Sirius Minerals tweaks royalty arrangement with Hancock Prospecting
Source - SMW
Sirius Minerals said it had agreed to an amendment to a royalty arrangement entered into with Australia's Hancock Prospecting in October 2016 that would help it fund a fertilizer project in Yorkshire.
Hancock had agreed to a drawdown in relation to the $250m royalty component of the deed, with the proceeds provided no later than 19 September.
A $50m equity component of the deed would be provided once stage two financing commitments were obtained to fully fund the initial 10m tonne per annum development of the North Yorkshire polyhalite project.
The royalty drawdown provided sufficient liquidity to fund the project into the second quarter of 2019, when the proceeds of the stage 2 financing would be required.
The royalty component of the deed entitled Hancock to a 5% royalty on gross revenues from the project, payable on the first 13m tonnes per annum of production and 1% on revenue from volumes thereafter.
Hancock would also get around 200m Sirius shares, equivalent to 4% cent of the company.
'The drawdown of the Hancock Royalty is another important milestone as we develop into a leading fertilizer business,' chief executive Chris Fraser said.
'We are delighted to have an experienced partner in the mining industry aligned to Sirius and one that has a growing, long term agricultural interest.'
'The long-term nature of the royalty investment is well aligned to the underlying characteristics of this world-class, long-life asset.'