"Chris Fraser, Sirius CEO said: “The half year has been marked by excellent progress on the development of Woodsmith Mine.
“We eagerly anticipate the commencement of shaft sinking activities.
“Good progress has also been made at Lockwood Beck, the intermediate site for the mineral transport system.”
Interest in future supplies of the project’s Polyhalite product “remains strong,” he added."
"...On the development side, since the beginning of the period, a substantial of that design work has been conducted under an early contractor involvement contract with IMC, and that has put us in a good place in the overall development program. In addition to that design engineering work, a number of long-laid items have been procured, the most significant of those being the orders for the permanent shop winding equipment that is require for the start of the mine in synch in 2018."
Blind Spots? via GK 'The Legend'
""Yuen Low :
Are you able to shed any light on the finding[s] of drilling to-date in relation to the [Sherwood sandstone you're undertaking] - are there any indications that you can use the [lining] regime [you indicated] or will there be any change[s]?
Tom Staley :
So we have taken cores out of the sandstone that have demonstrated that there are some [fissures] in the sandstone as we expected. We’re actually pleased to come across some [fissures], because it actually gives [us] a benchmark against what we are expecting to find in terms of the types of [grouts] that we might use and the volumes of [grouts] that will be required, because as you know that [grouting} is certainly part of our construction [regime], we’re pleased to report that [those fissures] are both quite tight and consistent with what our expectations have been. In addition to that we also will run a number of [packer] tests which will provide us with more information and understanding as to how those [fissures] will [behave] through that [grouting] process. So everything we’re [doing] to-date is consistent with all of the [assumptions] that have gone into our initial lining design and now we are using [that] information [to further] refine the work that [has] been done."
These grouting methods to seal against high pressure saline aquifer (aquifer that has not in any way been connected to any sea for at least 150m years) are tried, tested and reliable technologies used in many locations and over many years."
"The Company has deployed £121m during the six-month period ended 30 June 2017 for Project development of which £48.3m was capital expenditure."
"We are continuing detailed dialogue with commercial partners around the world, as interest in future supplies of our POLY4 product remains strong. These discussions are supported by ever-present and expanding research and development work, which will support customers and farmers in the years to come. We also continue to add the skills we need to our team to progress our work quickly, safely and efficiently."
"The Company's shaft sinking contractor, AMC, have continued with detailed design of the shafts including associated surface facilities such as the production and service shaft winder buildings. Diaphragm walling ("D-walling") preparation activities have commenced including the mobilisation of the rigs and planning for the support infrastructure such as the concrete batch plant, welfare facilities, workshops and offices.
The winding equipment required for main shaft sinking activities has been ordered and delivery is expected in the new year in time for the main sink to commence."
"The Company has continued to expand its sales and marketing team with regional leads, who are now established in their individual markets, in North America, South America, South-East Asia and Europe. Commercial discussions are continuing in these key regions regarding sales of the Company's POLY4 product, as well as in key growth markets such as Africa. Each of these opportunities represent material volume prospects in key markets for Sirius."
"Since the half year end the Group formally awarded the shaft sinking scope of work to Associated Mining Construction UK Ltd ("AMC"). The scope encompasses approximately three quarters of the mine site development ("MSD") line item outlined in the stage 1 financing plan. The remainder of the MSD line item relates to site preparation work, provision of utilities to site and shaft bottom development.
The target price of AMC's scope is consistent with the allocated project budget and the target date for reaching both first polyhalite and practical completion is within the dates outlined in the project schedule.
"The commercial arrangement with AMC is one of risk sharing with financial incentives for completing the scope of work under budget and ahead of schedule, and there are also financial penalties should completion be late or above the target price. The cost of this work is expected to be incurred in a combination of currencies with approximately 55% in GBP, 30% in EUR and 15% in CAD. The Group is in the process of appropriately mitigating foreign exchange exposures relating to the EUR and CAD costs."
D : In many nations, given the importance of food security for them, policy decisions on fertilizer use could make significant differences to import levels. Similarly, governmental support in key export markets is of significant assistance in establishing long-term trade deals for our product.
M : The Company seeks to build positive relationships with foreign governments where there is significant state interest in the fertilizer sector. The Company will continue to work closely with the UK Department for Trade to assist with this process where appropriate.
D : The majority of current and future customers have business lines in agriculture beyond just fertilizer - changes to any of these can have an impact on fertilizer business units.
M : The Company continues to expand its portfolio of customers both in terms of size and geographically to leverage the risk.
D : The process of registering the product varies in complexity from country to country and region to region. There is no guarantee that these registrations will be forthcoming.
M : The Company has begun the process of registering its product in various regions where current customer agreements are in place. It has also begun the early registration process to have its product validated and ultimately registered in markets such as India, where time associated to trial work is part of the process
D : The Project may experience construction and schedule delays due to unforeseen technical issues.
M : Detailed planning will be carried out continuously by the management and external consultants as part of the Project's continued development to mitigate and de-risk the Project during construction. The Company also continues to pursue all acceleration options available to reduce the time required to reach first production. Contractors are incentivised to bring their scopes forward.
D : Our business depends on attracting and retaining skilled employees and contractors. A loss of skilled employees and/or a breakdown in relations and communication could result in disruptions to operations.
M : The Company continues to support its employees and contractors ensuring safe working environment and encouraging a positive work-life balance. Regular communication is maintained and all employees and contractors are updated on the Project's progress and news through weekly meetings, in-house newsletters, and senior management team emails.
D : The performance of our contractors and suppliers is critical to the success of the project. Performance issues or a lack of alignment could introduce cost and schedule risks to the Project.
M : An active and experienced management team is in place with a focus on being clear about expectations, verifying performance, and doing everything possible within the contracts to ensure the success of our contractors and suppliers. In working with the contractors, the Company is focused on ensuring that contractors are operating within their area of specialisation, that their senior management are engaged in the Project, that regular communication and progress updates are maintained, and that major construction contractors are incentivised around the success of the Project. This risk would manifest itself in cost, delay or quality issues.
D : The Project may experience construction cost overruns due to unforeseen technical issues or scope change.
M : The Company has a strong focus on cost, and the prices received from contractors and suppliers so far have been in line with the DFS. In addition, the Project was costed with a significant contingency and escalation provisions in case of cost pressures. The fall in the value of the pound also provides comfort in this area. As further detailed engineering is carried out and contracts are awarded this risk decreases.
D: A significant safety or environmental incident would affect the delivery of the Project and the Company's reputation.
M : The Company is set up to manage these items effectively, and the Company will continue to support its teams in providing a safe work environment. Ongoing focus areas include leadership activities, work with contractors, developing the culture of the project team, and the control of major hazards. The Company continuously assesses the risk and ensures that the right people are in the right place. Nonetheless, the Company is not complacent about the risks in this area."