(AIM:SO4 ) looked back on a busy quarter as the group said it has continued to work on advancing its Lake Way sulphate of potash (SOP) project in Western Australia.
In the quarterly financial report for the period ending 30 September 2020, the SOP company told investors that it was on track for its first delivery of SOP in the March quarter of 2021.
Over the quarter, SO4 successfully secured financing for the project after executing an A$203m debt financing package and A$98.5m fully underwritten equity raising.
The financing package includes a A$203m Syndicated Facility Agreement (SFA) with Taurus Mining Finance Fund No2 LP and the Clean Energy Finance Corporation (CEFC) and a $98.5m placement and accelerated non-renounceable entitlement offer (ANREO) at 50 cents.
Source: SO4, Figure 3: Commissioning of fourth pond train underway. Construction progressed on the fourth pond train and commissioning commenced during the quarter. Brine Chemistry across the pond network continues to align with modelled outcomes.
As a result, the group now has enough cash to fund Lake Way through to first production, with the group holding $67.3m worth of cash and cash equivalents by period end.
In a former statement, Tony Swiericzuk, Chief Executive Officer of Salt Lake Potash, said the completion of the financing package represented a “major milestone in SO4's evolution.”
Salt Lake also progressed necessary permits for a full-scale operation by submitting an environmental review document (ERD) to the WA Environmental Protection Authority (EPA).
Shares in Salt Lake Potash have increased over 20% in value since late September 2020 and closed Thursday afternoon trading at 31.5p.
The review included floor study modelling, a salt dissipation study, a mine closure plan. Board members of the EPA had visited the site during Q3 and the group received advice from EPA services. A revised ERD in response to these comments was then submitted.
The Company said it is not aware of ‘any major impediment’ to obtaining EPA approval.
SO4 is developing the Lake Way project as an integrated SOP operation to produce from several of its nine salt lakes to take advantage of this gap in the Australian materials market.
Source:SO4, Figure 4: Process plant site. Progress at the process plant and non-process infrastructure site also accelerated during the September quarter. At quarter end, installed concrete is 97% complete with the remaining primary concrete to be completed this month.
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.
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