Shares in sirius minerals

Shares in sirius minerals

By: Demdxx Date of post: 29.05.2017

SXX have lept higher during the past few months. The big question is, can these gains continue or will Sirius fall back to earth in the second half? To assess whether or not Sirius' gains will evaporate, we need to establish what caused the company to rally in the first place.

Sirius Minerals Share Price | SXX Stock News | Interactive Investor

It seems the rally has mainly been driven by management's decision to uplist Sirius' shares to the main market from AIM. This decision means that a wider universe of investors is now able to access Sirius' shares, including fund managers who may have been prohibited from holding the stock in the past due to its AIM listing.

Sirius was officially admitted to the main market on Friday 28 April and qualifies for inclusion in the FTSE index, which will attract further buying mainly by tracker funds that have to hold all of the index's constituents. But market dynamics are not the only catalyst driving shares in Sirius higher.

The firm is also making impressive progress on its flagship North Yorkshire potash project and investors are starting to see the light at the end of the tunnel for the company's growth phase. Significant roadwork is already in progress around the development site in preparation for the first phase of construction which is expected to begin in the second half of When this phase of construction gets under way, I believe investors will rush to buy into Sirius' growth story.

SXX Sirius Minerals share price - UK Share Prices at Live Charts.

All early-stage mining companies have the same problems; it's difficult to get funding, projects usually overrun on time and budget, and more often than not companies collapse before they have a chance to begin production.

Sirius is still not immune from these risks, but when the diggers start to build its Yorkshire mine, the company will be one step closer to being a fully functional miner rather than a start-up.

shares in sirius minerals

As construction of the mine progresses, and full production gets closer, it is likely investors will begin to place a higher value on the company's shares. I have written before that when production starts, shares in the company could be worth as much as p , so investors all over the country will want to get in on the action.

Sirius Minerals Share Price | SXX Stock News | Interactive Investor

However, until the company can prove that it's not yet another mining basket case, investor caution is understandable. Overall Sirius' recent gains have been driven by market dynamics, but as the company continues to develop its flagship potash project, more and more investors should flock to its offering which will likely drive further share price appreciation.

Rupert Hargreaves has no position in any shares mentioned.

shares in sirius minerals

The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro.

Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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