Australian Potash (ASX:APC) - Managing Director & CEO, Matt Shackleton
Managing Director & CEO, Matt Shackleton
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  • Australian Potash (APC) has optimised the sustainable development of sulphate of potash (SOP) at its Lake Wells Project in WA
  • Thanks to a front-end-engineering and design program, the project is set to produce 170,000 tonnes per year of premium “K-Brite” SOP products
  • Additionally, APC has executed five binding take-or-pay offtake agreements with tier one global fertiliser distribution partners
  • The deals cover 90 per cent of Lake Wells’ optimised forecast output, providing downside price protection and uncapped upside premium
  • Concurrently, the company’s K-Brite product has achieved green certification for use in organic agriculture by institutions throughout Europe
  • Meanwhile, APC has approved a $140 million loan facility from Northern Australian Infrastructure Facility and conditional credit approval for a $45 million facility from Export Finance Australia
  • APC is now progressing to a final investment decision to develop the Lake Wells SOP Project
  • Australian Potash shares are down 2.86 per cent, trading at 17 cents each

Australian Potash (APC) has optimised the sustainable development of sulphate of potash (SOP) at its Lake Wells Project in Western Australia.

Following a front-end-engineering and design (FEED) program, the project is now set to produce 170,000 tonnes per year of premium-priced “K-Brite” SOP products for distribution to global markets.

According to APC, Lake Wells is the only project to be developed with 100 per cent bore-field abstraction of brine, with no re-charge or rainfall factors, included in the largest Australian JORC SOP resource of 18.1 million tonnes.

Multiple offtake agreements executed

Alongside a 20 per cent increase in project output, achieved through the FEED program, APC has executed five binding take-or-pay offtake agreements with tier one global fertiliser distribution partners.

The deals cover 90 per cent of Lake Wells’ optimised forecast output, providing downside price protection and uncapped upside premium.

Australian Potash Managing Director and CEO Matt Shackleton commented on the agreements.

“We will manufacture a range of premium finished products that will allow our partners to sell into the world’s highest price points for SOP,” Matt said.

“The $614 million net present value includes the granulation and bagging circuits required to tap these premium price points,” he added.

K-Brite granted green loan verification

The company has also taken steps to ensure that its SOP product will have a positive environmental impact.

Accordingly, its K-Brite branded product has achieved green certification from ECOCERT for use in organic agriculture in Europe.

CEO Matt Shackleton said K-brute can be regarded as a “truly green” fertiliser.

“SOP is globally regarded as the premium form of the essential, non-substitutable potassic fertilisers,” Matt commented.

“We are immensely proud to be developing an operation using an industry-high 44 per cent renewable energy penetration rate, [meaning] we will produce Australia’s lowest carbon footprint SOP and will generate approximately one-third of the emissions attributable to a comparable-sized Mannheim SOP process.

“As well as being certified for use in organic agriculture in many countries into which it will be distributed, the LSOP has received green loan verification.”

Loan facility secured

Meanwhile, the company’s $140 million loan facility from Northern Australian Infrastructure Facility (NAIF) has been approved for a period of 17 years.

The facility, along with conditional credit approval for a $45 million facility over 10 years with Export Finance Australia, is a part of the company’s syndicated development debt, which is still being finalised.

“Commercial banks, both domestic and international, continue their due diligence and credit approval processes with a view to providing core debt and working capital and cost overrun facilities normal to this type of development,” Matt said.

“We have significantly de-risked the construction of the LSOP with more than 75 per cent, by value of project contracts, being arranged on a lump sum engineering, procurement and construction basis,” he continued.

“These arrangements provide our stakeholders with protection against time and cost over-runs and in operations guarantees for performance.”

The company will award approximately 20 per cent of all construction contracts for the project to Aboriginal businesses or majority-controlled joint ventures.

APC will now progress to a final investment decision to develop the Lake Wells SOP Project.

Australian Potash shares are down 2.86 per cent, trading at 17 cents at 4:02 pm AEST.

APC by the numbers
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