Salt Lake Potash prepares for first SOP sales in June
(SO4 ) has released a quarterly report stating that it has made “significant progress” at the Lake Way Project, setting it up for the first SOP sales in the June quarter.
The Lake Way Project in Western Australia, which remains the company’s primary focus to date, forms part of the dual-listed sulphate of potash (SOP) developer’s long-term plan to develop an integrated SOP operation producing from several Western Australian salt lakes.
By the end of the quarter ending 31 March 2021, the Process Plant, where the Group initiated commissioning at that month, was 97% complete on an earned value basis, including engineering 99% complete, procurement 99% complete and construction 90% complete. As a result, the first SOP product is now expected during the June quarter.
Yesterday, the Group informed investors that it had received its Part IV Environmental Approval for the Lake Way project covering full-scale operations of 245 000 tpy of (SOP).
The permit enables the Company to finalise its construction of pond trains 4-6 as well as associated trench and bore construction that will support full scale operations at Lake Way.
"Receiving final Environmental Approval over the full Lake Way project will enable our team to commence construction of the remaining on-lake infrastructure and deliver the full scope of the Lake Way project,” CEO, Tony Swiericzuk highlighted in his statement on Thursday.
Last month, the Group successfully syndicated its $138m Senior Debt Facility, with Sequoia Economic Infrastructure Income Fund ("SEQI”) and the Commonwealth Bank of Australia.
Speaking of the syndication, Swiericzuk said, “The breadth and quality of investors that have been attracted to this facility is testament to the robust financial characteristics and positive environmental credentials of the project and its proficient execution by the SO4 team.”
In addition, the Company unveiled its suite of SOP products designed to spread exposure across the various SOP sub-markets and maximise premiums and revenue. This includes SOP Precision, a product designed for the fertigation market; SOP Prime, a high potassium content SOP and SOP Premium, a granular SOP for basal applications and bulk blending.
“Significant progress was made on Process Plant construction as well as financing and product positioning during the March quarter, setting us up for first SOP sales in the June quarter. Our focus is now on successful commissioning and ramp-up of the process plant as we look to move into positive cash flow from our first operating SOP asset,” said Swiericzuk.
Shares in Salt Lake Potash have increased by 4.5% since the beginning of 2021. Following a strong quarterly report released back in January, SO4’s focus now remains on looking forward to the first SOP product at the Lake Way project during the June quarter.
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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