SIRIUS MINERALS PLC - ADRs (bundles of 500 shares) (SRUXY)

[Thunderbolt]

Acquisition of York Potash Ltd and CEO appointment

http://www.siriusminerals.com/acquisition-of-york-potash-ltd-and-ceo-appointment/

For immediate release: 17 JANUARY 2011

Sirius Minerals Plc

(“Sirius” or the “Company”)

Acquisition of York Potash Ltd and CEO appointment

The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY), the globally diversified potash development group, are pleased to announce:

* the acquisition of York Potash Ltd; and
* the appointment of York Potash’s founder, Chris Fraser, as Managing Director and Chief Executive Officer of Sirius.

YORK POTASH ACQUISITION

Key facts

* Various agreements in relation to mineral rights both onshore and offshore over approximately 600km2 between the towns of Whitby and Scarborough in England, UK;
* Situated in a known high grade potash region with existing operations on an adjacent property;
* Extensive historical data from previous potash and petroleum exploration in existence;
* Established as one of the world’s largest deposits of polyhalite at mineable depths;

* JORC Exploration Target1 of between 3.3 and 6.0 Billion tonnes of 67% to 94% polyhalite (19% to 27% K2SO4); and
* JORC Exploration Target1 of between 330 and 400 Million tonnes of 35% to 40% of potassium chloride (KCl).

1. See note A. These estimates of quantity and grade are conceptual in nature and there has been insufficient exploration to define a Mineral Resource on the property and it is uncertain if further exploration will result in discovery of a Mineral Resource on the Property reported to an AIM standard.

Sirius has acquired York Potash Ltd, a private UK company that has signed various agreements with major landowners in relation to extensive mineral rights covering more than 600km2 onshore and offshore between the towns of Whitby and Scarborough in North Yorkshire, England, where York Potash Ltd has been analysing the potential to develop a new world-class potash project (the “York Potash Project”). The mineral rights relate to all the evaporites including potash (sylvite), polyhalite, rock salt, and intermingled minerals beneath the agreement areas. The region also hosts the Boulby Mine which has been producing potash since 1973 and is known to host extensive deposits of high grade sylvite and polyhalite.

As consideration, 150 million new Ordinary Shares of 0.25p each in the Company (“New Ordinary Shares”) have been allotted (conditional on Admission to trading on AIM (“Admission”)) to the shareholders of York Potash Ltd in consideration for 100% of the issued share capital of York Potash Ltd which, at the closing price of 16.75 pence per share on 14 January 2011 this equates to £25.1 million (equating to total consideration of £25.3 million including the repayment of the loan set out below). Application will be made for the New Ordinary Shares, which will when issued rank pari passu with the existing Ordinary Shares in issue, to be admitted to trading on AIM; trading is expected to commence on 21 January 2011.

While the York Potash Project is still at the early stages of exploration and assessment, the Directors believe the potential of the project is significant. There has been an extensive amount of historical potash and petroleum exploration completed in the region since the 1960’s. York Potash has analysed over 97,000 metres of drilling data and a significant amount of historical reports relating to the region’s geology.

A JORC Exploration Target of between 3.3 and 6.0 Billion tonnes of 67% to 94% polyhalite (19% to 27% K2SO4)1 has been established for the currently contracted area within the York Potash Project. This estimate establishes the project as having one of the world’s largest deposits of polyhalite at mineable depths.

This estimate has been prepared based on a five (5) metre “extraction” section from a >10 metre very consistent seam of relatively high purity polyhalite. This is from within the basin wide 10 to 50 metre thick polyhalite sequence intersected by numerous historical drillholes. Allowances have been made for urban areas and known areas of major fault and dyke disturbance. The base of the polyhalite sequence is expected to be in the order of 1,600m to 1,700m depth below the surface.

In addition, a JORC Exploration Target of between 330 and 400 Million tonnes of 35% to 40% potassium chloride (KCl)1 has been established for the currently contracted area within the York Potash Project. This estimate has been defined on the basis of similar characteristics from the drillholes already drilled in the area and what has been mined at Boulby. Allowances have been made for urban areas and major faulting.

