SXX: "Hancocks"

Benefitz Betty's picture

"25 October 2016

Sirius Minerals Plc

Royalty financing agreement

Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) ("Sirius" or the "Company") announces that it has entered into a royalty financing agreement (the "Royalty Financing Agreement") for its North Yorkshire polyhalite project (the "Project") with Hancock British Holdings Ltd ("Hancock"), a subsidiary of Hancock Prospecting Pty Ltd.

Under the Royalty Financing Agreement, Hancock has agreed to: (1) purchase a royalty on the Project of 5 per cent of gross revenue on the first 13 million tonnes per annum ("mtpa") of sales produced in each calendar year and 1 per cent for sales volumes above 13 mtpa in return for US$250 million (the "Royalty") and, (2) upon drawdown of the Royalty purchase amount, Hancock will subscribe for new ordinary shares in the Company in an amount of US$50 million subject to certain conditions.  The structure of the Royalty Financing Agreement is similar to that of the arrangements with mineral rights holders and runs for the life of the Project or 70 years, whichever is longer.  The funding obligations of Hancock under the Royalty Financing Agreement are guaranteed by Hancock Prospecting Pty Ltd.

The Royalty Financing Agreement is conditional upon the Company completing its Stage 1 financing (taking into consideration amounts received under the Royalty Financing Agreement) and two confirmatory due diligence items which will be satisfied prior to the Stage 1 financing being finalised.    

Once completed, drawdown of funds under the Royalty Financing Agreement is conditional on, inter alia, notice having been given to Hancock that the Company has expended US$630 million of the total amount of its stage 1 financing; creation of the royalty interest including the granting of certain obligations and arrangements to secure such obligations in favour of Hancock, to ensure that the Royalty attaches to certain assets which comprise the Project; all material permits, commercial arrangements and authorisations for the Project remaining in place; and other drawdown conditions typical for an agreement of this nature.

The Royalty Financing Agreement is an important component of the Company's capital funding plans as articulated in the announcement of 17 March 2016 and updated most recently on 1 September 2016.  As referenced in the announcement on 24 June 2016, the Company continues to make good progress with its previously articulated two stage approach to financing.  The details of the Stage 1 capital structure and timing will be subject to further announcement at an appropriate time.

Hancock Prospecting Pty Ltd is a privately owned company which operates in the mining and agricultural sectors.  Further information on Hancock is available at www.hancockprospecting.com.au or www.ginarinehart.com.au.

Chris Fraser, Managing Director and CEO of Sirius, commented:

"We are delighted to have signed this agreement with such an experienced party in the mining industry, as well as one that has very successful and strong leadership and a long term and growing agricultural interest."

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations."

All very British :-)) stiff upper lips and all that ...

Erm ... 'gobsmacked'? 

Whooops ...

It means Thunderbirds are go !!!! :-)))

http://www.ginarinehart.com.au/

slight touch of vertigo ...  aussie royalty indeed...

(insert your own Bolly/Gene clip) ;-)

https://www.youtube.com/watch?v=Heu0f-Ziae0&list=RDn1QTnc7lqCE&index=4

Zzzzzz...

Tags: 

12 Comments

Benefitz Betty's picture

Hancocks Explained

http://www.hancockprospecting.com.au/about-hancock-prospecting/board-and...

Fingers in Pies.... this is a huge thumbs up for the York Potash project. 

that's this mornings desk top scuppered

"Reuters – 30 minutes ago
SYDNEY (Reuters) - Hancock Prospecting (Pty) Ltd, controlled by Australian billionaire iron ore magnate Gina Rinehart, on Tuesday said it was investing $300 million (245 million pounds) in British fertiliser business Sirius Minerals Plc (SSX.L) as it moves deeper into agriculture."

Ah, so , the richest woman in the world huh?  I could be the most annoying :-))

https://www.youtube.com/watch?v=m_IIMpLNm24

WIP

Know your gnomes...

https://www.ft.com/content/c99658e2-e6d9-3335-937a-6716166a8fd8

"The deal with Sirius would mean Hancock paying $250m for the rights to 5 per cent of the gross royalties on the first 13m tonnes of Sirius’ fertiliser sales every year, and 1 per cent above that level. Hancock would also put $50m of equity into the project.

