Sirius Minerals Regulatory News (SXX)

24 August 2012

Sirius Minerals Plc

Drilling Update

§ SM7 achieved the thickest intersection of high grade polyhalite in the York Potash Project to date with an estimated 85 m intersection of 88% polyhalite. Interpretation of true-thickness is awaiting completion of the first deflection from this hole (SM7A), due to localised faulting

§ SM4, SM4A and SM6 drilling results have proved continuity of high grade polyhalite (>80%) for a further 6.3 km to the south east and nearly 4 km to the south west of SM3

§ Discovery of a new sylvite seam (the Gough Seam) at the top of the Fordon evaporites in SM4, with gamma log analysis showing 8.7 m thickness at approximately 23% potassium chloride

The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company"), the globally diversified Potash development group, are pleased to provide an update of the drilling programme on the York Potash Project results from SM4 and SM4A and the preliminary results from SM6 and SM7.

Chris Fraser, Managing Director and CEO of Sirius said:

"The latest results from our drilling programme continue to build confidence in the extent and quality of the world class polyhalite resource at York Potash. Following detailed analysis of both drilling and the recently acquired seismic data, the Company is now working to upgrade the size and category of the resource estimate."

Overview of Drilling Status

SM4 (Gough) and SM6 (Newton House Plantation) were part of the original plan of widely spaced boreholes to characterise the regional structure of the polyhalite deposit and to probe its onshore limits. SM4 (and the deflection SM4A) were drilled 6.3 km south east of SM3, in a previously unexplored area. SM6 was drilled 3.6 km to the south west of SM3, in an area identified from seismic modelling as potentially anomalous on the line of a narrow east-west depression in the local basement (the Kirkham Abbey Formation).

SM5 (Waite Lane) was partially drilled, plugged and abandoned in April due to the outstanding results in the north of the project area and the distance to SM5.

SM7 (Mortar Hall) was drilled 1.7 km east of SM2 to probe the eastern limit of the shelf facies seam. It was completed on 2 June 2012 and a deflection (SM7A) is now in progress.

SM8 (Newton House West) is on hold pending results from the proposed borehole SM9 (Maybeck) and the petrographic and other lab analysis of SM6. Site preparation for proposed borehole SM9 is underway and should be completed for drilling to commence at the beginning of September.

SM7 (Mortar Hall)

SM7 was sited to probe the eastern extent of the shelf seam from SM2. Interpretation of legacy seismic data suggested the presence of a thick Fordon Evaporite sequence at this location, but there was also a small risk of structural disturbance. A high grade shelf of facies polyhalite was intersected between 1,431 m and 1,517 m below surface. Interpretation of the spectral gamma log and gyrosurvey indicates an intersection of 85.5 m at 88.4% polyhalite, including three prominent anhydrite or halite bands. If these bands are excluded, the intersection is 70 m at 95% polyhalite. However the hole is cut by a small fault zone and is locally brecciated and veined by halite.

Top and bottom contacts of the seam dip at ca. 30o and 10o respectively (relative to the near vertical borehole) and there is some internal disturbance close to the fault plane. Borehole imaging and an offset VSP (seismic) survey suggest that the structure dips to the south. Therefore, a deflection (SM7A) is being drilled to core the seam again in the apparent footwall of the localised structure with the expectation of getting an unfaulted and less disturbed core. Until that has been completed it is not possible to give a reliable true thickness for the seam as the effect of the dip and fault displacement is not yet known.

SM4 and SM4A (Gough)

SM4 was cored between 1,276.0 and 1,665.5 mbRTE (metres below Rotary Table Elevation) and intersected shelf facies polyhalite between 1,533 m and 1,611 m. Independent mineralogical analysis of the drill core was carried out by the British Geological Survey ("BGS") at its Mineralogy, Petrology and Biostratigraphy Facility. Each sample was dried, crushed and milled and homogenised; then a 4.5 g portion of the milled sample was micronised, and analysed by Quantitative X-Ray Diffraction ("QXRD").

