Trigg to make $97m a year for 21 years from WA fertiliser project

Trigg Mining has delivered a robust scoping study evaluating the proposed development of its Lake Throssell “sulphate of potash” fertiliser project in WA. The company says the project could generate $97m a year in EBITDA over a 21-year initial mine life. The project is about 170km north-east of Laverton in WA and Trigg will now launch into a pre-feasibility study to firm up its numbers.

Management says the company’s 100 per cent owned Lake Throssell project could represent a top ten global sulphate of potash, or “SOP”, producer, with costs to produce a tonne of product expected to fall in the lowest quartile when compared to market peers.

A net present value of $364 million with an internal rate of return of 18 per cent were estimated by the scoping study.

Annual production is estimated at about 245,000 tonnes of SOP per annum over the initial mine life, with an average annual revenue of $180m and a pay-back period of just 4.5 years.

A respectable average cash operating cost per tonne of just $341 is expected, with an all-in sustaining cost looking more like $372 per tonne of SOP.

An initial capital cost of $378 million is also projected.

The scoping study was underpinned by an upgrade to a portion of the total mineral resource to the higher “indicated” category which will be mined for over 80 per cent of the 4.5 years required to pay the capital back.

The project now takes in a ‘drainable’ indicated resource of 4.2 million tonnes of SOP at a head-turning 4,770 milligrams per litre potassium, or 10.6 kilograms per cubic metre potassium sulphate.

The total drainable mineral resource at Lake Throssell now clocks in at an impressive 14.4 million tonne at 4,655mg/L potassium, or 10.6kg/m3 potassium sulphate.

Trigg Mining Managing Director, Keren Paterson said: “The Scoping Study outcomes strongly vindicate our long-held belief that Lake Throssell is a potential company-maker – a high-quality, long-life asset which can transform Trigg into a modern, sustainable Australian SOP producer with a Top 10 globally competitive Project.”

“The key attributes of the Project are clearly highlighted in this Study – the scale and quality of the Resource, its Tier-1 location, proximity to infrastructure and ability to support a multi-decade operation which can also deliver a number of exceptional ESG outcomes. Apart from the social and economic benefits it will provide, the Project utilises solar evaporation to produce a natural fertiliser essential for global food security.”

The proposed operation will involve harvesting of saline brine water from subterranean aquifers. In turn, solar evaporation of the brine will generate a naturally forming SOP for use as a fertiliser and other industrial purposes around the world.

The global population is forecast in some sectors to reach 8.6 billion by 2030 whilst arable land has reduced by more than half since the 1970s.

Potash could play a key role in producing more crops from less land to meet the growing demand for food around the world and Trigg could be right in the thick of things if the stellar numbers from its Lake Throssell scoping study are anything to go by.

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