Salt Lake closer to potash production

Salt Lake Potash has moved into the construction stage for its Lake Way project in Western Australia's Goldfields after signing two contracts with GR Engineering Services, worth a combined $107 million.

Salt Lake is one of few explorers in the state seeking to develop its potash operations, with Nedlands-based Agrimin recently awarded major project status from the federal government for its Mackay project near Wyndham.

Meanwhile, fellow explorer Kalium Lakes recently launched a heavily discounted capital raising to cover an overrun in capital costs associated with the company's Beyondie project, south-east of Newman.

Perth-based Salt Lake announced today it had contracted GR Engineering Services to design and build the process plant and non-process infrastructure for the Lake Way project.

The project capital budget had increased from $254 million to $264 million, Salt Lake said, including an allocated $18 million contingency.

The contracts follow a combined $75.5 million in financing made through capital raisings and a debt extension, which Salt Lake said would go towards construction works at the Lake Way site.

Chief executive Tony Swiericzuk said GR Engineering had been a critical project partner since early last year.

“The finalisation of these major project contracts and the substantial engineering and procurement activity to date has further de-risked the Lake Way project execution and confidence around the capital budget,” he said.

The Lake Way project, located about 15 kilometres south of Wiluna, is expected to produce 254,000 kilograms of sulphate of potash (SOP) per annum, over a mine life of more than 20 years.

Salt Lake acquired the project tenements from Blackham Resources in October last year for a total $17 million payment, which included a contribution to Blackham's Williamson goldmine in WA.

Shares in Salt Lake were up nearly 4 per cent at 3:40pm AEST to trade at 52 cents, while GR Engineering shares were up 2.7 per cent to trade at 75 cents.