-quality resource
base, meaning that there is protection (and still good returns)
during downturns in the cycle and very strong returns to be made in
the upturns. The material findings of our definitive feasibility
study, published after the balance sheet period in March 2016, only
serves to demonstrate this point.
On governance issues I have a number of matters to report for
the period. In July 2015 we welcomed two new non-executive
directors to the Board - Noel Harwerth and Jane Lodge. These
appointments gave the Company a greater percentage of independent
directors on the Board further strengthening corporate governance.
Once again I would like to thank outgoing board members, Peter
Woods and Chris Catlow, who both made valuable contributions during
the early years of the Company's development.
We also made changes to our advisory team, with existing broker
Liberum Capital taking on our nominated advisor (Nomad) role and
the appointment of J.P. Morgan Cazenove (JPM) as joint broker.
On financing, during the period the Company was able to secure
further funds totalling GBP23.3 million from the exercise of
warrants which were originally issued early in 2014. These funds
have been important to support our progress towards the completion
of the DFS and planning approvals.
During the nine-month period ended 31 December 2015 the Group
made a consolidated loss of GBP7.0 million compared to a loss of
GBP9.6 million for the year ended 31 March 2015. Cash resources at
the end of December 2015 were GBP29.1 million compared to GBP26.6
million at the end of March 2015.
The Group's net assets at 31 December 2015 were GBP165.2 million
compared to GBP146.6 million at 31 March 2015.
The consolidated financial statements have been prepared under
the going concern assumption. However, the directors recognise that
a material uncertainty remains around financing for the
Project.
The principal risks and uncertainties facing the Group include
exploration and development, reserves and resources estimates,
mineral title risk, commodity price risk, liquidity risk, currency
risk, permitting, community relations and competitor risk, product
risk and operational risks including the development risk assessed
in the DFS.
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 02:00 ET (06:00 GMT)
The Company's Board, management and finance team continue to be
focussed on both the efficient management of our existing funds and
the ongoing (and extensive) work to secure financing for the
construction of our Project. We remain focussed on a range of
funding options and continue to believe that the overall funding
requirement can be delivered through a number of mechanisms, with
debt funding likely to make up as much of the overall requirement
as possible.
Finally, another change as result of our switch to a December
year-end is that our annual general meeting will now be held in
June, in contrast to the traditional September date. I hope to see
many of our loyal shareholders in York again this year.
Kind regards
Russell Scrimshaw
Chairman
CONSOLIDATED INCOME STATEMENT
For the nine-month period ended 31 December
2015
Nine-month 31 March
period ended 2015
to
31 December
2015
GBP000s GBP000s
------------------------- -------------------
Revenue - -
Administrative expenses (7,422) (10,047)
-------------------------- ------------------------- -------------------
Operating loss (7,422) (10,047)
Finance income 99 332
Finance costs (186) (353)
-------------------------- ------------------------- -------------------
Loss before taxation (7,509) (10,068)
Taxation 550 503
-------------------------- ------------------------- -------------------
Loss for the financial
period (6,959) (9,565)
-------------------------- ------------------------- -------------------
Loss per share:
Basic and diluted (0.3)p (0.5)p
-------------------------- ------------------------- -------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the nine-month period ended 31 December
2015
Nine-month 31 March
period 2015
ended to
31 December
2015
GBP000s GBP000s
----------
Loss for the financial period
attributable to owners of the
parent (6,959) (9,565)
-------------------------------------- ------------- ----------
Other comprehensive income/(loss)
for the period
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translating
foreign operations (135) (346)
Other comprehensive income/(loss)
for the period (135) (346)
-------------------------------------- ------------- ----------
Total comprehensive loss for the
period (7,094) (9,911)
-------------------------------------- ------------- ----------
Total comprehensive loss shown above is fully attributable to
equity shareholders of the parent in both years.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
Nine-month 31 March
period 2015
ended to
31 December
2015
ASSETS GBP000s GBP000s
------------------------------- ------------- ----------
Non-current assets
Property, plant and equipment 1,849 1,932
Intangible assets 137,970 121,721
Total non-current assets 139,819 123,653
-------------------------------- ------------- ----------
Current assets
Other receivables 1,184 1,413
Cash and cash equivalents 29,093 26,640
Total current assets 30,277 28,053
-------------------------------- ------------- ----------
TOTAL ASSETS 170,096 151,706
-------------------------------- ------------- ----------
EQUITY AND LIABILITIES
Equity
Share capital 5,737 5,362
