Sirius Minerals raising cash

Sirius Minerals is raising £15 million from a placing at 7p a share [now confirmed as "significantly oversubscribed"], an 8% discount to last night's closing price, to beef up the balance sheet and to bankroll further investment in the York Potash project. Clearly, the potential potash miner must remain in good financial health throughout the planning approvals process. Any sniff that the business is struggling for cash will not go down well with the local authorities.

At the end of February, Sirius held cash and cash equivalents of about £12 million. At the end of September, when the company confirmed a half-year loss of £6.7 million, it was £27.4 million. Importantly, two of the key planning decisions for the potash project are expected by the end of May.

An accelerated bookbuilding process led by Liberum and Macquarie to gauge interest in the fundraising ended at 10am. The placing is not underwritten, but Sirius will have had no trouble raising this kind of money.

Sirius chairman Russell Scrimshaw's Scrimshaw Superannuation Fund intends to subscribe for about 715,000 shares and Lord Hutton of Furness - the former Labour MP John Hutton who now sits on the Sirius board as a non-executive director - 30,000 shares.

Last month, Sirius submitted the Supplementary Environmental Information for its mine, mineral transport system and materials handling facilities to the relevant local authorities. In January, it pulled its application for Harbour facilities at Teesside.

Sirius said the decision to withdraw its current application for a development consent order would allow it to refine certain options in the application and speed up the process.

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