Salt Lake Potash buying series of tenements at Lake Way
Salt Lake Potash Limited (DI)
2.45p
15:48 19/11/21
Salt Lake Potash has entered into a sales agreement with Blackham Resources to acquire a package of tenements and other key assets for the Lake Way Project, it announced on Tuesday.
FTSE AIM All-Share
755.08
14:05 24/04/24
The AIM-traded firm said the transaction was another important step in providing it with certainty over the timing and capital expenditure required to bring the Lake Way Project into production.
Blackham and Salt Lake Potash had been cooperating on their respective projects in the Wiluna/Lake Way region for the past 18 months, the board explained.
Salt Lake Potash was progressing its bankable feasibility study for the Lake Way Project, and had identified specific Blackham assets which provided synergies for the project and material value to the company.
Salt Lake Potash said it had agreed to acquire the tenements owned by Blackham that sat on the northern end of Lake Way and to the east of the Gold Fields highway, as well as access and rights to process water from Blackham, with an option to acquire a key borefield which would support the Lake Way Project.
With effect from execution, Blackham had agreed to the immediate access to process water, and consent to the grant of new tenure over its tenements to enable Salt Lake Potash to advance early works including camps and water infrastructure.
The brine royalty granted to Blackham as part of the split commodity agreement would be extinguished effective 30 June 2020.
Salt Lake Potash said it would pay total consideration of AUD 10m (£5.64m), inclusive of AUD 0.5m payable under the split commodity agreement.
The company said it would also assume rehabilitation obligation for all existing disturbance on Lake Way.
Blackham retained the gold rights across the transferred tenements.
Salt Lake Potash and Blackham had reportedly identified a mutual opportunity for Salt Lake Potash to utilise part of the pre-strip material from Blackham's proposed Williamson Pit development for the construction of its on-lake evaporation ponds.
Under the arrangement, when Blackham recommissions the Williamson Pit operation, Salt Lake Potash would contribute up to $10m towards the performance of the pre-strip of the Williamson Pit, with pre-strip material directly applied towards the construction of the bund walls of the on-lake evaporation ponds.
That contribution formed part of the project's existing construction capital expenditure, and would be funded as part of project financing.
“This is an exceptional transaction for Salt Lake Potash that will provide significant benefits to the Lake Way Project and further support the rapid progress towards first production,” said chief executive officer Tony Swiericzuk.
“The acquisition will provide material value through capital and operating savings to Salt Lake Potash and also significantly de-risk the Lake Way Project by providing ownership of tenements and further access to key infrastructure assets including water and power.
“Salt Lake Potash is delighted to continue the strong relationship we have built with Blackham and look forward to further developing the mutual opportunities that exist with our adjacent operations.”