York Potash - Preferred Contractors

Captain Qahn's picture

News: 2 June 2016 - Sirius Minerals Plc - Selection of preferred contractors

AMC UK (a joint venture between Thyssen Group and Redpath Group) selected as preferred contractors for mine site development

Hochtief Murphy Joint Venture selected as preferred contractors for mineral transport system development

9 month competitive tender process has delivered refined construction methodologies and cost estimates based on current market conditions

Stage 1 capital requirements for the start of the project are now being adjusted and are expected to reflect a reduced cost in the near future

Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") announces the selection of preferred contractors for key components of its North Yorkshire polyhalite project (the "Project") and the future revision to the Stage 1 capital requirements.

Chris Fraser Managing Director and CEO said: ""This is the culmination of a huge amount of work by both the successful bidders and those that have been unsuccessful and we thank all of the groups involved for their efforts.  We are delighted to now be moving forward with our selected partners towards the implementation of the Project."

Preferred contractors:  The tendering process for these contracts of work has been underway since October 2014 and run in parallel with the Definitive Feasibility Study ("DFS").  During the preparation of these tenders a significant amount of engineering and estimation has been undertaken.  The DFS provided a relevant and quality benchmark from which to compare and analyse the contractors' designs, methodologies and cost and schedule estimates.

Mine site development - shaft sinking

AMC (Associated Mining Construction) UK ("AMC") has been selected as the preferred contractor for the design and build of mine site development ("MSD") works.  The MSD package of work includes all of the shaft construction at the mine site and the shaft construction of the mineral transport system ("MTS").  This contract is a critical component of the Project and represents the critical path.   AMC UK is a joint venture company formed between Thyssen Schachtbau GmbH of Germany  and Thyssen Mining Construction of Canada, both members of the Thyssen Group, and JS Redpath Ltd of Canada and Deilmann-Haniel GmbH, both members of the Redpath Group.  AMC is a recognised leader in shaft sinking both around the world and in the potash sector.  It is currently constructing the K3 shafts in Canada for Mosaic, two shafts for the Ust Jaiwa Project for Uralkali in Russia and completed the Scissors Creek shaft at Rocanville in Canada for PCS last year.

As a result of the refinement of construction methodology by the tenderers, and the current competitive tender rates and design evolution, a significant saving from the DFS estimate is expected to have been captured through the tender process.  This costing is currently being worked through and the market will be updated accordingly in the near future.

The first phase of work for AMC will be a detailed front end engineering and design ("FEED") process where the designs used for the compilation of the tender and the revised budget will be further developed.  Some additional geotechnical information will inform this process but work on this element is expected to commence on site soon after the formal award of the contract (once the Stage 1 financing has been secured).

Mineral transport system

Hochtief Murphy Joint Venture ("HMJV") has been selected as the preferred contractor for the MTS.  HMJV is a joint venture between Hochtief (UK) Construction Limited ("Hochtief") and J. Murphy & Sons Limited ("Murphy").  HMJV has been successfully constructing major projects and infrastructure in the UK since 2001.  Most recently it completed the £250m C310 Thames Tunnel as part of the Crossrail scheme in London.

The MTS scope of work is currently for the design and build of the MTS tunnel to link the mine with the materials handling facility at Teesside.  The first phase of work will comprise a FEED process and a detailed geotech programme along the MTS route.  From this work a refined estimate based on a full design will be compiled, prior to agreement of the contract sum.  This work is expected to take over 12 months to complete and will be funded from the proceeds of the Stage 1 financing.  However commitment to the full MTS implementation scope of work will be part of the Company's Stage 2 financing for the Project.

Stage 1 capital funding requirement

The tender returns and ongoing engagement with the preferred contractors is being used to reformulate the Company's implementation budget and its financing plans.  Using the DFS, completed in March 2016, the Company is in the process of replacing the DFS estimates relevant to the scope of the contracts with refined estimates and implementation schedules from the contractors.  This is currently focused mainly on the Stage 1 capital requirement, given the majority of that funding is for the MSD scope of work.  The result of this process is expected to reflect a reduced cost to the Stage 1 requirements but will be released in the near future when ready.

Whilst this is a normal process of evolving a DFS estimate to a control estimate for the management and implementation of a project, this would normally occur much later.  The Company is able to do this now due to its previous decision to run the tendering process in parallel with the preparation of the DFS. 

As some of the expected reductions in the mine site components of the implementation estimate are contained within the Stage 2 financing, it is expected to result in a reduction of that amount also.  However further work through the FEED process is required for all the remaining elements of the Project in order to quantify what, if any, changes are required to the Stage 2 financing amounts. 

A key benefit of the two-stage financing approach adopted by the Company is that the detailed and specific estimates of the elements of the Project can be used to formulate the financing requirements for each of the financings. 

At the time the Stage 2 financing commitments are required, the Company will have completed all of the FEED work, all geotech work, tendered the MHF and port related assets, and undertaken a revised more detailed risk review for the estimation of appropriate contingencies.  This will ensure that the implementation budget for the remainder of the Project is as accurate as possible at the time the senior debt providers in Stage 2 are being requested to provide irrevocable commitments to the Company."

About as native as you can get :-))) Awesome.

I feel a tea party coming on... bones, china ... bags.

The AGM will be held at 1.00pm on Friday 24 June 2016 at The Royal York Hotel & Events Centre, Station Road, York YO24 1AA.

 

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9 Comments

Captain Qahn's picture

DFS & Graffiti

DFS - on the train:

https://sirius.present.me/embed/922/400/46534

Shore Capital: "Funding to germinate a fertiliser juggernaut"

http://www.proactiveinvestors.com/companies/news/126475/broker-hails-sir...

https://www.youtube.com/watch?v=VbagcoetpGw

Ah, so ...

http://tunneltalk.com/York-Potash-Project-02June2016-Civil-tunnelling-an...