Chris Fraser, chief executive of Sirius, said:

We are delighted to have signed this agreement with such an experienced party in the mining industry, as well as one that has very successful and strong leadership and a long term and growing agricultural interest.

Analysts at Liberum said:

The deal is a clear endorsement of the project from a major Australian mining and agricultural business, reduces the required Phase 1 financing to $800m and is significantly less dilutive than straight equity.

Copyright The Financial Times Limited 2016. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web."

 

 

Benefitz Betty's picture

YCR: Oz 'Air'es Invests in Whitby

"9:38am 25th October 2016
(Updated 9:41am 25th October 2016)

One of the Worlds richest women has made a £246 million pound investment in to the Whitby Potash Mine.

Australian Billionaire Gina Rinehart is to but shares in Sirius Minerals through her mining company - Hancock Prospecting.

She will also buy royalties on the fertiliser produced by the mine.

The project involves the construction of a mine, a 37 kilometre underground conveyor system, and materials handling and port facilities. The first phase of the project will involve the development of 10 million tonnes of annual capacity, with potential to quickly increase to 13 million tonnes and, subject to further approvals, 20 million tonnes per annum.

Mrs Rinehart's deal will see her Hancock Prospecting buy $US50 million of Sirius shares, a 5 per cent royalty stream of the first 14 megatonnes of fertiliser produced by the mine annually and the right to purchase up to 20,000 tonnes of product each year for use on her expanding Australian agricultural holdings.

Mrs Rinehart said in a statement.

"This project delivers a new and natural product which is relevant to Hancock's focus on agriculture and after years of field tests and across many crop types, demonstrated improved yields,"  "Sirius has a large, high quality mineral resource and is located in a stable jurisdiction with a competitive tax rate".

"The project and has the potential to become one of the world's leading producers of multi-nutrient fertiliser, and could have a life of 100 years – this fits with my approach of investing in strategic areas for the long term."

Sirius is run by Australian entrepreneur and former BRW Young Rich List member Chris Fraser, who was an accountant at KPMG before making a move to investment banking with Rothschild and then Citigroup, where he acted as lead adviser on a $2 billion capital financing deal for Fortescue Metals Group. He then went into mining himself with Sirius."

http://www.yorkshirecoastradio.com/news/local-news/2133209/australian-bi...

 

Benefitz Betty's picture

SXX: Guardian Phrase

https://www.theguardian.com/business/2016/oct/25/australias-richest-woma...

Now't worth seeing there ...

Anyhoos, this is the first stage I of Phase I funding, Phase II as explained here (if you can read) :

"... The Company's financing plan was articulated in the announcement of 17 March 2016 and updated in the capital funding requirement reduction announcement of 24 June 2016.  The Company continues to make good progress with its two stage financing plan....

"...Once approved the Stage 2 financing is expected to comprise of aggregate senior debt facilities of up to US$2.6 billion (the "Facilities") to fund the Stage 2 capital funding requirement and costs relating to financing the Project.  Financial close for the Facilities is expected to take place in 2018.

"...The Company intends to progress the Stage 2 financing, with the MLAs and IPA commencing detailed due diligence, following the successful completion of the Stage 1 financing.  The Company continues to progress the Stage 1 financing and is in active discussion with a number of parties undertaking due diligence.  The details of the Stage 1 capital structure and timing will be subject to further announcement at an appropriate time."

http://otp.investis.com/clients/uk/sirius_minerals/rns/regulatory-story....

So, erm, the Hancock deal is Step 1 of Stage 1   ... tho underwriting the entire  York Potash project mebbe a step too far ... todays RNS most certainly underlines the global confidence in the Whitby project for both institutional and private investors.   

No doubt the stonercorns will clamber out soon...   phases ... stagers ... Sphericals.

Ah, so  ...  phaser & the pharoahs ?

Ouch.  Belts  ... yak yak

Zzzzzzz.

 

 

 

 

Benefitz Betty's picture

NE: Meat on the Bone

http://www.thenorthernecho.co.uk/business/14822143.Sirius_Minerals_gets_...

