Salt Lake Potash (SO4 ) has released its results for the half-year ended 31 December 2020 citing its progress at its core project, the Lake Way Project near Wiluna, Western Australia.

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. 

On 31 December 2020, SO4 said the total project was 81% complete and the process plant 88% complete on an earned value basis with first SOP production expected in Q4 2021.

Fig. 1; Process plant ariel view

(Source: Salt Lake Potash)

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.

Fig. 2; Train 1 kainite cells back in operation post-harvest and halite cell harvesting

(Source: Salt Lake Potash)

The group added that ‘significant’ progress was made in the December quarter in financing, operations and construction and at the corporate level with the strengthening of its board with the appointments of Phil Montgomery and Peter Thomas as Non-Executive Directors.

In December 2020, SO4 also 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.

The Group informed investors that it is in a financial position to conduct its current and planned exploration and development activities. At 31 December 2020, the Group held cash reserves of $96.9m (30 June 2020: $7m) and net assets of $221.1m (30 June 2020: $60.1m).

Investors will recall SO4 executed the $138m Syndicated Facility Agreement (“SFA”) with Taurus Mining Finance Fund No.2 L.P (Taurus) and the Clean Energy Finance Corporation (CEFC) in August 2020. As at 31 December 2020, $33m of this was available to draw down.

Post-period, the company has successfully completed its share purchase plan (“SPP”) after the group increased the offer size to A$8.0m following strong demand from retail investors.

“The funds raised through the placement and SPP have enabled the Group 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,” said CEO, Tony Swiericzuk. 

Earlier this month, SO4 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.”

The company noted that no adjustments have been made to its results as at 31 December 2020 for the impacts of COVID-19 but stated that it has implemented ‘significant controls.’

Shares in So4 have risen by over 15% since the beginning of 2021. Following a strong quarterly report released back in January, SO4’s focus now remains on looking forward to production and first sulphate of potash sales at its Lake Way project in March 2021.  

The stock was trading 0.94% higher this morning at 26.75p following the announcement.

Reasons to 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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