TIDMSXX
RNS Number : 2294H
Sirius Minerals Plc
16 August 2016
16 August 2016
Sirius Minerals Plc
Interim results for period to 30 June 2016
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY)
("Sirius" or the "Company") announce the condensed interim
unaudited consolidated financial statements for Sirius and its
subsidiaries ("the Group") for the six-month period ended 30 June
2016.
Highlights
-- Completion of definitive feasibility study for the Company's
North Yorkshire Polyhalite Project (the "Project").
-- Selection of preferred construction contractors for the
Project - Associated Mining Construction (UK) and Hochtief Murphy
joint ventures.
-- The announcement of a Project capital funding requirement of
US$2.91 billion and a Stage 1 capital funding requirement of
US$1.09 billion.
-- Take-or-pay offtake agreement with Yunnan Dian Huang Peony
Industrial Group Co. Ltd (Dian Huang).
-- Appointment of Louise Hardy as a Non-executive director to the Board.
-- Increase of the Company's polyhalite probable reserve.
-- Announcement of the details of a potential de-icing salt
opportunity as part of an opportunistic strategy to generate
additional revenues.
Post-balance sheet events
-- Government approval for the harbour facilities element of the
Project which includes a new berth, ship loading facilities and
conveyor linkage to the materials handling facility and all the
compulsory purchase powers needed to develop them. As a result, all
major approvals for the Project have been granted.
Financials
-- During the six-month period ended 30 June 2016 the Group made
a consolidated loss of GBP4.1 million compared to a loss of GBP4.7
million for the six-month period (April to September) last
year.
-- Cash resources at the end of June 2016 were GBP16.9 million
compared to GBP29.1 million at 31 December 2015 and GBP25.1 million
at 30 September 2015.
-- The Group's net assets at 30 June 2016 were GBP161.7 million
compared to GBP165.2 million at 30 December 2015 and GBP153.4
million at 30 September 2015.
Chris Fraser, Managing Director and CEO of Sirius, comments:
"It has been another period of progress for Sirius, during which
time we have successfully secured the final major approval for our
important Project and set the platform for the advancement of our
financing strategy."
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
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 North Yorkshire polyhalite project, 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' 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,
This is the first interim report since the change in our
accounting reference date which was announced in March 2016 and
covers the six-month period from January to June 2016. The Board
considered that this change aligned with best practice amongst
major UK listed businesses and also provided greater timing
flexibility for future financing execution for our North Yorkshire
polyhalite project (the Project).
This half-year has been focused on moving our Project closer
towards construction. We were initially centred on the completion
of the definitive feasibility study (DFS) and the publication of
its material findings in March, which defined a very attractive
fertilizer business. The Project's business case is based on the
ability to generate annual earnings before interest, tax,
depreciation and amortisation (EBITDA) ranging between US$1 billion
and US$3 billion through various volume and price outcomes.
The completion of the DFS allowed our team to move onto the next
important stage of our Project development which was to select
preferred construction contractors. These were announced in June
and were the culmination of a 19-month highly competitive tendering
processes. The tenders ran in parallel with the preparation of the
DFS and, on behalf of the Board and management, I can say we were
both impressed by the quality of the submissions and thankful for
the efforts of all the bidders.
In selecting both Associated Mining Construction (UK) and
Hochtief Murphy joint ventures we are confident that we have two
excellent contractor teams that can help us successfully deliver
the Project. During our discussions with both groups they have been
able to refine their construction methodologies, update their
competitive tender rates and evolve their designs.
The outcomes of these processes has resulted in a total Project
capital funding requirement of US$2.91 billion and a Stage 1
capital funding requirement of US$1.09 billion. The Project has a
net present value of $15 billion (assuming ultimate production
levels of 20mtpa) rising to US$27 billion upon commencement of
production. The Project has an unlevered after tax internal rate of
return of 28%.