Steve Hugill add in perspective :-))

"...Under the terms of the finance deal, Hancock will pay £205m ($250m) for the rights to five per cent of gross revenue on the first 13 million tonnes of sales every year, and another one per cent for sales above the 13 million figure.

Hancock, a subsidiary of Hancock Prospecting which has growing agriculture interests, will also subscribe to ordinary shares in Sirius for another £41m ($50m).

Sirius hopes to start production in 2021.

Chris Fraser, Sirius’ managing director and chief executive, said the Hancock agreement represented another step forward in the company’s quest to begin work.

He added: “We are delighted to have signed this agreement with such an experienced party in the mining industry, as well as one that has very successful and strong leadership and a long-term and growing agricultural interest.

“We are focused on the development of what we believe to be the world’s largest high-grade known polyhalite deposit.

“Considering Mrs Rinehart’s and Hancock’s expertise in mining and agriculture, this investment is a significant vote of confidence.”

Mrs Rinehart said Hancock, which has a long history of iron ore work, sees Sirius’ plans as intrinsic to its future growth.

She added: “Sirius has the potential to become one of the world’s leading producers of multi-nutrient fertiliser.

“This fits with my approach of investing in areas for the long-term, and I hope the product is of assistance to many Australian farmers.”

The Northern Echo previously reported how Sirius had revised down construction budgets, saying it now needs $2.91bn (£2.1bn).

The Northern Echo understands officials are continuing to finalise funding arrangements with other prospective lenders...."

 

Benefitz Betty's picture

SXX: Proactive & Gazette

Benefitz Betty's picture

SXX: Cannes Fertiliser Conference

Benefitz Betty's picture

SXX: Low Hanging Fruit

Tomatoes are fruit :

http://www.proactiveinvestors.co.uk/companies/news/167918/sirius-mineral...

"investment in Sirius Minerals PLC’s (LON:SXX) fertiliser project in North Yorkshire is a complementary extension of Gina Rhinehart’s ‘mining to dining’ strategy, says Yuen Low, analyst at Shore Capital.

Rhinehart, one of the world’s richest women, is investing US$300mln in the UK mine development via her company Hancock Prospecting.

Hancock, which will take US$50mln of Sirius shares, will form an important plank of the overall funding package for the AIM-listed group’s North Yorkshire Polyhalite Project.

Under the terms of the agreement, Hancock British Holdings is acquiring a 5% royalty on the first 13mln tonnes of fertiliser produced every year and 1% on anything over that output figure at a cost of US$250mln.

The funding won’t kick in once the initial US$630mln of remaining Phase 1 project financing has been secured and spent.

Sirius strikes US$300mln deal with Gina Rinehart company

Hancock deal values Yorkshire mine at US$3.9bn

Sirius Minerals seen as compelling for responsible investment

Hancock is best known for its iron ore operations in Australia’s Pilbara region, where it runs mines with Rio Tinto, but, it has in recent years invested in agricultural assets.

Notably, in partnership with a Singapore investor, it bid A$365mln for a cattle operation spanning an area (almost) the size of Scotland.

“Hancock’s recent focus on agriculture was the result of it identifying a fast-growing Asian demand for higher-quality foods," Low says.

“We believe that Hancock identified an investment in Sirius as a logical, complementary extension of this strategy.”

Low, in a note, explains that significant tracts of farmland in Asia suffer low productivity due to salt-induced degradation.

For Sirius, and its polyhalite product, this is significant as studies have shown the fertiliser is particularly effective in such conditions. The Poly4 product can be effective in a ‘soil conditioning’ role – it can stabilise soils, reduce erosion and cultural eutrophication, Low says.

He added: “Polyhalite’s multi-nutrient and low-chloride make-up is of particular benefit to high-value chloride-sensitive fruit and vegetable crops for which there is growing demand from increasingly wealthy Asian populations.”

The analyst describes the deal as a ‘resounding endorsement’ of Sirius and the North Yorkshire polyhalite project, where the now reduced Phase 1 funding requirement will be the last major piece of the jigsaw.

“We continue to anticipate the conclusion of Stage 1 financing during the autumn of 2016,” Low added.

“If all goes to plan, there would be no further need to raise equity thereafter, dilution would cease to be a concern, and we believe the resulting improved clarity on potential equity returns could trigger a significant re-rating.

