The board of Sirius Minerals is set to recommend a £386 million offer for the company which would leave many investors out of pocket. The company, which is trying to build a fertiliser mine in North Yorkshire, said it is in late-stage talks with Anglo American over the 5.5p a share offer.

The bid has not yet been finalised but would be ahead of Sirius's closing share price at 4.1p on Tuesday. Shares shot up by 33% to 5.4p on the news of the offer on Wednesday.

However it still marks a steep climb-down from a year ago, when the price per share for Sirius Minerals was 22p.

"Anglo American identified the project as being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating-cost profile and the nature and quality of its product," Anglo said.

It comes after a tough few months for the miner's investors. The business has attracted many retail shareholders, individuals who invest their own money. A £100 stake in Sirius in January was worth £18.60 at close on Tuesday.

Sirius was forced to go back to the drawing board in September when it failed to raise enough money to unlock the bank loans it needed to push ahead with its fertiliser project.

The business hoped that a bond sale would allow it to borrow up to 2.5 billion dollars (£1.9 billion) from banks.

It was forced to slow down work on the mine in North Yorkshire after the announcement, and later came back to the market with a slimmed-down plan for how to progress.

The mine would extract polyhalite, a mineral that can be used as fertiliser, which is buried around a mile underground in the North Yorkshire moors. Using a conveyor belt, the mineral would be transported through a 23-mile (37km) long tunnel to Teesside, from where it would be shipped to customers.

Published: by Radio NewsHub
Start your relationship

If you are interested in receiving bulletins from Radio News Hub or would simply like to find out more please fill in the form below. We operate on annual contracts - spread the cost is available.

We aim to get back to you within 48 hours