Thats enuff Potty Ash Polly news for one week ...

https://www.youtube.com/watch?v=qcguxHc4hiU

PS  Forget to mention the finance ? Now't to discuss. Tabled... t'was always thus.

https://www.youtube.com/watch?v=2q9_ZEtuTR8

Benefitz Betty's picture

York Potash - Jobs

http://www.gazettelive.co.uk/news/teesside-news/sirius-potash-project-jo...

"Preliminary work is due to start in September. But the company says: “As we move closer towards construction, more information will be provided on the types of roles that will be available, when they will be required and the experience and types of qualifications that will be needed. This will include employment opportunity sessions that will be open to the public and attended by our construction contractors, which will be advertised on our website and beyond.”

"To register an interest in working for Sirius Minerals or its contractors, email your CV to recruitment@siriusminerals.com together with a short covering letter indicating the type of role you would be interested in. And for more about the project as a

http://siriusminerals.com/work-with-us/jobs/

Cheeeerrrrrzzzz

Preliminaries:

http://planning.northyorkmoors.org.uk/MVM.DMS/Planning%20Application/811...

Ah, so ... page 5:

http://planning.northyorkmoors.org.uk/MVM.DMS/Planning%20Application/811...

http://planning.northyorkmoors.org.uk/northgate/documentexplorer/applica...

Finance not required til Q4?

Benefitz Betty's picture

SXX: 'Project Implementation'

http://siriusminerals.com/investors/project-implementation/

"Since October 2014, in parallel with the preparation of the Definitive Feasibility Study (DFS), the Company has been conducting a detailed early engagement and competitive tendering process with specialist contractors for critical aspects of the Project’s construction. The completion of the DFS and the selection of preferred contractors for the mine site development and mineral transport system has now enabled the Company to confirm a refined implementation plan for our North Yorkshire polyhalite project.

This detailed work has resulted in material reductions in the financing requirements for the Project and refined economic return metrics, as set out below:

  • Total capital funding requirement has been reduced to US$2.91 billion, which represents an 18% reduction in comparison to the estimate in the DFS
  • Initial capital funding requirement has been revised to US$1.09 billion, which is a 33% reduction
  • The Project’s net present value (NPV) has been updated to US$15.2 billion today at a 10% discount rate
  • The Project’s after-tax debt-free internal rate of return (IRR) has been updated to 28%

This has been made possible by adopting the preferred contractor designs and estimates, changing the Project implementation approach to an ‘owner’s team’ from the PMC approach considered in the DFS, and refining other components of the DFS estimate. Further details can be found in the RNS announcement and the AGM presentation below.

The DFS confirmed the Company’s business strategy and set the foundation for realising our aim of becoming a leading global multi-nutrient fertilizer producer. More detail is provided in the DFS presentation, the highlights of which include:

  • Large-scale installed production capacity of 10 Mtpa, with the foundation for an increase to 20 Mtpa
  • Low-cost, operating costs estimated at an average of $27.2 per tonne, delivering industry leading cash margins of 70 to 85%
  • Long-life polyhalite resource of 2.6 billion tonnes, representing a Project asset of 100+ years
  • Proven and growing market demand for POLY4, which the Company will meet through its disruptive market penetration strategy"

28% ... ? 82, 72 ...

Captain Qahn's picture

SXX: Out to Tenders

http://siriusminerals.com/work-with-us/suppliers/

Geotechnical Investigations:

The scope will involve supplementary ground investigation, logging and testing at the mine site. Further geotechnical investigation works will be tendered in due course.

Site Prep:

The scope of the final stage site preparation tender will involve the establishment of the construction site in advance of the main shaft sinking works at the mine site and intermediate shaft at Lockwood Beck. Works include construction of working area platforms, site access and haul roads.

Support Services:

Other work packages, such as the services necessary for the effective functioning of a major construction site, will be announced on the website. These could include site accommodation, security, haulage, lighting and ancillary civil construction works.

All that boulder moving was to 'plate' test :-))

I can throw a few plates mind ....

The Sirius Website is updating with opportunities regularly... mebbe a flag?

Tom's thumbs .... darn it ..

https://www.youtube.com/watch?v=gOW_azQbOjw

Ah, so ... if he knows he ain't saying, mind who'd roll over a Matt to get to Chukka  :-))

https://www.youtube.com/watch?v=zblEqDvOfy0

tis all good to go ...

Subject.

Benefitz Betty's picture

SXX: World Fertiliser Day

http://fertilizerday.com/

What is Global Fertilizer Day?

We celebrate fertilizer as one of the most important inventions of our time, which has saved billions from famine and will continue to feed the world for decades to come.

Half of all the food grown around the world today, for both people and animals, is made possible through the use of fertilizer. Global Fertilizer Day marks the anniversary of Fritz Haber’s discovery of ammonia synthesis in 1908, which sowed the seeds for the Green Revolution of the early 20th century. During this time, widespread adoption of agricultural technologies lifted millions out of poverty and famine, allowing our world to grow and develop as we know it today...."

Yep, and half the cr*p in the World is consumed via Gates.

Oh.  http://www.thescarboroughnews.co.uk/news/business/yorkshire-businesses-c...

Cheers.

;-) https://www.youtube.com/watch?v=JWsRz3TJDEY

ppsop .. wotever:-)

https://www.youtube.com/watch?v=_KztNIg4cvE

Make my day, punk.

Ah, so ... my kinda Duck:

http://www.bbc.co.uk/news/world-europe-37650077

Vikings ? http://www.bbc.co.uk/news/world-europe-37650274