“While Sirius is currently at development stage and still some years from becoming a cash flow-generating company, an investment in Sirius will become progressively de-risked and should enjoy significant value uplift as it advances towards production, we believe.”

Low rates Sirius Minerals as a ‘buy’."

Marmalades  :-)

https://www.youtube.com/watch?v=ZOm0BruEVT0

Do your own washing....

GRrrr wee storks? :-)

Global Granny day? nope tis International Black Cat day .... Miooowww

Mittens.

"It has certainly been a long journey for fans of the would-be Yorkshire Potash miner Sirius Minerals. As most of us are aware, it is usually the case that for mining companies the key is less about the digging, and more about the funding. This is of course, whether or not there is actually anything under the ground.

But at least it would appear that things are starting to take shape in a reasonably positive way. Indeed, this comment could be regarded as something of an understatement given the announcement of the intervention of one of the world’s richest women. Gina Rinehart’s Hancock Prospecting is set to back the Sirius Project, now valued at up to $4bn, to the tune of $300m."

https://masterinvestor.co.uk/trading/sirius-minerals-sxx-technicals-targ...

Oooh ...  a Hancocks half hour ?

Nope I don't knit either ...

Captain Black's picture

SXX: Tycoons

http://www.mining.com/aussie-iron-ore-magnate-rinehart-invests-in-uks-bi...
 
"Sirius Minerals’ York mine is expected to be one of the world’s largest in terms of the amount of resources extracted, generating an initial 10 million tonnes of polyhalite per year...
 
"Australia's wealthiest woman and mining tycoon, Gina Rinehart, is diversifying into potash, an industry severely affected by a global oversupply that has caused prices to tumble in the past year, leading to layoffs and mine closures across the sector.
Her company Hancock Prospecting announced last week it was investing £245 million (about US$298m) in Sirius Minerals’ (LON:SXX) project on the edge of the North York Moors national park, the UK’s biggest potash mine.
 
"Under the deal, Rinehart will buy $50m of Sirius shares and pay $250m for a 5% royalty stream on the first 13 million tonnes of fertilizer produced by the mine every year. She’ll also pay 5% for the right to purchase up to 20,000 tonnes of product each year for use on her expanding Australian agricultural holdings.
 
Sirius’ York mine, expected to be one of the world’s largest in terms of the amount of resources extracted, will generate an initial 10 million tonnes per year of polyhalite – a form of potash that is used in plant fertilizers –, before it enters a second phase that will double that production to 20 million tonnes a year.
 
In terms of jobs, the operation will create about 1,800 vacancies during construction and 1,000 permanent positions once opened.
 
Sirius had originally expected to begin production in late 2016, with initial output of 5 million tonnes per year, and had signed a few future supply agreements. The current development schedule, however, points at 2018 as the most likely time for production to begin.
 
Meanwhile, potash prices continue to tumble. They began their decline four years ago, as weak crop prices and currencies weakness pinched demand. Potash has also suffered from increased competition following the breakup in 2013 of a Russian-Belarusian marketing cartel that previously helped limit supply."
http://www.potashcorp.com/customers/markets/market_data/prices/
 
Erm,  is that not the point ... a secure supply at a reasonable price. ... £98 FOB £37 Opex and a wee bite of the Capex...
 
Oh. http://www.bbc.co.uk/news/business-37831714
;-? https://www.youtube.com/watch?v=MvJwqr4aiuQ
 
http://www.reuters.com/article/us-thailand-king-idUSKBN12V0S5
 
Rabbits ... ;-)
https://www.youtube.com/watch?v=vlGRZHpuEyw
 
https://www.youtube.com/watch?v=x0UOWIQQNSc

Benefitz Betty's picture

China - Mine Rescue

http://www.bbc.co.uk/news/world-asia-china-37831764

"Thirteen people were killed and another 20 remain unaccounted for after an explosion in a coal mine in China, according to state media.

The gas explosion happened on Monday morning at a privately owned mine Jinshangou in the southwestern Chongqing region, Xinhua reported.

Attempts are continuing to reach the 20 miners, who are believed to still be trapped, the news agency said.

Mine accidents are common in China, despite efforts to improve safety.

