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Sirius Minerals has set out plans to raise $3.8bn (£2.9bn) to fund the development of its potash mine in Whitby and connected processing plant in Teesside.

The stage 2 financing for the project includes underwritten firm placing and placing and open offer to raise gross proceeds of about $400m (£310m) and a revolving credit facility with a maximum commitment of $2.5bn (£1.9bn).

It also includes an offering of guaranteed convertible bonds with an aggregate principal amount of approximately $644m (£498m), of which up to $244m will be used to purchase an equivalent amount of the company’s existing 8.5 per cent guaranteed convertible bonds due 2023, and senior secured guaranteed bonds of $500m.

Sirius Minerals revealed in March 2019 that it had paused discussions with prospective lenders to work on an alternative financing proposal with JP Morgan Cazenove.

This followed an announcement in September 2018 that additional funding was required for the project after a revised estimate of its original $3bn capital cost.

Chris Fraser, managing director and chief executive of Sirius Minerals, said:

“Today we are pleased to announce that, as a result of that work, 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.

“The funding package will bring together equity, convertible bonds, high yield debt, and a $2.5bn revolving credit facility in a multi-stage, flexible structure that balances the availability of capital with the needs of the project.

“Today’s announcement provides a clear pathway to a fully financed project in the months ahead, while enabling us to progress construction at full speed.”

Sirius Minerals is currently undertaking construction of mining facilities at the Woodsmith Mine, Lockwood Beck and Wilton sites.