Australian Potash to raise up to $5.2m

Australian Potash is seeking to raise up to $5.23 million via a rights issue, with the funds set to primarily go towards its Lake Wells potash project, located approximately 200 kilometres north of Laverton.

The company will offer three rights shares for every 14 existing shares held, at an issue price of 8 cents per rights share, with one attaching option exercisable at 12 cents before August 9 2021.

The rights issue is set to be underwritten to $4.2 million by Patersons Securities, which will also act as lead manager.

Australian Potash said its directors intended to participate in the raising.

In a statement, the company said the funds from the issue would be used to complete the definitive feasibility study for its Lake Wells project and general working capital.

In March 2017, the company completed a scoping study that estimated the project would generate an annual pre-tax cash flow of $118 million, with a mine life of 20 years.

The pre-production capital expenditure is projected to be $338 million.                              

Shares in Australian Potash were down 15 per cent to trade at 9 cents each at 3.30pm AEDT.