Sirius Minerals makes progress at Woodsmith, flags further funding requirement

(Sharecast News) - Sirius Minerals updated the market on its progress for the quarter to 30 September on Thursday, reporting that its focus project, the Woodsmith Mine in North Yorkshire, remained on track to deliver first polyhalite and commercial production on time.The FTSE 250 company said procurement had been "substantially completed" for the major construction packages, which was a major prerequisite for second stage financing.Construction was said to be progressing in line with its 2018 guidance.The largest supply agreement to date, of 2.5 Mtpa peak aggregate volume, was signed during the quarter for key markets in South America including Brazil, taking its peak aggregate contract volumes to 8.2 Mtpa.Stage 1 royalty funding of $250m was received, with Sirius reporting that its capital funding requirement had been expected to increase by between $400m to $600m.The board said it was progressing financing alternatives."The business made excellent progress during the third quarter of 2018, achieving a number of key milestones," said Sirius Minerals managing director Chris Fraser."Procurement is now substantially complete for the major construction packages including the STRABAG AG agreement for the mineral transport system."Fraser said the announcement of Sirius' largest supply agreement to date with Cibra, Brazil's sixth largest fertiliser distributor, had enabled it to exceed the target peak aggregate POLY4 take-or-pay volumes intended to support second stage financing, with further agreements expected to be completed soon."During the quarter we confirmed Archer Daniels Midland, one of the world's largest agricultural processors and food ingredient providers, as our North American partner and starch supplier, which serves to underline the confidence that our world-class distribution partners have in POLY4 and its place in the future evolution of the global fertilizer market."The coming months are a pivotal period for the company as we work towards fully financing the construction of our world-class long-life polyhalite project."