In January, four miners were rescued from a collapsed gypsum mine in Shandong province after 36 days trapped underground. The mine's owner killed himself shortly after the accident....

""We are still working all-out to search for the 20 missing miners, and will exert our utmost as long as there's still a ray of hope," Chongqing Deputy Mayor Ma Huaping said of the Jinshangou explosion.

Two men are reported to have escaped unharmed.

Local authorities have ordered an investigation into the incident and ordered smaller coal mines in the region to close temporarily.

China is the world's largest producer and consumer of coal. The Jinshangou mine is licensed to produce 60,000 tonnes of coal a year, local media said."

Captain Black's picture

S'Wallows ...

Gina Wins:

http://www.bbc.co.uk/news/business-38259033

"Australia has given approval for the sale of the country's largest private landholding, the Kidman estate.

It will go to Australia's richest woman, Gina Rinehart, and her business partner, Chinese developer Shanghai CRED.

The largest Kidman station, Anna Creek, will be sold to a local farming family.

The sale of the estate, encompassing about 1.3% of Australian land, had been halted several times due to concerns about foreign interests.

Kidman estate said in a statement that "all Australian regulatory approvals for the sale have now been met, 99% of Kidman shareholders have accepted the offer, and the announcement means the sale can now progress to its conclusion".

The Anna Creek cattle station - the largest one in the Kidman group - is not part of the Rinehart deal. That farm, together with its outstation The Peake, will be acquired by the Williams family who own properties that adjoin Anna Creek.

With the sale of Anna Creek and The Peake, Kidman's Australian ownership increases from 66.1% to 74.7%....

"Australia welcomes foreign investment where it is consistent with our national interests."

Some of the farms are close to a government weapons-testing range at Woomera, sparking concerns about Kidman falling into foreign hands.

The landholding has 10 cattle ranches, a bull breeding stud and a feed lot covering 101,411 sq km (39,155 sq miles) in four states.

The separate sale of Anna Creek and The Peake means Ms Rinehart and her partners will own 77,000 sq km of the estate."

https://www.youtube.com/watch?v=BgZ4ammawyI

 

Translated by some starling ....

 

""Can anyone find a link between Gina Rineharts`s Shanghai partner and central or provincial government in China"
-----
"As the largest real estate group in China - China Real Estate Development Group, a member of the Commonwealth, the Shanghai Real Estate Co., Ltd. in September 1999 by the Shanghai municipal government approved the establishment of the law. The company has a national Ministry of Construction that a real estate development qualification, by the People's Bank of China for the 3A credit rating. The current Shanghai Real Estate Co., Ltd. General Manager Gui Guojie.
With a registered capital of RMB 600 million and a total asset size of RMB 4 billion, the Group has abundant land reserves and has extensive contacts and good reputation in the real estate industry in Shanghai. The company has a long history and strong business relationship with Shanghai. Of the joint-stock companies.
Since the founding of the company, follow the "endless, has a long history" of the enterprise purpose and "Shou-based, change for the soul, the expansion of degrees, the management of the Festival" corporate philosophy, the main operators to broad mind, Pragmatic spirit, creating a baptism through the market and the team continued to struggle. 2003, 2004, the company for two consecutive years was named the top 50 real estate enterprises in Shanghai, were ranked No. 25, No. 20. 2005 by the Shanghai real estate sales ranked sixth, sales area of ​​the first two. 2003,2004 for two consecutive years was awarded the Shanghai Municipal Key Projects of meritorious deeds of the honorary title of outstanding companies. 2003, 2004, 2005 for three consecutive years was rated enterprise-class AAA credit unit. 2005 won the title of China 's real estate enterprises integrity. In 2006, it was appraised as the outstanding contribution enterprise of Shanghai real estate in 18 years, the top 80 real estate development enterprise in the Yangtze River Delta region, and the most competitive enterprise in Asian real estate industry. In 2006 won the Shanghai municipal major projects meritorious service competition outstanding company title, won the relocation of the relocation of the construction of outstanding base company title."

http://www.shzfzy.com/Introduce/Default.aspx

Forgive me if I presume your Mandarin is not quite up to scratch so, you'll have to exercise your own google translate skills if you want any more I'm afraid, popex. Otherwise we could be here all day!

Regards and good luck,"