JP Morgan has backed a $3.8bn (£2.9bn) Sirius Minerals financing package as the miner looks to complete a fertiliser project in North Yorkshire.
The US bank has underwritten a $400m share placing launched this morning and will provide a $2.5bn revolving credit facility, Sirius Minerals revealed today.
The giant polyhalite mine under the North York Moors had been expected to cost $3bn but the company revised that to up to $3.6bn last year as construction costs rose.
As today’s announcement revealed further costs, shares in the company fell 15 per cent in early trading.
Sirius also hoped to raise $400m from the sale of convertible bonds and $500m of debt.
Chief executive Chris Fraser said there was now a “clear pathway to a fully financed project” enabling construction to progress at full speed.
The equity will be raised through a placing with existing shareholders, who include Australian mining magnate Gina Rinehart and major City institutions.
Sirius has estimated that the site holds sufficient potash – used in the production of fertiliser – for a century of mining and could support more than 1,000 jobs.
“Today we are pleased to announce that we are launching a comprehensive markets-led solution for our funding requirements which will enable Sirius Minerals to complete the development of its mine and unlock what we believe to be the world's largest known high-grade polyhalite deposit,” Fraser said.
“The funding package will bring together equity, convertible bonds, high yield debt, and a US$2.5bn revolving credit facility in a multi-stage, flexible structure that balances the availability of capital with the needs of the project.”