11 November 2011
Sirius Minerals Plc
(“Sirius” or the “Company”)
Results for the Six Months to 30 September 2011
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY), the globally diversified potash development group, are pleased to announce the Company’s results for the six month period to 30 September 2011.
Financial and Operational Highlights
• Initial results for first drill hole at York Potash announced;
• One of the world’s single largest potash intersections ever reported;
• Planning applications for the first six drill sites at the York Potash Project approved;
• Announcement of maiden York Potash resource planned for the first quarter of 2012;
• The appointment of Peter Woods to the Board as a non-executive director and the appointment of Graham Clarke as Operations Director;
• Liberum appointed as joint broker and Macquarie Capital appointed as Nomad and joint broker;
• Cash balance at period end of £14.9 million; and
• Sirius awarded up to £2.8 million from the UK Government’s Regional Growth Fund, subject to completion of due diligence.
Chris Catlow, Chairman of Sirius Minerals said:
“Sirius continues to make significant progress towards its goal of becoming a major potash producer. The outstanding initial results of our first hole at the York Potash Project have validated our confidence in the quality of the project. We are all looking forward to delivering similar results for future holes in the drilling programme.
“The appointment of Graham Clarke as Operations Director has strengthened the Company’s management team. Graham brings with him very relevant knowledge and experience from his 26 years at Cleveland Potash. We look forward to working with him over the coming years to bring York Potash into production.
“The future of Sirius has never looked brighter.”
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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. Today it holds properties in the United Kingdom (North Yorkshire), the United States (North Dakota), and Australia (Queensland and Western Australia).
The Company is additionally progressing ongoing Innovation initiatives into the secondary uses of salt and potash beds for energy storage and carbon dioxide sequestration.
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 the use of a sponsored ADR facility. Further information on the Company can be found at www.siriusminerals.com.
Dear Fellow Shareholder,
It’s only been a short time since I wrote to you in the Company’s 2011 Annual Report, explaining the rationale for the initial focus on the York Potash Project in our quest to become the New Potash Powerhouse. That strategy has paid off handsomely to date.
York Potash Drilling Progress
Sirius has just drilled the first new surface potash borehole for almost 35 years in North Yorkshire. Whilst this first hole adds to a very large database of historical exploration and analysis that has been conducted on the York Potash Project, it was pleasing to have delivered one of the world’s single thickest potash intersections ever reported. We announced that we had intersected 81.8 metres (true thickness) of total potash mineralisation across three seams with the hole being terminated while still in polyhalite mineralisation at 1,534 metres below sea level.
Based on the geological analysis and visual inspection of the cores, the hole intersected the Sneaton and Boulby potassium chloride seams and the Fordon polyhalite (potassium sulphate) seam and all three were successfully cored. Whilst detailed laboratory analysis has not yet been completed, initial indications are that within 65 metres of Fordon evaporites two zones contain a total of 19 metres (true thickness) of massive higher grade polyhalite. The results of the geophysical wireline logging tests on the hole gave average gamma readings across the whole of these massive polyhalite beds attributable to potassium that equates to polyhalite grades in excess of 80%. In addition, within these thick massive polyhalite zones there were certain zones of significantly higher than average grades apparent.
It is important to recognise that our exploration target of between 3.3 and 6.0 billion tonnes of polyhalite is based on an average thickness of just 5m of 67% to 94% polyhalite (19% to 27% K2SO4).
The drilling programme is now being accelerated on the back of these very encouraging initial results, and we look forward to bringing you the results as they become apparent. We remain confident of being able to announce our first resource figures during the first quarter of 2012.
Expanding Management Team
Your Company is making good progress on further strengthening its executive management under the leadership of Chris Fraser. I am particularly pleased to welcome Graham Clarke as our new Operations Director. Mr Clarke was, until his decision to join Sirius, the Managing Director of Cleveland Potash Limited, which operates the Boulby Mine in North Yorkshire, the UK’s only potash mine and the only operational polyhalite mine in the world today. He has spent his entire 26 year career at Boulby and brings with him not only invaluable experience to successfully commission and oversee a new polyhalite mine, but importantly a keen sense of the local area and communities.
UK Government Grant
As part of its funding strategy to stimulate economic growth, the UK Government, through the Department of Business Innovation and Skills has included Sirius in a funding initiative from the Regional Growth Fund to develop a world-leading Geosciences Centre in North Yorkshire. Sirius has been awarded up to £2.8 million, subject to the satisfactory completion of due diligence.
The aim of the Centre will be to accelerate the latest technological advances in mineral exploration, extraction and geosciences. Sirius will look to partner and collaborate with several UK and international universities and research organisations to build a “living laboratory” around the York Potash Project. The Centre will allow current and future geoscientists to develop new skills and receive training on cutting-edge, innovative technologies. The long-term vision for the Centre is to establish the facility as an independent developer of advanced geoscience technologies and services for the global mining industry.
We welcome the support from the UK Government which underlines the growing stature of Sirius Minerals and the York Potash Project. The planned development by Sirius of this world-leading Geosciences Centre reinforces to the local community in North Yorkshire our commitment to the area and our intention to provide significant long term employment opportunities.
The Company has also demonstrated its growing maturity within the investment community with Macquarie Capital accepting the role of Nomad and both Liberum and Macquarie Capital becoming joint brokers to Sirius. Both organisations have initiated research coverage, which is being read by a wide institutional audience.
During the six month period to 30 September 2011 the Company made a consolidated loss of £2.3 million, compared with a loss of £1.0 million last year. Cash resources as at the end of the period were £14.9 million and the Company’s net assets were £108.9 million.
In conclusion, Sirius continues to progress rapidly the York Potash Project whilst also ensuring that its other projects and new opportunities are further developed in the background. The future of your Company has never looked better, and we thank you for your continued valuable support.