- American Pacific Borates (ABR) is currently revising its Fort Cady mine plan to double its production of Sulphate of Potash or SOP
- SOP is a low-chlorine, potassium-based fertiliser used for crops that are intolerant to chlorine or that grow in dry environments
- Phase 3 is now targeted to be nearly 218,000 metric tonnes per annum of SOP, which is double the amount of current planned production
- ABR is targeting an EBITDA per annum of over US$400 million in the first full year of production
- Based on the location of the mine and the cost of production per tonne, ABR is uniquely positioned to be a leading supplier of SOP in the U.S. market
- ABR is up 17.9 per cent with shares trading for 33 cents each
American Pacific Borates (ABR) is currently revising its Fort Cady mine plan to double its production of Sulphate of Potash (SOP).
SOP is a low-chlorine, potassium-based fertiliser used for crops that are intolerant to chlorine or that grow in dry environments where the build-up of chlorine is undesirable.
The revised mine plan outlined a phase three production target of 217,724 metric tonnes of SOP. This is double the amount of the production target outlined in the January 2019 Definitive Feasibility Study (DFS).
ABR’s decision to double SOP production at Fort Cady stems from the continued strength of the market which is expected to be long term.
“When coupled with the extremely competitive Fort Cady SOP market positioning, the Company sees significant advantages in increased production,” the announcement stated.
The U.S. market is currently a net importer of SOP with the only producer being Compass Minerals.
ABR however, thinks it can compete with Compass Minerals based on the fact SOP is a by-product of boric acid production and Fort Cady is located where the agricultural market is the largest SOP consumer.
Further good news for the company’s position is the cost of production for Phase 1A is US$143 (A$208) per tonne. This is significantly lower than existing producers supplying to the same market.
Based on the DFS that show US$345 million EBITDA (earnings before interest, tax, depreciation, amortisation) in the first full year of production, ABR is targeting a revised EBITDA of over US$400 million.
The company noted the increased SOP production won’t change the current timeline to the first production.
ABR is up 17.9 per cent with shares trading for 33 cents each at market close.