TIDMSXX
RNS Number : 6558J
Sirius Minerals Plc
21 December 2015
21 December 2015
Sirius Minerals Plc
Interim results for period to 30 September 2015
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY)
("Sirius" or the "Company") announce the Interim Unaudited
Consolidated Results for Sirius and its subsidiaries ("the Group")
for the six-month period ended 30 September 2015.
Highlights
-- Resolutions to grant planning permissions by local planning
authorities considering applications for the key York Potash
Project infrastructure, including the mine and mineral transport
system, materials handling facility and supporting park and ride
applications.
-- Decision notices received for four of the five key
applications, formally granting planning permission.
-- Major upgrade to the take-or-pay offtake agreement with
existing Fortune 500 US-based agri-business customer, with the base
amount of polyhalite to be supplied tripled to 1.5 million tonnes
per annum. The initial contract term is extended from five to seven
years, with possible extension options for two additional five-year
periods.
-- Prequalification status received from Infrastructure UK, a
unit within Her Majesty's Treasury, for consideration of a Treasury
guarantee in relation to the York Potash Project.
Post-balance sheet events
-- Appointment of J.P. Morgan Cazenove as joint corporate broker
and Liberum Capital Limited, the Company's joint corporate broker,
appointed as Nomad.
-- Decision notice received for the remaining mine and mineral
transport system application, formally granting planning
permission.
-- Expiry of the warrants previously issued to investors on 14
March 2014, a process which raised approximately GBP23.3m for
general working capital purposes.
-- Expiry of the Judicial Review periods for all key planning
permissions, placing them beyond challenge.
Financials
-- During the six-month period ended 30 September 2015 the Group
made a consolidated loss of GBP4.7 million compared to a loss of
GBP6.7 million for the same period last year.
-- Cash resources at the end of September 2015 were GBP25.1
million compared to GBP27.4 million at 30 September 2014 and
GBP26.6 million at 31 March 2015.
-- The Group's net assets at 30 September 2015 were GBP153.4
million compared to GBP132.6 million at 30 September 2014 and
GBP146.6 million at 31 March 2015.
Chris Fraser, Managing Director and CEO of Sirius, comments:
"It has been a transformational period for Sirius, during which
time we have successfully secured the approvals for the key parts
of the Project infrastructure, increased the level of customer
contracts and advanced the financing strategy."
A short summary webcast has been uploaded to the Company website
www.siriusminerals.com.
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 the York Potash Project in the United Kingdom,
which 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' 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,
The progress we have made during this period on securing the key
approvals for the York Potash Project (the Project), increasing
bankable customer contracts and developing the long-term financing
strategy has been significant and hard-earned. In my view, they
will prove to be both a defining part of the Company's history and
the start of an even more exciting chapter ahead.
Sirius' success with the various key approvals for the Project
has dominated the period. We received our first two approvals in
April from Redcar and Cleveland Borough Council (RCBC) for the mine
and mineral transport system (MTS) and the materials handling
facility (MHF). Next came the determination of the North York Moors
National Park Authority (NYMNPA) application for the mine and
MTS.
The build up to the committee hearing and the meeting itself was
keenly followed locally, nationally and internationally. It was a
substantial moment of both relief and joy for our management team,
staff and everyone associated with the Project after so much hard
work when the NYMNPA endorsed the exceptional circumstances of the
Project and resolved to grant the application. Having sat through
the proceedings and aftermath of the decision I can say that the
outpouring of support and good wishes from so many different
stakeholders in the UK and around the world has been hugely
gratifying for everyone associated with the Company.
This Project has always been about so much more than the
substantial financial returns it can generate for our shareholders
(many of whom are from the local region). It is about a Project
that can deliver strong returns whilst creating jobs and prosperity
in a region that desperately needs more opportunity. It is also
about a mining and infrastructure Project that is uniquely
sensitive to the environment and has not been done before. And it
is about a British company set on breaking down the barriers to
become a global leader in a product and industry that the world
will rely upon to successfully feed its growing population. I know
this is a key reason why we have so much support for what we are
delivering and on behalf of our whole team I thank all of our
supporters for their continued backing.
