24 Dec 2015 07:00
24 December 2015
Sirius Minerals Plc
Take or Pay Offtake Agreement
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") announce the signing of a major take or pay offtake agreement in China with Huaken International ("Huaken") for the purchase of polyhalite from the York Potash Project ("the Project").
Huaken was established in 1992 as a subsidiary of China State Farms Agribusiness Group and later registered as a joint stock company in 1997 and authorised to operate an import and export businesses including fertilizers, rubbers, steels and other products. Of note, Huaken is one of a restricted list of companies in China, with the right to import potassium fertilizer.
The agreement is for a period of seven years from first production and pricing is based on a formula linked to inputs that are consistent with a number of the Company's other offtake agreements. Pricing is currently in line with previous market guidance provided by the Company. The volume of the contract is for 500,000 tonnes in year seven (ramping up following construction of the Project). Huaken is purchasing the polyhalite to use it as a soil conditioner in China.
Studies have demonstrated that in addition to its proven role as a multi nutrient fertilizer, high quality polyhalite can also play a valuable role as a soil conditioner. Research undertaken on polyhalite by the Company has shown the benefits of adding it to highly acidic soils (of particular relevance to large areas of China). Polyhalite has shown to benefit soils, making them more resistant to soil erosion and also to have demonstrated suppressive effects on soil borne pathogens.
Chris Fraser, Managing Director and CEO of Sirius, comments:
"We are delighted to sign this important agreement with our partners in China and we look forward to working very closely with them for the long-term. Polyhalite's multi nutrient qualities have useful soil conditioning properties and it can assist in helping countries like China restore agricultural productivity and maintain food security for future generations."
For further information, please contact:
Sirius Minerals Plc Investor Relations |
Email: ir@siriusminerals.com |
Tel: +44 845 524 0247 |
Joint Brokers Liberum Capital Limited (NOMAD) |
Neil Elliot, Clayton Bush, Jill Li |
Tel: +44 20 3100 2222 |
J.P. Morgan Cazenove | Ben Davies, Jamie Riddell | Tel: +44 20 7742 4000 |
WH Ireland | Adrian Hadden | Tel: +44 20 7220 1666 |
Media Enquiries Tavistock | Jos Simson, Mike Bartlett, Emily Fenton | Tel: +44 20 7920 3150 |
About Sirius Minerals Plc
Sirius Minerals is the fertilizer development company focused on the development of the York Potash Project in the United Kingdom, 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.