Sirius Minerals PLC: Polyhalite Take or Pay Offtake Agreement
August 18, 2014 (Source: Sirius Minerals PLC) — Highlights:
- Take or pay offtake agreement for polyhalite sales from the York Potash Project signed with large Central American fertilizer distributor
- Annual contracted tonnage ramping up to 250,000 tonnes per annum over five years, with an option for an additional 250,000 tonnes per annum
- Five year contract from first commercial production with an option to extend for a further five years
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) (“Sirius” or the “Company”) are pleased to announce the signing of an additional binding take or pay offtake agreement (“the Agreement”) for polyhalite from the York Potash Project.
The Agreement is with a well-established market leading Central American based fertilizer distributor that also has operations in Colombia (the “Customer”).
The Agreement is structured to align with York Potash’s proposed production ramp-up schedule. It is based on the supply of 150,000 tonnes per annum (“tpa”) in the first year of the Agreement, rising on an annual stepped basis to 250,000 tpa in the fifth year of production. The Agreement is for five years from first commercial production and can be extended by mutual agreement for a further five years. In addition the Customer has also been given the option to increase the minimum amount of this contract by an additional 250,000 tpa.
The price to be paid pursuant to 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.
This agreement will allow the Customer to distribute polyhalite through its various networks of local and regional companies to allow for servicing a greater range of farmers. The key regions for distribution include Guatemala, Belize, El Salvador, Nicaragua, Honduras, Costa Rica, Panama and Colombia.
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Chris Fraser, Managing Director and CEO of Sirius, commented:
“This agreement continues to extend the global sales reach of polyhalite and means we are now partnered with an organisation that controls a substantial proportion of the Central American crop input market.
“Our customer commitments now exceed five million tonnes per annum, with additional options for 750,000 tonnes per annum. We are having a number of ongoing discussions with customers seeking to tie down supply agreements for this important multi-nutrient mineral.”
About Sirius Minerals Plc
Sirius Minerals is a potash development company with properties in the United Kingdom (North Yorkshire) and the United States (North Dakota). Its primary focus is the development of the York Potash Project which has the world’s largest and highest grade deposit of polyhalite, a multi-nutrient form of potash containing potassium, sulphur, magnesium and calcium. 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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