Despite the macro picture in the commodities sector currently
being downbeat - with the valuations of the major mining firms
suffering particularly - Sirius and its share price has performed
extremely well. This is part due to the stage of the development
cycle that we are in but more due to the underlying and long-term
positive economics that underpin a product and Project like ours. I
remain incredibly optimistic for our own future, even though there
has also been downward pressure on potassium chloride (MOP) prices
and some negative sentiment in the near term regarding the potash
sector.
Price squeezes tend to root out the high-cost producers and
leave the most competitive businesses very well placed. Our Project
is targeting an extremely competitive operating cost structure due
to the expected mining efficiency (1:1 ore to product ratio), we
have simple low energy processing stages and we are in close
proximity to a deep water port. The unique multi-nutrient nature of
polyhalite (which we market as POLY4) is a key differentiator as
the potassium content is not the sole price-determining factor. The
other nutrients (sulphur, magnesium and calcium) also carry varying
values from market to market. In addition our POLY4 product is
typically benchmarked against sulphate of potash (SOP), the premium
form of chloride-free potash, which has substantially increased its
price premium to MOP.
The belief in our Project has been endorsed by our customers and
this was demonstrated by our major North American offtake partner
tripling its POLY4 supply agreement with us. The revised
take-or-pay agreement now stands at 1.5 million tonnes per annum,
extended to seven years from five, with possible extension options
for two additional five-year periods. Naturally we couldn't be
happier with the confidence that the counterparty, a major US-based
Fortune 500 agri-business, has shown in the Company by further
strengthening this relationship.
This agreement continues to demonstrate how we are breaking
convention in the global potash market - where substantial,
long-term sales contracts are not the norm. Customers continue to
recognise the outstanding economic value of POLY4 and the ability
to secure continuing supply that can deliver lasting success for
both parties.
In July we welcomed two new non-executive directors to the
Company. We were delighted to appoint Noel Harwerth and Jane Lodge
to the board. These appointments gave the Company a greater
percentage of independent directors on the board further
strengthening corporate governance. I would like to thank outgoing
board members Peter Woods and Chris Catlow, who both made valuable
contributions during the early years of the development of the
Company.
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There have been a number of post balance sheet events to bring
to your attention. These include receiving the approvals decision
notice from the National Park Authority and this subsequently
passing through any judicial review window unchallenged. In October
there were a number of announcements relating to director dealing -
including my own - as warrants from the 2014 fundraising were
exercised. 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.
As part of this change Macquarie agreed to step down as broker and
Nomad. I want to thank the Macquarie team for their support over
the last four years during important stages of the Company's growth
and we look forward to opportunities to work with them again in the
future.
During the six-month period ended 30 September 2015 the Group
made a consolidated loss of GBP4.7 million compared to a loss of
GBP6.7 million for the same period last year. Cash resources at the
end of September 2015 were GBP25.1 million compared to GBP27.4
million at 30 September 2014 and GBP26.6 million at 31 March
2015.
The Group's net assets at 30 September 2015 were GBP153.4
million compared to GBP132.6 million at 30 September 2014 and
GBP146.6 million at 31 March 2015.
The condensed interim unaudited consolidated financial
statements have been prepared under the going concern assumption.
However, the directors recognise that there are a number of
material uncertainties inherent in the Project. The impact of these
uncertainties on the directors' consideration of the going concern
assumption is set out in note 1 to these financial statements.
The principal risks and uncertainties facing the Group have not
changed since the year end. The principal risks are exploration and
development, reserves and resources estimates, mineral title risk,
commodity price risk, liquidity risk, currency risk, permitting,
community relations and competitor risk and operational and product
risk. Detailed explanations of these principal risks can be found
in the 2015 annual report.