The period has also seen further progress with our customer
commitments. In addition to several routine agronomy updates from
our ongoing crop trial work, we announced a new take-or-pay offtake
agreement with Yunnan Dian Huang Peony Industrial Group Co. Ltd
(Dian Huang). This replaced our previous offtake contract with
Yunnan TCT and was facilitated by the latter. It also strengthened
the Company's supply position in Yunnan province by supplying a
customer closer to the end user and also by removing the conditions
that were included in the original TCT agreement.
Away from development matters, and turning to governance issues,
I can also reflect on the non-executive director change we made in
May when Louise Hardy replaced Stephen Pycroft on the Sirius
Minerals Board. Stephen's increasing work commitments in his role
as executive chairman of Mace meant that it was a logical time for
him to step down. I would like to reiterate the Board's thanks to
him for his valuable involvement and support over the last few
years.
Louise brings over 25 years' experience in the engineering
sector to the Company. In addition to a previous part time
executive role at Skanska, she currently holds non-executive
director roles at Ebbsfleet Development Corporation and Defence
Infrastructure Organisation, both executive non-departmental public
bodies sponsored by government departments. Her experience at Aecom
and particularly at Laing O'Rourke - where she worked as
Infrastructure Director as part of the consortium delivering the
London 2012 Olympics - will be invaluable to us as we move through
the next phases of development.
During the period there have also been other significant
developments for the Company. In May we announced an increase to
our polyhalite probable reserve. The reserve increased to 280
million tonnes at an average grade of 88.4% (up from the previous
level of 250 million tonnes at a grade of 87.8%). This added
further confirmation of the outstanding nature of this deposit,
which is already the world's largest and highest quality polyhalite
reserve.
During the period we also announced details of a potential
de-icing salt opportunity at our Project. Whilst the salt deposits
within our area of interest (and in close proximity to the
polyhalite deposits) have been well known for some time, its
extraction could be used in the future as an opportunistic strategy
to generate additional revenues in severe winters and if full mine
capacity is not being used for polyhalite. We have defined an
inferred resource of 550 million tonnes within the Project's area
of interest. The initiative, which is subject to approvals, remains
an optional and potential bolt-on to our main POLY4 business, but
is nevertheless one that could generate additional revenues and
also help the UK, particularly in harsh winters.
During the six-month period ended 30 June 2016 the Group made a
consolidated loss of GBP4.1 million compared to a loss of GBP4.7
million for the six-month period (April to September) last year.
Cash resources at the end of June 2016 were GBP16.9 million
compared to GBP29.1 million at 31 December 2015 and GBP25.1 million
at 30 September 2015.
The Group's net assets at 30 June 2016 were GBP161.7 million
compared to GBP165.2 million at 31 December 2015 and GBP153.4
million at 30 September 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 annual report for the period ended 31 December
2015. The principal risks are exploration and development, reserves
and resources estimates, mineral title risk, commodity price risk,
liquidity risk, currency risk, permits and licenses, community
relations, competitors, operational delays, employer and contractor
relations and product risk. In respect of the UK's vote in June
2016 to leave the EU, we do not feel the risk to our business is
great and there are also potential benefits for the Project. As an
export-focused business, any consequent fall in the value of the
pound sterling could be beneficial. Detailed explanations of these
principal risks can be found in the Company's last annual
report.
The Company's Board and management remain focused on the
efficient deployment of our existing funds. Together with our
external finance and advisory groups, they also continue to
concentrate on the ongoing (and extensive) work to secure financing
for the construction of our Project. The strategy is still to
deliver the overall funding requirement through a range of
financing mechanisms, with debt funding making up as much of the
overall requirement as possible.
Post balance sheet events
On 20 July 2016 we announced an approvals update, confirming
that we had received government approval for the harbour facilities
element of our Project. This approval includes the new berth, ship
loading facilities and the conveyor linkage to the materials
handling facility and includes all the compulsory purchase powers
needed to develop them. This was the last major approval needed for
the Project and we were clearly delighted to have secured it. This
decision provides a welcome prelude to the financing stages of the
Project.
