Sirius Minerals makes solid progress on its North Yorkshire project

Fertiliser development company Sirius Minerals updated the market on the development of its North Yorkshire polyhalite project or the first quarter of 2017 on Thursday.

The FTSE 250 newcomer confirmed the project remained on budget and on schedule, as it continued to evaluate opportunities to accelerate components of the shaft and tunnel spend to further de-risk the implementation of the construction project, and potentially create opportunities for shortening the project schedule.

It said some shaft design optimisations had now been incorporated into the development plan, and options to bring tunnelling activities forward were in commercial discussion with the preferred tunnelling contractor.

Negotiations were also nearing completion with AMC for the broader shaft sinking design and build contract, the board reported.

“The contract is expected to be executed in early Q3 2017 on terms consistent with those previously articulated to the market,” it explained in its statement.

“The company is in discussions with the Hochtief Murphy Joint Venture in relation to agreements for early works activities which will form the foundation of the broader tunnelling programme.”

During the quarter, on 4 May, the company was issued with its formal commencement of development notice from the North York Moors National Park Authority.

Since then, it said it had continued to make “good progress” in clearing conditions required in advance of its rolling work programme.

Highways works around the Woodsmith Mine were now complete, as well as site access and initial groundwater protection work.

The main internal site access road had been laid and surfacing work is nearing completion, the board said, with the extension of the mine head platforms aldo commencing and the foundations for the on-site concrete batch plant now being built.

All tasks that require completion in advance of the commencement of the initial shaft sinking activities remained on schedule.

Site preparation activities had also started at Lockwood Beck, where Sirius planned an intermediate shaft for the mineral transport system.

Those works included enablement highways works and general groundworks to support future shaft sinking.

With regards to the geotechnical investigation, Sirius said the production shaft borehole was progressing with coring and testing completed to the 840 metre level.

The near-surface geotechnical programme had now been completed, and the results were being analysed and incorporated into the mine development design.

A programme of boreholes and seismic work to support the MTS design work had commenced, with geotechnical drilling to help inform the shaft design at Lockwood Beck also underway.

AMC was continuing “detailed design” of the shafts, the board explained, with a focus on completing the foreshaft component of the scope.

Diaphragm walling rigs were due to be mobilised to site in the third quarter of 2017 to commence work, and planning for securing the winding equipment required for the main shaft sinking activities had been completed and delivery of the equipment was on schedule.

The contractor continued to expand its implementation team in the UK, with the AMC team in the UK co-located in the Sirius office, as a “strong working relationship” was being developed according to the board.

“Commercial discussions remain ongoing in the key growth markets of Europe, Brazil, South East Asia and Africa,” Sirius said of the sales and marketing activity.

“Each of these opportunities represents material volume opportunities in major long-term markets for Sirius.”

The board said it was “encouraged” by the increasing market interest and positive engagement from multiple parties in its key markets.

Chris Fraser, managing director and CEO of Sirius, said it had been a “productive quarter” with “timely progress” made on site preparation works in advance of shaft sinking in the third quarter.

“The team on site and at our headquarters has grown considerably as we continue with the delivery of the Woodsmith Mine and its associated infrastructure.”