Australian Potash has received recognition for the test work activities at its Lake Wells sulphate of potash, or “SOP”, project near Laverton, WA, with the receipt of a $1.3 million research and development tax rebate.
This relates to work carried out in the financial year ending 30 June 2018 that is anticipated to reduce the capital cost of the project in the definitive feasibility study.
Proceeds from the tax refund will be used to complete the work streams feeding into the study, which is scheduled for release before the end of this year.
Lake Wells is located 280km by road from bulk rail terminals near Leonora in the northern WA Goldfields region.
In March 2017, Australian Potash calculated a JORC mineral resource of 14.7 million tonnes of contained SOP, most of which is in the higher confidence indicated category.
Since then, the company has carried out more than 4,000 metres of brine drilling, including two production wells, diamond core and several monitoring bores to assess aquifer response during test pumping.
Under the scoping study released at the same time, Lake Wells was envisaged as a two-stage project that would initially produce 150,000 tonnes of premium potash per annum for the first five years.
This would then increase to 300,000 tonnes per annum during the second stage.
Pre-production capital costs for the first stage were estimated at $175m, with $163m estimated for the second stage of project development.
At an SOP price of $795 per tonne, the project generates a life of mine annual operating pre-tax cashflow of $118m.
Payback for the first stage is expected within just three years at the assumed sales price of $795 per tonne of potash.