Share premium account 240,874 216,586
Share-based payment reserve 7,624 13,290
Accumulated losses (95,966) (95,630)
Foreign exchange reserve 6,893 7,028
Total equity 165,162 146,636
-------------------------------- ------------- ----------
Current liabilities
Loan from third parties 748 1,980
Trade and other payables 4,186 3,090
Total liabilities 4,934 5,070
-------------------------------- ------------- ----------
TOTAL EQUITY AND LIABILITIES 170,096 151,706
-------------------------------- ------------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the nine-month period ended 31 December 2015
Share capital Share premium Share based Accumulated losses Foreign exchange Equity
account payments reserve reserve shareholders'
funds
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 1 April
2014 4,658 197,797 11,404 (86,360) 7,374 134,873
Loss for the
year - - - (9,565) - (9,565)
Foreign
exchange
differences
on
translation
of foreign
operations - - - - (346) (346)
--------------- --- ---------------- ------------------- ------------------ ------------------- ------------------- ------------------
Total
comprehensive
loss for the
period - - - (9,565) (346) (9,911)
Convertible
loan 113 3,287 - 295 - 3,695
Share issue 572 15,853 - - - 16,425
Share issue
costs - (665) - - - (665)
Share-based
payments - - 1,886 - - 1,886
Exercised
options 19 314 - - - 333
--------------- --- ---------------- ------------------- ------------------ ------------------- ------------------- ------------------
At 31 March
2015 5,362 216,586 13,290 (95,630) 7,028 146,636
Loss for the
financial
period - - - (6,958) - (6,958)
Foreign
exchange
differences
on
translation
of foreign
operations - - - - (135) (135)
--------------- --- ---------------- ------------------- ------------------ ------------------- ------------------- ------------------
Total
comprehensive
loss for the
period - - - (6,958) (135) (7,093)
Convertible
loan 44 1,103 - 257 - 1,404
Share issue - - - - - -
Share issue
costs - (121) - - - (121)
Share-based
payments 17 - - (5,666) 6,365 - 699
Exercised
options 18 331 23,306 - - - 23,637
At 31 December
2015 5,737 240,874 7,624 (95,966) 6,893 165,162
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 02:00 ET (06:00 GMT)
--------------- --- ---------------- ------------------- ------------------ ------------------- ------------------- ------------------
The share premium account is used to record the excess proceeds over nominal value on the
issue of shares.
The share-based payment reserve is used to record the share-based payments made by the Group.
Foreign exchange reserve records exchange differences which arise on translation of foreign
operations with a functional currency other than Sterling.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the nine-month period ended
31 December 2015
Nine-month 31 March
period 2015
ended to
31 December
2015
GBP000s GBP000s
---------------
Cash outflow from operating activities (5,307) (10,240)
----------------------------------------- --------------------------- ---------------
Cash flow from investing activities
Purchase of intangible assets (15,533) (27,188)
Purchase of plant and equipment (1) (62)
Repayment of loan to third party - -
Net cash used in investing activities (15,534) (27,250)
----------------------------------------- --------------------------- ---------------
Cash flow from financing activities
Proceeds from loan - -
Proceeds from issue of shares 23,637 16,758
Share issue costs (121) (665)
Finance costs (87) (21)
Net cash generated from financing
activities 23,429 16,072
----------------------------------------- --------------------------- ---------------
Net increase/(decrease) in cash
and cash equivalents 2,588 (21,418)
Cash and cash equivalents at
beginning of the period 26,640 48,404
Effect of foreign exchange rate
differences (135) (346)
Cash and cash equivalents at
end of the period 29,093 26,640
----------------------------------------- --------------------------- ---------------
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
----------------------------------------------------------------------------------------------------
BASIS OF PREPARATION
The financial information for Sirius Minerals Plc (the Company) and its subsidiaries (the
Group) has been prepared in accordance with International Financial Reporting Standards (IFRS)
and IFRS IC Interpretations as adopted by the European Union (EU) and the Companies Act 2006
applicable to companies reporting under IFRS.
IFRS is subject to amendment and interpretation by the International Accounting Standards
Board (IASB) and the International Financial Reporting Standards Interpretations Committee
(IFRS IC) and there is an ongoing process of review and endorsement by the European Commission.
The financial statements have been prepared on the basis of the recognition and measurement
principles of IFRS that were applicable at 31 December 2015.
The preparation of financial information in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Company's accounting policies.
The financial information has been prepared under the historical cost convention. The principal
accounting policies set out below have been consistently applied to all periods presented.
The Company is a public limited company which is incorporated and domiciled in the UK. The
address of its registered office is 3rd Floor Greener House, 68 Haymarket, London SW1Y 4RF.