The uppermost part of the seam is 5.1 m (true thickness) of high grade polyhalite (89.4%). This passes down into lower grade and erratically banded polyhalite and halite. The section of core from 1,532 m to 1,552 m was assayed and the key results can be presented as follows:

Notes: 1) The various zones identified are used for convenience of description. 2) True thickness estimated by correction 5o dip. 3) All polyhalite grades are weighted averages and shown on a 'dry' basis with typical accuracy of ±2.5% for mineral concentrations >60% ±5% for concentrations between 60 and 30%, ±10% for concentrations between 30 and 10% and ±20% for concentrations between 10 and 3%.

A deflection (SM4A) was drilled openhole (i.e. no core recovery) and intersected and wireline logged the polyhalite seam approximately 50 m away from SM4. The Schlumberger spectral gamma log provides a direct readout of the percentage of potassium from which the polyhalite content can be calculated. Comparison of the log for SM4 with the QXRD assay shows very close comparability and so the spectral gamma log can be regarded (where there is such good control) as a reliable surrogate for assaying. The results for SM4A again defined an upper high grade zone of 5.7 m at 86.2% polyhalite, followed by a zone of banded material. In this case, the banded section immediately below the high grade seam is also relatively high grade and is potentially mineable. Overall, SM4A proved 8.5 m (true vertical depth) at 82.4% polyhalite.

The results of SM4 and SM4A have demonstrated that as in the case of SM3 and SM3A, the shelf seam comprises a consistent and laterally persistent upper section of high grade polyhalite, immediately underlain by mineral with more variable grade, part of which may locally be mineable. Importantly, the gangue in the lower section is mostly halite which is relatively easy to separate from polyhalite.

SM4 has demonstrated the continuity of high grade mineral in excess of 5 m thickness for a further 6.3 kms southwards into the project area. In addition to this continuity, existing legacy borehole data prove the deposit continues further south to the edge of the York Potash area of interest near Scarborough.

The Sneaton and Boulby sylvite seams were also both present in SM4 with 4.9 m at 29.8% potassium chloride ("KCl") in the Sneaton and 6.5 m at 9.4% KCl in the Boulby. In addition, a new sylvite seam termed the Gough Seam, has been discovered in SM4 at the very top of the Fordon Evaporites and preliminary assessment from the gamma logs suggests 8.7 m at 23% KCl. This potentially significant discovery, with a limestone roof (for greater mining stability) will be followed up in the future. Assay data (ICP chemical analysis) are awaited from BGS to confirm the wireline interpretations of this important discovery.

SM6 (Newton House Plantation)

SM6 was located to probe the onshore limit of workable polyhalite. Its position also coincided with an east-west feature visible on reprocessed legacy seismic data and suggestive of a down-warping of the Fordon Evaporites either in a narrow sedimentary basin or a fault trough. The seismic data was inconclusive, but has recently been supplemented by York Potash's new 2D seismic survey and by a down-hole VSP survey. This should lead to a better understanding of the local geological structure.

SM6 was cored between 1,364 m and 1,667 m below surface and intersected shelf facies polyhalite between 1,584 m and 1,592 m below surface. Assay data is not yet available; the current interpretation is based on visual logging of the core and the Schlumberger spectral gamma log.

The intersection was disappointing insofar as the seam contains an anhydrite band. The overall seam thickness as cored is 7.62 m, but the best section of massive polyhalite was the potentially mineable 3.8 m of 83% polyhalite (estimated from wireline logging). The whole section including the barren band was 7.6 m at 52.5% polyhalite. It is not yet clear whether the anhydrite intercalation is a very localised lens of limited extent, or is an indication that the onshore western limit of mineable seam has been found.

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About Sirius Minerals Plc

Sirius Minerals is a globally diversified potash development company. Its primary focus is to bring on stream major potash mining facilities through the acquisition and development of projects overlying recognised potash deposits. It is developing the flagship York Potash Project in North Yorkshire, United Kingdom and also holds properties in the United States, and Australia. 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.

Competent Person's Statement and Risk Statement

The information in this Stock Exchange Announcement that relates to Mineral Exploration results, together with any related assessments and interpretations, have 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.

Qualified Person

Graham Clarke, Operations Director for Sirius Minerals Plc, who has reviewed this update, has over 26 years' experience in the potash mining industry. He has a Degree in Mining Engineering from the University of Nottingham 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.