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Sirius Minerals has shelved a $500m fundraiser, casting a shadow over plans to construct a giant fertiliser mine in North Yorkshire.

Shares in the mining firm plummeted in early trading, shedding more than half of its value, after it said it would be scaling back production at the site near Whitby and launching a strategic review.

The company said it believes its major bond offering cannot go ahead “in current market conditions” and will launch the “comprehensive” review over the next six months to assess different ways to secure the necessary funding for the project.

Sirius, behind the multi-billion pound fertiliser mine and Teesside processing plant had until the end of the month to sell £410m in bonds , which would unlock the further £2bn needed to take the project over the finish line.

In an announcement, it said: "The company has today announced that, as a result of global market conditions, the ongoing uncertainty surrounding Brexit and the political environment in the United Kingdom, the Company and its advisors believe that a senior secured notes offering in compliance with the terms of the revolving credit facility commitment letter provided by JP Morgan Chase Bank N.A., London Branch is now unlikely to be achievable.

"The company has therefore today announced that the scope of construction activities on the project will now be adjusted while the company undertakes a strategic review of its options.

"The board considers that a reduced pace of development focused on key areas of the project that will ultimately serve to preserve the most value for the project will provide the company with a period of up to six months to review all available options for the company to move forward.

"The group will need to secure additional external financing in order to allow it to continue operations after 31 March 2020."

(Image: Gazette)

Last month Teesside MPs called on the Government to underwrite some of the financing for the project, which is expected to create 2,000 jobs at peak production.

Sirius says it has enough cash to keep tunnelling the mine at its current speed and remain "on time and on budget" until the end of the quarter.

Many of the mine's thousands of shareholders have lost out as the Sirius share price has tumbled in recent months.