Sirius Minerals PLC: Polyhalite Take or Pay Offtake Agreement
January 21, 2014 (Source: Sirius Minerals) — Highlights:
- Fortune 500 US based agri-business signs take or pay polyhalite supply agreement from the York Potash Project
- Agreement for at least 500,000 tonnes per annum, with option for customer to take up to one million tonnes per annum
- Total of polyhalite sales commitments now 4.8 million tonnes per annum
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) (“Sirius” or the “Company”) are pleased to announce the signing of a take or pay supply agreement (“Agreement”) for polyhalite from its proposed York Potash Project (“the Project”).
The Agreement is for the sale of at least 500,000 tonnes per annum of polyhalite for an initial period of 5 years with a possible renewal for a further 5 years. The Agreement is for polyhalite sales in North America and certain countries in Africa, South East Asia and Central America. Under the Agreement the counterparty has the option to take up to an additional 500,000 tonnes per annum.
The price to be paid under the Agreement is based on a formula linked to the market price of nutrients contained in polyhalite and is in line with previous market guidance. The counterparty is a major US based Fortune 500 agri-business.
Chris Fraser, Managing Director and CEO of Sirius, commented:
“There can be no greater endorsement of the market for polyhalite or importance of the Yorkshire Coast to the world’s fertilizer industry than a multi-year take or pay offtake agreement with such a significant global agri-business.”
As summarised in the table below, there are currently agreements and commitments for customers to purchase a total of 4.8 million tonnes per annum of polyhalite from the York Potash Project. The initial Phase 1 production target of the Project is 5 million tonnes per annum.
|Agreement||Million tonnes per annum|
|Offtake Agreement (subject to meeting certain conditions)||1.0|
|Memorandum of Understanding||2.0|
|Framework Sales Agreements / Letters of Intent||1.3|
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) and the United States (North Dakota). 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.
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