Sirius Minerals Plc Royalty financing agreement (3372N)
October 25 2016 - 2:00AM
UK Regulatory
TIDMSXX
RNS Number : 3372N
Sirius Minerals Plc
25 October 2016
25 October 2016
Sirius Minerals Plc
Royalty financing agreement
Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the
"Company") announces that it has entered into a royalty financing
agreement (the "Royalty Financing Agreement") for its North
Yorkshire polyhalite project (the "Project") with Hancock British
Holdings Ltd ("Hancock"), a subsidiary of Hancock Prospecting Pty
Ltd.
Under the Royalty Financing Agreement, Hancock has agreed to:
(1) purchase a royalty on the Project of 5 per cent of gross
revenue on the first 13 million tonnes per annum ("mtpa") of sales
produced in each calendar year and 1 per cent for sales volumes
above 13 mtpa in return for US$250 million (the "Royalty") and, (2)
upon drawdown of the Royalty purchase amount, Hancock will
subscribe for new ordinary shares in the Company in an amount of
US$50 million subject to certain conditions. The structure of the
Royalty Financing Agreement is similar to that of the arrangements
with mineral rights holders and runs for the life of the Project or
70 years, whichever is longer. The funding obligations of Hancock
under the Royalty Financing Agreement are guaranteed by Hancock
Prospecting Pty Ltd.
The Royalty Financing Agreement is conditional upon the Company
completing its Stage 1 financing (taking into consideration amounts
received under the Royalty Financing Agreement) and two
confirmatory due diligence items which will be satisfied prior to
the Stage 1 financing being finalised.
Once completed, drawdown of funds under the Royalty Financing
Agreement is conditional on, inter alia, notice having been given
to Hancock that the Company has expended US$630 million of the
total amount of its stage 1 financing; creation of the royalty
interest including the granting of certain obligations and
arrangements to secure such obligations in favour of Hancock, to
ensure that the Royalty attaches to certain assets which comprise
the Project; all material permits, commercial arrangements and
authorisations for the Project remaining in place; and other
drawdown conditions typical for an agreement of this nature.
The Royalty Financing Agreement is an important component of the
Company's capital funding plans as articulated in the announcement
of 17 March 2016 and updated most recently on 1 September 2016. As
referenced in the announcement on 24 June 2016, the Company
continues to make good progress with its previously articulated two
stage approach to financing. The details of the Stage 1 capital
structure and timing will be subject to further announcement at an
appropriate time.
Hancock Prospecting Pty Ltd is a privately owned company which
operates in the mining and agricultural sectors. Further
information on Hancock is available at
www.hancockprospecting.com.au or www.ginarinehart.com.au.
Chris Fraser, Managing Director and CEO of Sirius,
commented:
"We are delighted to have signed this agreement with such an
experienced party in the mining industry, as well as one that has
very successful and strong leadership and a long term and growing
agricultural interest."
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
------------------------- ------------------------------- ---------------
Hancock Enquiries
GM - Government & Media Sophie Mirabella Tel: +61 439
Relations 030 608
------------------------- ------------------------------- ---------------
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.
This information is provided by RNS
The company news service from the London Stock Exchange
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