1. See Note A. These estimates of quantity and grade are conceptual in nature and there has been insufficient exploration to define a Mineral Resource on the property and it is uncertain if further exploration will result in discovery of a Mineral Resource on the property reportable to an AIM standard.

Polyhalite is a potentially valuable source of Sulphate of Potash (“SOP”) or potassium sulphate which has the chemical symbol of K2SO4. SOP is a highly sought after premium potash product which trades at a significant premium to conventional “potash”, being potassium chloride (KCl) or Muriate of Potash (“MOP”) products. Importantly, SOP does not contain chlorine which limits certain applications of MOP as a fertiliser.

The Company is now working with its advisers to rapidly progress the York Potash Project through the various stages of project studies needed to determine the technical, social and economic viability of the project. In addition Sirius intends to continue to secure mineral rights in the project area to provide the maximum exploration flexibility within the known extent of potash mineralisation.

The York Potash Project is near road and rail networks that potentially give the project access to the port of Teeside, which lies to the north, and the port of Immingham, which lies to the south. Part of the project analysis will be to assess how best to access the existing infrastructure to efficiently access both domestic and international potash markets.

Founded in 2010, York Potash Ltd has yet to submit formal accounts. According to the latest management accounts of York Potash Ltd, as at 11 January 2011 York Potash Ltd had Net Liabilities of approximately £144,000 and had incurred an operating loss of approximately £362,000 for the period to 11 January 2011. The liabilities of York Potash Ltd included a loan of £176,385 from an entity related to Chris Fraser which is to be repaid as part of the acquisition.

Following the issue of the New Ordinary Shares as set out above, the total number of shares in issue will be 878,106,602. Therefore the total number of Ordinary Shares in the Company with voting rights will be 878,106,602.

The above figure of 878,106,602 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Service Authority’s Disclosure and Transparency Rules.

APPOINTMENT OF MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

As part of the acquisition of York Potash Ltd, its founder, Chris Fraser, has been appointed Managing Director and Chief Executive Officer of Sirius Minerals Plc.

Christopher Neil Fraser (36) has approximately 16 years finance experience in the mining industry. During this time he worked at Citigroup (2000-2009), Rothschild (1998-2000), and KPMG (1995-1998) and has market leading expertise in all aspects of the financing and development of major mining projects. Having joined Citigroup in 2000, he was appointed Head of Metals and Mining Investment Banking for Australia in 2006 and Managing Director in 2008. In these roles he led the bank to become one of the leading investment banking franchises in the mining industry in Australia. In particular he was the lead adviser on the US$2.5 billion initial development capital financing for Fortescue Metals Group (FMG). He has provided strategic advice to many of the world’s leading mining companies including BHP Billiton, Rio Tinto, WMC Resources, and Paladin Energy.

In 2009 Chris Fraser founded Sigiriya Capital, a specialist advisory and investment house focused on the resources sector, and in 2010 founded York Potash Ltd to undertake the exploration and development of the York Potash Project.

Chris Fraser holds a Bachelor of Commerce degree from the University of Western Australia. He is a qualified Chartered Accountant and a member of the Institute of Chartered Accountants in Australia. In addition, he is a Senior Associate of the Financial Services Institute of Australia (FINSIA) and member of the Institute of Company Directors in Australia.

Directorships currently held or previously held in the last five years by Chris Fraser are as follows:

Current Former

Sigiriya Capital Pty Limited Iberian Resources Corp

York Potash Ltd

C&J Fraser Investments Pty Ltd

Panocean (China) Limited

Recursos Sigiriya Pty Limited

Li Jin Capital Pte Ltd

As a result of the York Potash acquisition, Mr Fraser now has a beneficial interest in 112,500,750 New Ordinary Shares of 0.25 pence in the Company. This beneficial interest is held through C & J Fraser Investments Pty Limited as trustee of The Fraser Family Trust. This holding represents 12.8% of the Company’s enlarged share capital.

Chris Fraser has entered into a service agreement with Sirius under which he has been appointed as the Managing Director and Chief Executive Officer of the Company with immediate effect. The appointment will continue until terminated upon three months notice in the first 12 months and thereafter six months’ written notice by either party. In addition, in the event that there is an effective change of control of the Company or the Company merges with another company which is not a group company, from the date the Change of Control takes effect the written notice to be given by the Company to terminate this appointment shall change to become not less than 12 months’ notice in writing. Mr. Fraser will initially be paid a base salary at the rate of £260,000 per annum.

