Another potash hopeful crumbles

Directors of Australian Potash have surrendered their mining leases and pulled the pin on a review process, blaming the ‘demise’ of local projects for a lack of investment support in the sector.

The Lake Wells project developer emerged from a trading halt on Tuesday advising that a strategic review process, which started earlier this year, had failed to yield a transaction.

Managing director and chief executive Matt Shackleton said the company had brought the 'best technical expertise' to the project and had binding offtakes in place with recognised potash distributors. 

“However, notwithstanding the nearly 10-year commitment to the LSOP development by APC’s management team, the current investment sentiment has for obvious reasons turned away from solar SOP development," he said in a statement. 

It comes not long after the collapse of fellow potash aspirant Kalium Lakes, which went into receivership after failing to get its flagship up to nameplate capacity. 

"There is no doubt that recent company failures in the developing WA potash industry have created a negative perception of solar SOP projects in WA," the statement from Australian Potash today read. 

Directors said they had made the difficult decision to surrender potash mining leases, due to high holding costs, for $950,000 but would be retaining the exploration licence tenure at Lake Wells. 

Chair Natalia Streltsova said the collapse of 'local high profile' potash projects largely contributed to the lack of investment support for the broader sector and APC's project. 

“We stress to shareholders that all possible options have been vigorously pursued in our efforts to preserve optimal value in the LSOP," Ms Streltsova said. 

"We are fully committed to and already engaged in considering the Company’s alternate project opportunities to generate value for our shareholders.”

Shares in Australian Potash sunk 42 per cent following the announcement to the market.