GCISalt Lake Potash made ‘significant progress’ in 4Q20 quarter
(SO4 ) has reported trading for the three months ending 31 December 2020, describing the period as one of “significant progress” as the group's Lake Way Project in Western Australia nears completion.
The mineral exploration company is currently focused on transitioning from developer to producer at the Lake Way Sulphate of Potash (SOP) Project located in Wiluna, Australia.
By 31 December 2020, SO4 recorded the Process Plant as 88% complete on an earned value basis with site concrete work, including additional NPI and bagging infrastructure, 94% complete, structural steel 80% complete and tanks/vessels 81% complete.
Process plant commissioning is expected to commence this month with introduction of first feed salts to the plant in March. The project capital budget remains unchanged at A$264m.
In late December 2020, the company revealed that it had satisfied all remaining conditions precedents under the Syndicated Facility Agreement (SFA) to achieve financial close and has received debt funds from the first drawdown of $105 million.
Investors will recall SO4 executed the $138m Syndicated Facility Agreement with Taurus Mining Finance Fund No.2 L.P and the Clean Energy Finance Corporation in August 2020.
"Significant progress was made in the December quarter in financing, operations and construction as well as at the corporate level with the strengthening of our board. We look forward to commissioning the plant in the March 2021 quarter, shortly followed by premium quality sop sales to the domestic and global markets,” said CEO, Tony Swiericzuk.
Harvesting of potassium rich kainite and schoenite salts from Train 1 was undertaken with around 27kt of salts now stockpiled ahead of plant commissioning. Assays from the harvest salt stockpiles have returned grades in-line with the system curve and planning models.
In December 2020, SO4 received the Community Contribution Award at the 2020 Association of Mining and Exploration Company annual awards which recognised its efforts to deliver sustainable and long-lasting social and economic benefits to the Wiluna region.
In addition to the OF&G approval received this month, SO4 said it is also seeking Organic Certification from several other domestic and international bodies, including EU Ecological Certification, the Organic Materials Review Institute, the ACO and UK Soil Association.
Earlier this month, the Organic Farmers & Growers association in the UK (OF&G) approved the Lake Way potassium sulphate (SOP) product for use in organic farming in the UK.
No stand-out ‘new’ news in this reassuring quarterly report with investors obviously looking forward to production and first sop sales in March 2021. With further financing of A$52m secured in December 2020, shares in Salt Lake Potash have increased by over 15% since the beginning of the month to open 0.95% higher this morning at 26.5p.
Reasons to Follow SO4
Dual-listed Salt Lake Potash operates as a mineral exploration company in Australia and the company plans to build the most sustainable, most rewarding fertiliser project in the world.
The Lake Way Project remains on schedule for first SOP production in March 2021 and first SOP sales in April 2021. The project capital budget remains unchanged at A$264m and the overall project is now 81% complete on a value earned basis as at 31 December 2020.
CEO of SO4, Tony Swiericzuk described achieving financial close on the debt facility as “a substantial milestone in the development of the company and the Lake Way Project.”
Western Australian farming publication, Farm Weekly, said potassium-rich brine processors, SO4 and the other WA companies will be among the world's lowest cost SoP producers.
It outlined that the company’s cash production cost per tonne is expected to be US$205 at an annual production rate from the end of next year of 245,000 tonnes per annum (tpa).
There is no current SOP local production in Australia, and so SOP projects like Lake Way will enable the country to transition from a net importer of potassium fertilisers to an exporter.
Yesterday, the mineral explorer successfully completed its share purchase plan (“SPP”) after the group increased the offer size to A$8.0m following strong demand from retail investors.
Swiericzuk stated that, “The funds raised through the placement and SPP have enabled the Company to achieve financial close on the US$138m Taurus/CEFC debt facility and draw the initial tranche of US$105m and to finalise development of the Lake Way Project."
In a recent Q&A video with Vox Markets, Salt Lake Potash’s Chief Executive Officer, Tony Swiericzuk, discusses with us the positive progress at their developing Lake Way Project
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