Source - SMW
Sirius Minerals has updated on the financing for its North Yorkshire polyhalite project, commenting that it continues to make good progress with its two stage financing plan.

"Following a market sounding with potential senior debt lenders the Company has now mandated a group of six financial institutions experienced in mining and infrastructure project finance as Mandated Lead Arrangers (MLAs)," said Sirius in a statement.  

"The MLAs - Export Development Canada (EDC), ING; J.P. Morgan; Lloyds Bank plc; Societe Generale, Corporate & Investment Banking;  and The Royal Bank of Scotland Plc - have been mandated on the basis of a non-binding but mutually agreed term sheet, having undertaken initial due diligence of Project documents," the company said.

"Once approved the Stage 2 financing is expected to comprise of aggregate senior debt facilities of up to $2.6bn to fund the Stage 2 capital funding requirement and costs relating to financing the Project.  Financial close for the Facilities is expected to take place in 2018.

"The Company expects the Facilities to be provided from a group of commercial banks, Export Credit Agencies (ECA") and other financing institutions (including the MLAs) with a component receiving the benefit of a HMT Guarantee to be provided under the UK Guarantee Scheme (UKGS).  

"The MLAs will seek to arrange the Facilities and have indicated that they will fund up to US$700 million in aggregate of the Facilities.  The initial marketing conducted by the Company indicated that further funds will be available above and beyond the amounts indicated by the MLAs."

"The Infrastructure and Projects Authority (IPA), which was established in January 2016 by merging the Major Projects Authority with Infrastructure UK, and reports jointly to both HM Treasury ("HMT") and the Cabinet Office, has already prequalified the Project for consideration for a HMT Guarantee (announced 22 September 2015).  

"IPA has discussed the Stage 2 financing plan with the Company and confirmed its interest in supporting the Stage 2 financing for the Project. 

"The appointment of the MLAs does not constitute an offer of financing or an underwritten commitment by the MLAs to provide financing.  The MLAs' appointment is subject to market standard conditions including due diligence, credit and other business approvals, and execution of legal documentation acceptable to the MLAs.  

"Similarly, IPA's prequalification does not constitute an offer of financing or an underwriting commitment.  IPA requires its normal processes to be undertaken in addition to due diligence, such as satisfaction of conditions, HM Treasury credit process, risk committee, credit committee and ultimately Ministerial approval. 

"The Company intends to progress the Stage 2 financing, with the MLAs and IPA commencing detailed due diligence, following the successful completion of the Stage 1 financing.  The Company continues to progress the Stage 1 financing and is in active discussion with a number of parties undertaking due diligence.  

"The details of the Stage 1 capital structure and timing will be subject to further announcement at an appropriate time."

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