Sirius Minerals Plc announces acquisition of York Potash Ltd

Sirius Minerals Plc announced Monday 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 Ltd is a private UK company that has signed various agreements with major landowners in relation to extensive mineral rights covering more than the 600km2 onshore and offshore between the towns of Whitby and Scarborough in North Yorkshire, England, where York Potash Ltd has been analyzing the potential to develop a new world-class 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 have been allotted 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), said the firm.

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 analyzed over 97,000 meters of drilling data and a significant amount of historical reports relating to the region’s geology.

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 mineralization.

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.

17 Jan 2011.