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- American Pacific Borates (ABR) remains on track for construction activities to begin at the Fort Cady Borate Mine in the September quarter
- Fort Cady is located in southern California and will supply the growing demand of sulphate of potash and boric acid
- Construction is expected to take roughly 12 months and will benefit local employment
- ABR is conducting financing activities and discussions to progress the project on schedule
- Once construction is complete, operations should commence by the second half of 2021
- ABR is up a healthy 20 per cent and shares are trading for 42 cents each
American Pacific Borates (ABR) has announced it remains on track for construction activities to begin at the Fort Cady Borate Mine in the September quarter.
Construction is expected to take roughly 12 months and will likely employ 140 people during peak periods.
Once construction is completed, the resulting mine will employ at least 250 people in full production.
ABR is awaiting to be awarded the final operational permit to enable it to commence construction activities in the third quarter.
Fort Cady is located in Southern California and is a highly rare and large colemanite deposit and is the largest known contained borate occurrence in the world not owned by the two major borate producers Rio Tinto and Eti Maden.
In an updated definitive feasibility study (DFS) released last month, ABR outlined an increase in sulphate of potash (SOP) production to 363,000 tonnes per annum. This compliments intended boric acid production of 409,000 tonnes per annum.
The increase aligns with the expected increase in demand for SOP in California, Mexico and other areas of the U.S. SOP is used for various vegetable, fruit and seed crops.
Borates also are in high demand, with more than 400 uses globally. The main uses are ceramics, fibreglass and fertilisers.
“This is an exciting phase in the company’s development and in meeting our aspiration to become a globally significant producer of specialty fertilisers,” CEO Michael Schlumpberger said.
The company expects production from phase 1A will be relatively small, with SOP production being around 30 per cent of the total California market and boric acid production around one per cent of the total U.S. market.
Financing activities
ABR has successfully re-negotiated some contracts to reduce upfront payments whilst ensuring engineering and procurement activities can still be progressed on schedule.
Following the release of the enhanced DFS on April 16, the company has commenced an active financing process. In particular, ABR is focused on re-engaging with global sources that specialise in financing natural projects.
ABR is also exploring, off take-related prepayments with discussions at an advanced stage, Federal and Californian loan guarantee schemes, equipment financing options and project level partners.
The company also raised over $7 million in February this year through a capital raise to fund Fort Cady’s development.
In addition, ABR has been focused on preserving cash, especially during uncertain market conditions relating to COVID-19. As of March 31 2020, ABR had roughly $6.7 million cash in the bank.
ABR is up a healthy 20 per cent and shares are trading for 42 cents each at 11:05 am AEST.
