04/11/2020 - 14:30

Australian Potash raises $7m

04/11/2020 - 14:30

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Australian Potash has secured further funding for its proposed Lake Wells development in Western Australia.

Australian Potash is developing its Lake Way sulphate of potash (SOP) project in WA's Goldfields. Photo: Australian Potash

Australian Potash has secured further funding for its proposed Lake Wells development in Western Australia.

The Lake Wells sulphate of potash (SOP) project is situated 160 kilometres north-east of Laverton, in WA’s Goldfields region.

Australian Potash, based in Subiaco, is currently completing a front-end engineering design (FEED) program on the project, with updated financial and physical outcomes expected later in the year.

The proceeds raised from a $7 million placement will go towards completing the FEED program, as well as securing further offtake agreements, finalising a syndicated debt facility (that includes NAIF funding), awarding an EPC contract and completing environmental approvals.

Australian Potash will also complete minor pre-development activities.

Managing director Matthew Shackleton said Lake Wells was a low cost, high return and low carbon-emitting development.

It is expected to produce 4.5 million tonnes of premium high-grade SOP over a 30-year mine life, at a cost of $US262/t.

Lake Wells holds a pre-tax net present value of $665 million.

It is expected to generate $100 million in annual pre-tax free cash flows. CAPEX is $208 million.

Australian Potash will issue about 63 million shares priced at 11.1 cents each, with the placement jointly led by Euroz Hartleys Securities and Canaccord Genuity.

The bookbuild was oversubscribed.

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