GOING CONCERN
During the nine-month period ended 31 December 2015 the Group made a consolidated loss of
GBP6,959,000 compared to a loss of GBP9,565,000 for the year ended 31 March 2015.
Cash resources at the end of December 2015 were GBP29,093,000 compared to GBP26,640,000 at
the end of March 2015.
The Group's net assets at 31 December 2015 were GBP165,162,000 compared to GBP146,636,000
at 31 March 2015.
The Group is actively involved in efforts to secure short and long-term finance for its polyhalite
project in North Yorkshire. Whilst the directors' are confident of a positive outcome to these
negotiations over the coming months, they recognise that project financing remains uncertain,
and this represents a material uncertainty which may cast significant doubt on the Group's
ability to continue as a going concern.
2. SEGMENTAL ANALYSIS
---------------------
Management has determined the operating segments by considering the business from both a geographic
and activity perspective. The Group is currently organised into one business division: the
UK segment which consists of its North Yorkshire polyhalite project related activities and
the corporate operations. This division is the segment for which the Group reports information
internally to the board of directors. The Group's operations are predominantly in the United
Kingdom.
3. LOSS PER SHARE
--------------------------------------------------------------------------------------------------- ---------------
Nine-month 31 March 2015
period ended to
31 December
2015
GBP000s GBP000s
-------------------------------------------------------------------------------- ----------------- ---------------
Loss for the purposes of basic earnings per share being net loss attributable
to equity shareholders
of the parent (6,959) (9,565)
Loss for the purpose of diluted earnings per share (6,959) (9,565)
-------------------------------------------------------------------------------- ----------------- ---------------
2015 2015
Number
(000's) Number (000's)
-------------------------------------------------------------------------------- ----------------- ---------------
Number of shares
Weighted average number of ordinary shares for the purpose of basic and diluted
earnings per
share 2,230,602 1,901,126
-------------------------------------------------------------------------------- ----------------- ---------------
2015 2015
Number
(000's) Number (000's)
-------------------------------------------------------------------------------- ----------------- ---------------
Number of shares
Weighted average number of ordinary shares for the purposes of diluted earnings
per share 2,231,795 1,960,057
-------------------------------------------------------------------------------- ----------------- ---------------
Basic and diluted loss per share (0.3) (0.5)
-------------------------------------------------------------------------------- ----------------- ---------------
4. INTANGIBLE ASSETS
------------------------------------------------- ---------------- ---------------------- ---------
Exploration
costs
and rights Goodwill Software Total
Group GBP000s GBP000s GBP000s GBP000s
------------------- ---------------------------- ---------------- ---------------------- ---------
Cost
At 1 April 2014 144,483 9,079 79 153,641
Additions 28,929 - - 28,929
------------------- ---------------------------- ---------
At 31 March 2015 173,412 9,079 79 182,570
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 02:00 ET (06:00 GMT)
Additions 16,254 - - 16,254
------------------- ---------------------------- ---------------- ---------------------- ---------
At 31 December
2015 189,666 9,079 79 198,824
------------------- ---------------------------- ---------------- ---------------------- ---------
Accumulated provision for permanent
diminution in value
At 1 April 2014 (58,339) (2,436) (52) (60,827)
Amortisation - - (22) (22)
------------------- ---------------------- ---------
At 31 March 2015 (58,339) (2,436) (74) (60,849)
Amortisation - - (5) (5)
At 31 December
2015 (58,339) (2,436) (79) (60,854)
------------------- ---------------------------- ---------------- ---------------------- ---------
Net book value
At 31 December
2015 131,327 6,643 - 137,970
------------------- ---------------------------- ---------------- ---------------------- ---------
At 31 March 2015 115,073 6,643 5 121,721
------------------- ---------------------------- ---------------- ---------------------- ---------
GOODWILL
The goodwill acquired in January 2011 as part of
the business combination relating to York Potash
Ltd has been allocated to the cash generating unit
(CGU) of resource evaluation and exploitation in
the geographical location of the UK, which is expected
to benefit from the business combination.
The recoverable amount of the goodwill on the acquisition
of York Potash Ltd has been assessed by reference
to value in use. The valuation is based on cash
flow projections that incorporate best estimates
of selling prices, production rates, future capital
expenditure and production costs. A growth rate
of 2 per cent was incorporated into the discount
rate.
The cash flow projections are based on long-term
plans covering the expected life of the operation.
The Indicated Resource of 820 million tonnes of
polyhalite determines an expected mine life of
more than 50 years. The valuations are particularly
sensitive to changes in assumptions about selling
prices, volumes of production and operating costs.
