Sirius Minerals talking to money men

Getting the world's largest and highest grade deposit of polyhalite into production was never going to happen overnight. Indeed, the pace of progress has, at times, been tortuous. But things have really come together for Sirius Minerals this year and patient investors in the potash hopeful are beginning to reap the rewards.

Results published Tuesday show Sirius posted a half-year consolidated loss of £4.1 million, down from £4.7 million in the six months to September 2015. But, of course, this is irrelevant. What is important is that substantial progress has been made.

Management completed the definitive feasibility study (DFS), made public a blue-print for the North Yorkshire potash mine, and last month received government approval for the harbour facilities; the final major approval needed for the project.

Builders have been booked and talks regarding financing are both "ongoing (and extensive)".

"The strategy is still to deliver the overall funding requirement through a range of financing mechanisms, with debt funding making up as much of the overall requirement as possible," we're told.

And there was good news last month, with the original $3.5 billion (about £2.4 billion at the time) estimate to get the mine near Whitby in North Yorkshire now reduced to $2.91 billion (£2.2 billion currently). Phase One costs are put at $1.1 billion.

We knew there was a big market for Sirius's fertiliser, but plenty more offtake agreements have been signed during the period. Polyhalite probable reserves at the mine were also increased by 30 million tonnes to 280 million tonnes, and at a better average grade too - 88.4%.

There have been plenty of ups and downs for Sirius shareholders, but things have come good in the past few months. The share price, down at just 10.4p in January, last week hit a record high at 38.5p. House broker WH Ireland said recently it thinks it'll do 60p in time.

Yes, the company still needs the money to make it happen, and the terms of any debt-funded deal will be important. But, with backing from a government desperate for home-grown projects in a post-Brexit world, there's nothing in this set of results to suggest Sirius will not succeed.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.