As a new chapter began for the Woodsmith polyhalite project last week, when diversified miner Anglo American officially took control, Sirius Minerals chairperson Russell Scrimshaw expressed his hopes for the project and apologised to shareholders for the value that the takeover had delivered.
Sirius, which delisted from the London exchange on March 17, was bought out at 5.5p per share, but shareholders were left counting their losses as many had bought their holding at four times or more that price. The stock traded at about 20p a year ago.
“I know there has been much disappointment regarding the value to shareholders that the takeover has delivered. However, given the circumstances, it was the only viable route forward.
“I am sorry we could not deliver what we hoped to, but we scoured the globe for a funding solution (without success) after our Stage 2 financings ran into difficulties. This will, of course, forever be a major regret to everyone involved, as it has meant that we at Sirius Minerals were not able to bring the project into production and revenue,” said Scrimshaw.
Sirius has spent $1.1-billion on physical development work at the project site, where construction started in May 2017, but needed another $3.3-billion to develop the ten-million-ton-a-year mine. The company struggled to find financing and last year scrapped a plan to raise $500-million in a bond sale.
In an open letter, Scrimshaw thanked landowners and the wider community in and around the Woodsmith project, as well as its customers and research partners.
In a separate statement, Anglo American CEO Mark Cutifani said the group would progress the project, which had “clear potential as a Tier 1 supplier of premium-quality, low-carbon fertiliser”.
Woodsmith is on the highest known high-grade polyhalite, with a compliant 88.8%-grade reserve of 290-million tons and a resource of 2.69-billion tons. Polyhalite is a multinutrient fertiliser.
“We share a vision of working towards a smarter future for mining – a safer future with a smaller environmental footprint to ensure that we can supply the essential metals and minerals the world needs, and do so sustainably. “The Woodsmith project exemplifies this approach,” said Cutifani.
He added that the Woodsmith project offered the prospect of sustained employment and economic stimulus for North Yorkshire and Teesside.
The Anglo CEO also recognised the role the project would play in its local communities. “I am pleased to confirm that we are today transferring £1-million into the project’s charitable foundation. “The foundation supports many good local causes, including education and skills training, community sports clubs and broader local regeneration. We intend to contribute further amounts of £1-million for each of the next three years, prior to the foundation receiving a substantial royalty income when the mine begins production.”