Long-term average selling prices are forecast taking
account of market data in respect of potash and
management's current expectations. Forecasts of
volumes of production and operating costs are based
on management's current expectations.
Discount rates represent an estimate of the rate
the market would apply having regard to the time
value of money and the risks specific to the asset
for which the future cash flow estimates have not
been adjusted. A discount rate of 10 per cent,
which is considered to be appropriate for a project
of this nature and size, has been applied to the
pre-tax cash flows.
No reasonably possible change in the key assumptions
on which York Potash Limited's recoverable amount
is based would cause its value to fall short of
its carrying amount as at 31 December 2015.
IMPAIRMENT
There were no impairment charges in the year. Software
Company GBP000s
------------------------------------- ---------
Cost
At 1 April 2014 10
Additions -
------------------------------------- ---------
At 31 March 2015 10
Additions -
As at 31 December 2015 10
------------------------------------- ---------
Accumulated provision for permanent
diminution in value
At 1 April 2014 (7)
Amortisation (2)
------------------------------------- ---------
At 31 March 2015 (9)
Amortisation (1)
At 31 December 2015 (10)
------------------------------------- ---------
Net book value
At 31 March 2015 -
------------------------------------- ---------
At 31 March 2014 1
------------------------------------- ---------
5. CASH OUTFLOW FROM OPERATING
ACTIVITIES
------------------------------------- --------------------------- ---------
Nine-month 31 March
period 2015
ended to
31 December
2015
Group GBP000s GBP000s
------------------------------------- --------------------------- ---------
Loss before tax (7,509) (10,068)
Depreciation 84 182
Assets expensed to income statement - 64
Finance (income)/expense 87 21
Amortisation 5 22
Share-based payments 699 1,886
Loan conversion into shares 172 333
Tax credit 550 503
-------------------------------------- --------------------------- ---------
Operating cash flow before changes
in working capital (5,912) (7,057)
Decrease/(increase) in receivables 229 (367)
(Decrease)/increase in payables 376 (2,816)
Net cash outflow from operating
activities (5,307) (10,240)
-------------------------------------- --------------------------- ---------
6. SHARE CAPITAL
---------------------------------------------------------- ---------
Nine-month 31 March
period 2015
ended to
31 December
2015
GBP000s GBP000s
------------------------------------------- ------------- ---------
Allotted and called up
2,294,695,991 (March 2015: 2,145,020,261)
ordinary shares of 0.25p each 5,737 5,362
------------------------------------------- ------------- ---------
On 8 April 2015 the Company issued 847,381 new ordinary shares
under the Company's long-term incentive plan, of which 285,714 new
ordinary shares of 0.25p each were issued to CN Fraser, Chief
Executive Officer and Managing Director of the Company.
On 9 April 2015 the Company received notices of exercise in
respect of convertible securities previously issued on 23 January
2014 at conversion prices of 7.2p and 7.3p per share, of which
9,088,662 shares were issued.
On 10 April 2015 the Company received notices of exercise in
respect of convertible securities previously issued on 23 January
2014 at conversion prices of 7.3p and 7.4p per share, of which
8,135,877 shares were issued.
On 9 July 2015 the Company issued 1,250,000 new ordinary shares
of 0.25p each at a price of 4.5p per share and 25,000 new ordinary
shares of 0.25p per share at price of 19.5p per share, realising
GBP61,125 following the exercise of share options.
On 30 September 2015, the Company was notified that EN Harwerth
purchased 6,296 of the Company's 0.25p ordinary shares
On 30 October 2015, the warrants issued to investors on 14 March
2014 had lapsed. Prior to this lapse date, a total of 129,377,517
shares had been issued during the period at 18p per share realising
GBP23,287,953.
7. FINANCIAL INFORMATION
------------------------
The financial information set out in this announcement does not
comprise the Group's statutory accounts for the nine-month period
ended 31 December 2015 or the year ended 31 March 2015.
The comparative financial information has been extracted from
the statutory accounts of the Group for the year ended 31 March
2015. The auditors reported on those accounts; their report was
unqualified and did not contain a statement under either Section
498 (2) or Section 498 (3) of the Companies Act 2006 but did
include references to material uncertainties surrounding the
Directors application of the Going Concern assumption. The
statutory accounts for the year ended 31 March 2015 have been
delivered to the Registrar of Companies.
The statutory accounts for the year ended 31 December 2015 have
been finalised on the basis of the financial information presented
by the Directors in this preliminary announcement and will be
delivered to the Registrar of Companies following the Company's
annual general meeting.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGZDGDFGVZZ
(END) Dow Jones Newswires
April 25, 2016 02:00 ET (06:00 GMT)
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