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
options and the overall funding requirement can be delivered
through a range of mechanisms, with debt funding likely to make up
as much of the overall requirement as possible.
We look forward to progressing this and other options over the
next year as we continue to advance our world-class Project.
Kind regards
Russell Scrimshaw
Chairman
21 December 2015
INDEPENDENT REVIEW REPORT TO SIRIUS MINERALS PLC
Report on the condensed consolidated financial statements
Our conclusion
We have reviewed Sirius Minerals Plc's condensed consolidated
financial statements (the "interim financial statements") in the
interim report of Sirius Minerals Plc for the six-month period
ended 30 September 2015. Based on our review, nothing has come to
our attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union and the AIM
Rules for Companies.
Emphasis of matter
Without modifying our conclusion on the interim financial
statements, we have considered the adequacy of the disclosure made
in note 1 to the financial statements concerning the Group's
ability to continue as a going concern. The Group is involved in
efforts to complete feasibility studies and secure long-term
project finance for the York Potash Project, the outcome of which
is uncertain. These conditions indicate the existence of material
uncertainties which may cast significant doubt about the Group's
ability to continue as a going concern. The Group financial
statements do not include the adjustments that would result if the
Group were unable to continue as a going concern.
What we have reviewed
The interim financial statements comprise:
-- The condensed consolidated interim statement of financial position as at 30 September 2015;
-- The condensed consolidated income statement and condensed
consolidated statement of comprehensive income for the period then
ended;
-- The condensed consolidated statement of cash flows for the period then ended;
-- The condensed consolidated statement of changes in equity for the period then ended; and
-- The explanatory notes to the interim financial statements.
The interim financial statements included in the interim report
have been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the
European Union and the AIM Rules for Companies.
As disclosed in note 1 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim report, including the interim financial statements,
is the responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the interim report in
accordance with the AIM Rules for Companies which require that the
financial information must be presented and prepared in a form
consistent with that which will be adopted in the Company's annual
financial statements.
Our responsibility is to express a conclusion on the interim
financial statements in the interim report based on our review.
This report, including the conclusion, has been prepared for and
only for the Company for the purpose of complying with the AIM
Rules for Companies and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the interim
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
21 December 2015
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six-month period ended 30 September
2015
Unaudited Unaudited Audited
six-month six-month year
period period ended
ended ended 31 March
30 September 30 September 2015
2015 2014
Notes GBP000s GBP000s GBP000s
-------------- -------------- ------------
Revenue - - -
Administrative expenses (4,624) (6,641) (10,047)
--------------------------------------------------- ------ -------------- -------------- ------------
Operating loss (4,624) (6,641) (10,047)
Finance income 64 98 332
Finance costs (176) (177) (353)
-------------- -------------- ------------
Loss before taxation (4,736) (6,720) (10,068)
Taxation - - 503
-------------- -------------- ------------
Loss for the financial period (4,736) (6,720) (9,565)
--------------------------------------------------- ------ -------------- -------------- ------------
Loss per share
Basic and diluted 3 (0.2)p (0.4)p (0.5)p
--------------------------------------------------- ------ -------------- -------------- ------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six-month period ended 30 September
2015
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Unaudited Unaudited Audited
six-month six-month year
period period ended
ended ended 31
30 September 30 September March
2015 2014 2015
Notes GBP000s GBP000s GBP000s
-------------- ----------
Loss for the financial period
