What the company does
The Perth-based company has now secured debt and equity finance for the development of the project with the aim to develop a 245,000 tonnes per year sulphate of potash operation.
EBITDA is likely to be A$111mln per year and Lake Way would have one of the lowest operating costs for global SOP producers.
How it’s doing
On-lake and off-lake operations progressing on schedule while the company has also delivered the funding package for the project which includes two components:
- A US$138 million (A$203 million) Syndicated Facility Agreement (SFA) with Taurus Mining Finance Fund No2 LP and the Clean Energy Finance Corporation (CEFC); and
- A fully underwritten A$98.5 million placement and accelerated non-renounceable entitlement offer (ANREO) at 50 cents per share completed in September 2020.
In combination, these funds will enable the company to complete the funding and deliver the project on schedule, with first SOP production expected in the March quarter of 2021.
The development of on-lake infrastructure continues to progress, with work having started on the fourth pond train and 62 kilometres of trenches now completed.
The Stage 1 and 2 pond networks (Trains 1, 2 and 3) both continued to operate at steady state during the September quarter.
During the quarter, paleochannel exploration drilling continued, with brine abstraction bores drilled into the paleochannel basal sand at pads 12, 14 and 23.
Notably, brine grade in the weathered basement aquifer at pad 30 located outside the paleochannel and outside the currently defined mineral resource was 5,170 mg/L potassium.
This presents an additional source of brine that was not incorporated in the resource estimate and not incorporated in the production plan underpinning the ore reserve.
The results from the paleochannel exploration drilling campaign continue to validate and indicate potential upside to SO4’s BFS brine production model in terms of the location, continuity and depth of the paleochannel basal sands and brine grades.
Progress at the process plant and non-process infrastructure site accelerated during the September quarter.
Concrete installation to all wet areas of the process plant including the dryer foundations was completed, with installed concrete 97% complete at quarter-end.
It is anticipated that the remaining primary concrete will be completed during October, enabling the contractor to complete concreting for product handling and storage infrastructure and the power station slab and footings.
The bulk of the underground trenched services are now more than 50% complete including process plant and utilities area, workshop, laboratories and administration buildings.
SO4 continued the advancement of the remaining permitting required to support full-scale operations with ongoing liaison around the Environmental Review Document (ERD) submitted.
The EPA has determined that the full project scope requires formal assessment with no public review. Board members of the EPA visited the site during the quarter and the company received advice from EPA services.
A revised ERD in response to these comments was submitted with surveys, studies and management plans updated.
Elsewhere, Salt Lake Potash has a number of potential development projects within its portfolio, including Lake Wells, Lake Marmion, Lake Ballard and Lake Irwin.
Chief executive officer Tony Swiericzuk said: “These projects all potentially possess characteristics that would make for an attractive development – principally the ability to fast-track production at a low level of capital intensity.