Sirius Minerals Regulatory News (SXX)

19 May 2016

Sirius Minerals Plc

De-icing salt opportunity

§ Scoping study identifies de-icing salt as an additional product line

§ 550 million tonnes JORC compliant Inferred Mineral Resource of high grade de-icing salt

§ Salt production could be used to utilise excess infrastructure capacity as polyhalite production levels vary according to the Company's price and volume strategy

§ US$29m capital investment required to facilitate additional infrastructure capable of producing at a rate of 2 Mtpa

§ Disruptive influence as a low cost salt producer, ideally located to serve major markets of Europe and North America as a swing supplier

Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") provides an update on its high grade de-icing salt opportunity.

A JORC compliant Inferred Mineral Resource ("the Resource") of halite (salt) of 550 million tonnes has been delineated at the Company's North Yorkshire polyhalite project (the "Project"). The Resource is within the immediate polyhalite mining area and will be accessible from the planned underground mining infrastructure for the Project and has an in situ mean grade greater than 93% NaCl, which is suitable for consumption in the de-icing salt market. It also includes 210 million tonnes of higher grade halite with a mean grade greater than 95% NaCl.

With the majority of the key infrastructure (shafts and tunnel) at the Project able to extract 20 million tonnes per annum ("Mtpa") of ore, salt could also be extracted as polyhalite production levels vary according to the Company's price and volume strategy. The Company's salt scoping study shows that it could extract up to 2 Mtpa for an investment of up to US$29 million as an optional bolt-on to the existing polyhalite mine plan. The assumed capital and operating estimates are based on a +/- 25% accuracy level and have been reviewed by SRK Consulting (UK) Ltd.

It would adopt an opportunistic approach, bringing on supply when market demand for salt was strong, although not at the expense of its polyhalite production. The Company's Project and its port is centrally located and able to readily access the two primary target markets of Western Europe and North America which, depending on the winter weather conditions, are between 10 to 15 Mtpa and 20 to 30 Mtpa in size respectively.

Chris Fraser, Managing Director and CEO of Sirius, comments:

"Our clear priority is the rapid development of the world`s largest and highest grade polyhalite resource but the increased optionality of our significant additional resource of high grade salt is an exciting future business opportunity. The bolt-on to the core infrastructure could allow us to make an opportunistic entry into a commoditised global market, generating an additional valuable revenue stream."

Resource

Through a combination of data from historical exploration and that conducted as part of Sirius' own exploration programme, a JORC compliant Inferred Mineral Resource of halite (salt) of 550 million tonnes - all of which is within the currently planned polyhalite mining area - has been delineated by FWS Consultants Limited ("FWS"). Further, if the mine infrastructure is extended as mining progresses and more polyhalite is demonstrated to be present (as the Company believes) then this will access more halite and so is highly likely to increase the Inferred Mineral Resource presented here which remains open in all directions.

Accessibility of the resource

The salt would be readily accessible from the polyhalite workings via the driving of twin ramps into the halite seam that could be constructed within a 12 month period. The salt would be mined using conventional methods utilising the same mining equipment planned for use in polyhalite mining with over 2 Mtpa achievable from a single production unit. While additional approvals would be required to extract salt, the Company is confident that given the minimal above-surface infrastructure required, that it would be granted as required.

The Project's seaboard location is strategically placed to access the main de-icing salt markets in North America, Europe and the UK.

The market

Independent research conducted by Roskill Consulting Group has confirmed that Sirius' projected FOB costs are below that of major competitors in Europe and North America. The combined annual consumption of de-icing salt in these markets is between 30 and 45 million tonnes per annum dependent on weather conditions.

The investment required to unlock an annual production of 2 Mtpa is low at under US$30 million. Production costs of US$22/t FOB are estimated and in a severe winter this strategy could add between US$32 million and US$104 million of EBITDA, depending on the nature of the industry response. In mild winters the potential EBITDA contribution could range from US$14 million to US$54 million, again depending on the nature of the industry response.

A short webcast providing further commentary on the opportunity is available on the Company's website.

For further information, please contact:

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.

Qualified Persons

The information in this Stock Exchange Announcement that relates to Mineral Resources, together with any related assessments and interpretations, has been verified by and approved for release by Dr Frederick W. Smith FIMMM., CEng, CSci., a qualified geologist and full-time employee of FWS Consultants Limited ("FWS"), Environmental and Geological Consultants. Dr Smith, who is a Fellow of the Institute of Materials, Minerals and Mining (IMMM), has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person for the purposes of the AIM Rules. Dr Smith and FWS consent to the inclusion of the information contained in this announcement and the respective references to them in the form and context in which they appear.

Graham Clarke, Operations Director for Sirius Minerals Plc, who has reviewed this Stock Exchange Announcement, has over 26 years' experience in the potash mining industry. He has a Degree in Mining Engineering from the University of Nottingham, is a Fellow of the Institute of Materials, Minerals and Mining (IMMM) and extensive operational experience gained at Cleveland Potash Limited in the mining of the Boulby Potash seam and the exploration and development of the upper Fordon Polyhalite seam.