I thank all shareholders for their support for the Company and
we look forward to an exciting year ahead as we continue to develop
our world-class polyhalite Project.
Kind regards
Russell Scrimshaw
Chairman
16 August 2016
INDEPENT REVIEW REPORT TO SIRIUS MINERALS PLC
Report on the condensed interim consolidated financial
statements
Our conclusion
We have reviewed Sirius Minerals Plc's condensed interim
consolidated financial statements (the "interim financial
statements") in the interim report of Sirius Minerals Plc for the
six-month period ended 30 June 2016. 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 secure short and long-term finance for its polyhalite
project in North Yorkshire, the outcome of which is uncertain.
These conditions indicate the existence of a material uncertainty
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 statement of financial position as at 30 June 2016;
-- 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
16 August 2016
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six-month period ended 30 June
2016
Unaudited six-month Audited Unaudited
period ended nine-month six-month
30 June 2016 period period
to 31 ended
December 30 September
2015 2015
Note GBP000s GBP000s GBP000s
----------------------------- ------------------ ------------------
Revenue - - -
Administrative expenses (4,615) (7,422) (4,624)
------------------------- ----- ----------------------------- ------------------ ------------------
Operating loss (4,615) (7,422) (4,624)
Finance income 79 99 64
Finance costs (9) (186) (176)
----------------------------- ------------------ ------------------
Loss before taxation (4,545) (7,509) (4,736)
Taxation 477 550 -
----------------------------- ------------------ ------------------
Loss for the financial
period (4,068) (6,959) (4,736)
------------------------- ----- ----------------------------- ------------------ ------------------
Loss per share:
Basic and diluted 3 (0.2p) (0.3p) (0.2p)
------------------------- ----- ----------------------------- ------------------ ------------------
Loss for the financial period shown above is fully attributable
to equity shareholders of the parent in all periods.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six-month period ended 30 June
2016
Unaudited Audited Unaudited
six month nine six month
period month period
ended period ended
30 June to 31 30 September
2016 December 2015
2015
Note GBP000s GBP000s GBP000s
---------- --------------
Loss for the financial period
attributable to owners of the
parent (4,068) (6,959) (4,736)
--------------------------------------------- ----------- ---------- --------------
Other comprehensive income/(loss)
for the period
Exchange differences on translating
foreign operations 17 (135) (97)
Other comprehensive income/(loss)
for the period 17 (135) (97)
--------------------------------------------- ----------- ---------- --------------
Total comprehensive loss for
the period (4,051) (7,094) (4,833)
--------------------------------------------- ----------- ---------- --------------
Total comprehensive loss shown above is fully attributable to
equity shareholders of the parent in all periods.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2016
Unaudited Audited Unaudited
as at 30 as at 31 as at 30
June 2016 December September
2015- Restated 2015- Restated
ASSETS Note GBP000s GBP000s GBP000s
------------------------------- ----- ----------- ---------------- ----------------
Non-current assets
Property, plant and equipment 1,833 1,849 1,869
Intangible assets 4 145,896 137,970 131,752
Total non-current assets 147,729 139,819 133,621
------------------------------- ----- ----------- ---------------- ----------------
Current assets
Other receivables 1,268 1,184 1,034
Cash and cash equivalents 16,929 29,093 25,140
Total current assets 18,197 30,277 26,174
------------------------------- ----- ----------- ---------------- ----------------
TOTAL ASSETS 165,926 170,096 159,795
------------------------------- ----- ----------- ---------------- ----------------
EQUITY AND LIABILITIES
Equity
Share capital 5 5,769 5,737 5,545
Share premium account 242,250 240,874 227,282
Share based payment reserve 6,155 7,624 11,705
Accumulated losses (93,723) (90,339) (92,421)
Foreign exchange reserve 1,283 1,266 1,304
Total equity 161,734 165,162 153,415
------------------------------- ----- ----------- ---------------- ----------------
Current liabilities
Loan from third parties 748 748 744
Trade and other payables 3,444 4,186 5,636
Total liabilities 4,192 4,934 6,380
------------------------------- ----- ----------- ---------------- ----------------
TOTAL EQUITY AND LIABILITIES 165,926 170,096 159,795
------------------------------- ----- ----------- ---------------- ----------------
The share premium account is used to record the excess proceeds
over nominal values on the issue of shares.
