Australian Potash shows low-cost pathway to construction

Australian Potash has successfully ticked off another important milestone supporting its definitive feasibility study, or “DFS”, at the Lake Wells sulphate of potash project near Laverton, WA.

The company recently constructed a pre-concentration brine pond, designed to test the suitability of the engineered design and effectiveness of the brine seepage barriers.

The barriers were constructed using a mix of clay and a binding agent known as a “geopolymer”.

These materials are easily installed using regular earth-moving equipment, with most raw materials sourced from nearby soil and clays that occur naturally in the adjacent dunes.

The company declared the trial a success and revealed that the results provided a significant competitive advantage for the project, as the large-scale pond construction will now not require any expensive, specialist equipment.

In addition, as the raw materials were locally sourced, the cost of trucking in construction material and equipment hire would be greatly reduced.

Australian Potash began filling the trial pond with potassium and sulphate-bearing brine in July and in-line with the company’s estimations in the DFS, the trial showed that the seepage loss was an acceptable 2%.

Low seepage rates result in a higher rate of salt crystallisation and lower brine pumping requirements and are therefore more commercially advantageous in the long-term.

Australian Potash Managing Director and CEO Matt Shackleton said: “We can now confirm the most economically and technically optimal construction method for the pond perimeter walls and internal bunding, which is central to the efficacy and speed of future development plans”.

The company’s Lake Wells project will be developed using a bore-field network to extract the potassium and sulphate-bearing brines that lie within ancient paleochannels.

The brine will then be pumped into the salt-lake pre-concentration ponds that are designed to take advantage of the natural clays and landscape.

The supersaturated brine will then be transferred to harvest ponds where the sought-after salts will naturally crystallise and get collected for processing into purified sulphate of potash products.

Australian Potash recently tabled an impressive DFS that shows the project is expected to generate pre-tax free cash flows of $3.1 billion over an impressive 30-year mine life.

These numbers seem even more remarkable when, according to the company, this 30-year mine life forecast uses a mere 21% of the total measured resource.

The trial pond’s completion has provided the company with confidence in the geochemical and engineering models that are crucial for the long-term success of this intriguing project.

With an ore reserve of 3.6 million tonnes of sulphate of potash and production potentially kicking off within two years of the company reaching a final investment decision for Lake Wells, Australian Potash seems to have crystallised its strategy of a low-cost production pipe-line well in WA.

Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au