Mr Fraser has been granted the following options over Ordinary Shares in connection with his appointment:
Number Exercise Price Expiry Date
10,000,000 GBP0.197 31 December 2013



The options will vest immediately upon issue.

There is no further information on Chris Fraser required to be disclosed under Schedule Two, paragraph (g) (i)-(viii) of the AIM Rules for Companies.

Chris Catlow, Chairman of Sirius, commented:

“Today marks a key date in the history of building Sirius as the New Potash Powerhouse. Not only are we significantly expanding our portfolio of major potash projects, we are also significantly strengthening the management team with Chris Fraser’s appointment as Managing Director.

“The York Potash Project has the potential to make Sirius one of the world’s most important suppliers of potash. With the potential to produce several millions of tonnes annually of Sulphate of Potash, the premium potash product, the York Potash Project could generate significant value for all stakeholders. Furthermore, the acquisition is fully aligned with our strategy of acquiring major projects overlying known potash targets in politically stable environments. The platform we now have for stakeholder value creation is very impressive and, we believe, unmatched by our peers.

“I am also delighted that Chris has agreed to join Sirius as our Managing Director and CEO – this is a key value-add aspect of the acquisition. Chris has proven entrepreneurial abilities in the resources industry and has a clear track record in raising large amounts of capital for major strategic project developments – not least for Fortescue Metals. He has the vision, energy, skills and experience to deliver significant value for Sirius and lead the Company into the future.”

For further information, please visit the Company’s website www.siriusminerals.com or the York Potash Project’s website at www.yorkpotash.co.uk. Alternatively please contact:


Sirius Minerals Plc
Chris Fraser
(MD & CEO) Tel: [phone] or+61 404073288 Richard Poulden
(Deputy Chairman) Tel: [phone]

NOMAD Joint Brokers Media Enquiries
Beaumont Cornish Limited (Nomad) XCAP Securities Plc Daniel Stewart & Company Plc Gth Media Relations
Roland Cornish John Grant, Karen Kelly, David Newton Christopher Theis / Emma Earl Toby Hall/Christian Pickel
Tel: [phone] Tel: [phone] Tel: + 44 20 7776 6550 Tel: + 44 20 3103 3903



About Sirius Minerals Plc



Sirius Minerals is a globally diversified potash development company. Its primary focus is to bring on stream major potash mining facilities through the acquisition and development of projects overlying recognised potash deposits. Today it holds properties in the United Kingdom (Yorkshire), North America (North Dakota), and Australia (Queensland and Western Australia).

The Company is additionally progressing ongoing Research and Development initiatives into the secondary uses of salt and potash beds for energy storage and carbon dioxide sequestration.

Incorporated in 2003, Sirius Minerals’ shares are traded on the London Stock Exchange’s AIM market. Its shares are also traded in North America on the OTCQX through the use of a sponsored ADR facility. Further information on the Company can be found at www.siriusminerals.com.

NOTE A



Competent Person’s Statement and Risk Statement


The information in this Stock Exchange Announcement that relates to Mineral Exploration results and Exploration Targets, together with any related assessments and interpretations, have been verified by and approved for release by Dr Frederick W. Smith FIMMM., CEng, CSci., a qualified geologist and full-time employee of FWS Consultants Limited (“FWS”), Environmental and Geological Consultants. Dr Smith, who is a Fellow of the Institute of Materials, Minerals and Mining (IMMM), has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person for the purposes of the AIM Rules. Dr Smith and FWS consent to the inclusion of the information contained in this announcement and the respective references to them in the form and context in which they appear. The JORC Exploration Target estimates of quantity and grade are conceptual in nature and there has been insufficient exploration to define a Mineral Resource on the property and it is uncertain if further exploration will result in discovery of a Mineral Resource on the Property. The estimates are not a Reserve or Resource statement in accordance with an AIM recognised Standard and should not therefore be relied upon as such. It should be noted that the Pan European Code of Reporting or PERC (that IMMM co-wrote) released in December 2008 and JORC are essentially identical on all key aspects relating to compilation and quoting Exploration Targets.