The share-based payment reserve is used to record the
share-based payments made in the Group.
Foreign exchange reserve records exchange differences which
arise on translation of foreign operations with a functional
currency other than sterling.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six-month period
ended 30 June 2016
Share Share Share-based Accumulated Foreign Equity
Capital premium payments losses exchange shareholders'
account reserve reserve funds
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 1 April 2015 5,362 216,586 13,290 (95,630) 7,028 146,636
Foreign
exchange
reserve prior
period
adjustment - - - 5,627 (5,627) -
At 1 April
2015-
Restated 5,362 216,586 13,290 (90,003) 1,401 146,636
Loss for the
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 - - - - - -
Share issue
costs - (121) - - - (121)
Share-based
payments - - (1,585) 2,063 - 478
Exercised
options 140 9,715 - - - 9,855
---------------- --------------------- ----------------- ------------------ ----------------- ------------------ ------------------
At 30 September
2015-
Restated 5,545 227,282 11,705 (92,421) 1,304 153,415
Loss for the
period - - - (2,220) - (2,220)
Foreign
exchange
differences on
translation
of foreign
operations - - - - (38) (38)
---------------- --------------------- ----------------- ------------------ ----------------- ------------------ ------------------
Total
comprehensive
loss for the
period - - - (2,220) (38) (2,258)
Share-based
payments - - (4,081) 4,302 - 221
Exercised
options 192 13,592 - - - 13,784
---------------- --------------------- ----------------- ------------------ ----------------- ------------------ ------------------
At 31 December
2015-
Restated 5,737 240,874 7,624 (90,339) 1,266 165,162
Loss for the
financial
period - - - (4,068) - (4,068)
Foreign
exchange
differences on
translation
of foreign
operations - - - - 17 17
---------------- --------------------- ----------------- ------------------ ----------------- ------------------ ------------------
Total
comprehensive
loss for the
period - - - (4,068) 17 (4,051)
Share issue 12 - - - - 12
Share issue
costs - (42) - - - (42)
Share-based
payments 20 1,418 (1,469) 684 - 653
Exercised
options - - - - - -
At 30 June 2016 5,769 242,250 6,155 (93,723) 1,283 161,734
---------------- --------------------- ----------------- ------------------ ----------------- ------------------ ------------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six-month period ended
30 June 2016
Unaudited Audited Unaudited
six-month nine-month six-month
period period period
ended to 31 ended
30 June December 30 September
2016 2015 2015
Note GBP000s GBP000s GBP000s
------------
Cash outflow from operating activities 6 (3,815) (5,307) (989)
---------------------------------------- ----- ----------- ------------ -----------------
Cash flow from investing activities
Purchase of intangible assets (8,392) (15,533) (10,036)
Purchase of plant and equipment (14) (1) -
Net cash used in investing activities (8,406) (15,534) (10,036)
---------------------------------------- ----- ----------- ------------ -----------------
Cash flow from financing activities
Proceeds from issue of shares 12 23,637 9,855
Share issue costs (42) (121) (121)
Finance income/(costs) 70 (87) (112)
Net cash generated from financing
activities 40 23,429 9,622
---------------------------------------- ----- ----------- ------------ -----------------
Net (decrease)/increase in cash
and cash equivalents (12,181) 2,588 (1,403)
Cash and cash equivalents at
the beginning of the period 29,093 26,640 26,640
Gain/(loss) from foreign exchange 17 (135) (97)
Cash and cash equivalents at
end of the period 16,929 29,093 25,140
---------------------------------------- ----- ----------- ------------ -----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UVONRNKAWAAR
(END) Dow Jones Newswires
August 16, 2016 02:00 ET (06:00 GMT)
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