Specifically, Sirius has agreed to an amendment to an agreement with Hancock British Holdings Ltd, originally made in 2016.
It essentially sees the company sell a 5% share of future revenues from its Yorkshire fertiliser mine for US$250mln, and, also a 4% equity stake (about 200mln shares) in Sirius Minerals will be sold to Hancock for an additional US$50mln once the Stage 2 financing commitments have been secured by Sirius.
Hancock will make the US$250mln payment to Sirius before September 19.
"The drawdown of the Hancock Royalty is another important milestone as we develop into a leading fertilizer business,” said Chris Fraser, Sirius chief executive.
“We are delighted to have an experienced partner in the mining industry aligned to Sirius and one that has a growing, long-term agricultural interest. The long-term nature of the royalty investment is well aligned to the underlying characteristics of this world-class, long-life asset."
Hancock will be allowed to observe board meetings upon exercise of the royalty component and will be entitled to board representation, with one nominated board appointment, when the equity component of the deal is exercised.
The 5% royalty is applicable to the first 13mln tonnes of production from the company’s mine, and, it will reduce to 1% thereafter.