attributable to owners of the
parent (4,736) (6,720) (9,565)
--------------------------------------------------- ------ -------------- -------------- ----------
Other comprehensive income/(loss)
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translating
foreign operations (97) (279) (346)
Other comprehensive income/(loss)
for the period (97) (279) (346)
--------------------------------------------------- ------ -------------- -------------- ----------
Total comprehensive loss for
the period (4,833) (6,999) (9,911)
--------------------------------------------------- ------ -------------- -------------- ----------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2015
Unaudited Unaudited Audited
as at 30 as at 30 as at
September September 31 March
2015 2014 2015
ASSETS Notes GBP000s GBP000s GBP000s
------------------------------- ------ ----------- ----------- ----------
Non-current assets
Property, plant and equipment 1,869 2,055 1,932
Intangible assets 4 131,752 110,452 121,721
Total non-current assets 133,621 112,507 123,653
------------------------------- ------ ----------- ----------- ----------
Current assets
Other receivables 1,034 3,998 1,413
Cash and cash equivalents 25,140 27,426 26,640
Total current assets 26,174 31,424 28,053
------------------------------- ------ ----------- ----------- ----------
TOTAL ASSETS 159,795 143,931 151,706
------------------------------- ------ ----------- ----------- ----------
EQUITY AND LIABILITIES
Equity
Share Capital 5 5,545 4,739 5,362
Share premium account 227,282 200,185 216,586
Share based payment reserve 11,705 13,515 13,290
Accumulated losses (98,048) (92,957) (95,630)
Foreign exchange reserve 6,931 7,095 7,028
Total equity 153,415 132,577 146,636
------------------------------- ------ ----------- ----------- ----------
Current liabilities
Loan from third parties 744 2,975 1,980
Trade and other payables 5,636 8,379 3,090
Total liabilities 6,380 11,354 5,070
------------------------------- ------ ----------- ----------- ----------
TOTAL EQUITY AND LIABILITIES 159,795 143,931 151,706
------------------------------- ------ ----------- ----------- ----------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
for the six-month period
ended 30 September 2015
Share Share Share Accumulated Foreign Equity
Capital premium based losses exchange shareholders'
account payments reserve funds
reserve
Notes 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
period - - - (6,720) - (6,720)
Foreign exchange
differences
on translation
of foreign operations - - - - (279) (279)
------------------------ --------- --------------------- ----------------- ------------------ ------------- ------------------
Total comprehensive
loss for the
period - - - (6,720) (279) (6,999)
Convertible
loan 72 2,338 - 123 - 2,533
Share issue 7 - - - - 7
Share issue
costs - 17 - - - 17
Share based
payments - - 2,111 - - 2,111
Exercised options 2 33 - - - 35
------------------------ --------- --------------------- ----------------- ------------------ ------------- ------------------
At 30 September
2014 4,739 200,185 13,515 (92,957) 7,095 132,577
Loss for the
period - - - (2,845) - (2,845)
Foreign exchange
differences
on translation
of foreign operations - - - - (67) (67)
------------------------ --------- --------------------- ----------------- ------------------ ------------- ------------------
Total comprehensive
loss for the
period - - - (2,845) (67) (2,912)
Convertible
loan 41 949 - 172 - 1,162
Share issue 565 15,853 - - - 16,418
Share issue
costs - (682) - - - (682)
Share based
payments - - (225) - - (225)
Exercised options 17 281 - - - 298
------------------------ --------- --------------------- ----------------- ------------------ ------------- ------------------
At 31 March
2015 5,362 216,586 13,290 (95,630) 7,028 146,636
Loss for the
financial period - - - (4,736) - (4,736)
Foreign exchange
differences
on translation
of foreign operations - - - - (97) (97)
------------------------ --------- --------------------- ----------------- ------------------ ------------- ------------------
Total comprehensive
loss for the
period - - - (4,736) (97) (4,833)
Convertible
loan 43 1,102 - 255 - 1,400
Share issue 140 9,715 - - - 9,855
Share issue
costs - (121) - - - (121)
Share based
payments - - (1,585) 2,063 - 478
Exercised
options - - - - - -
At 30 September
2015 5,545 227,282 11,705 (98,048) 6,931 153,415
(MORE TO FOLLOW) Dow Jones Newswires
December 21, 2015 02:00 ET (07:00 GMT)
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