Salt Lake Potash’s Lake Way Project nears completion
(SO4 ) said its Lake Way Project at Wiluna in Western Australia is nearing completion with the process plant and overall project m88% and 81% complete respectively as of 31 December 2020.
Process plant commissioning is therefore expected to commence in February with introduction of first feed salts to the plant in March. The project capital budget remains unchanged at A$264m.
"I am extremely proud of the way the GR Engineering Services and SO4 teams have worked to safely and efficiently deliver the Lake Way project,” said CEO of SO4, Tony Swiericzuk.
He highlighted that, “Significant progress was made in a challenging environment in 2020 with minimal impact on the project and we now look forward to supplying the domestic and global agricultural industries with premium SOP in the second quarter of 2021."
The company also noted that four primary conveyor structures that feed the plant and discharge waste NaCl have now been fully erected and will be commissioned in the next few weeks.
It said the raw water pond has been lined and commissioned, and both the Southern and West Creek Raw Water Borefields supplying the plant and village have been commissioned while concrete footings for the gas generators have been completed and will arrive this week.
Total procurement for the Process Plant reached 96% by the end of 2020. The company said it is working closely with GRES and its suppliers to minimise the impact of any potential delays caused by shipping. At this stage, delays in shipping will not impact commissioning.
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.
Appointment of Interim CFO
Meanwhile, the company announced that it has appointed Grant Coyle, an experienced corporate finance executive, as Interim CFO ahead of a permanent CFO appointment.
Shares in Salt Lake Potash have increased by 35% in value since the beginning of April 2020 to open 7.78% higher this morning at 24.25p following the announcement. Investors will be pleased the project is on budget and with further positive news this month from the Organic Farmers & Growers association in the UK (OF&G) that have approved the Lake Way potassium sulphate (SOP) product for use in organic farming in the UK, any market size discussions will undoubtedly generate further positive Newsflow in 2021
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.
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.
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.
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