Salt Lake Potash inks financing deal with Taurus Funds Management
Salt Lake Potash has mandated Taurus Funds Management to provide $150m (£123.5m) project financing for the Lake Way Project, it announced on Monday.
The AIM-traded company said the arrangement with Taurus was an important step in progressing the development and financing of the Lake Way Project.
Following recent equity raises totalling AUD 27.65m (£15.4m), the staged project financing enabled the firm to complete the bankable feasibility study, conclude the acquisition of strategic tenements from Blackham Resources as announced on 23 July, and continue early construction works to advance the Lake Way Project prior to the drawdown of the main project development facility, the board explained.
Salt Lake Potash said it was “rapidly” developing the Lake Way Project, and had made “substantial” construction progress over the past few months.
Significant milestones included the completion of the first commercial scale on-lake evaporation pond, and the start of the evaporation process with the dewatering of the super saturated brine from Williamson Pit.
The company said the stage 1 facility would enable it to progress works into the second stage of construction, being the continued expansion of the extensive on-lake evaporation pond and trench network.
It said the stage 1 Facility would provide initial access to funding for early construction works for the Lake Way Project, and completion of the bankable feasibility study.
The facility would partly fund civil works, including the construction of key evaporation ponds, which would provide the initial harvest salts to enable the feed for plant commissioning.
Given the lead-time required to generate harvest salts, the facility was described by the company as a “crucial part” of accelerating Lake Way's development towards commercial sulfate of potash production.
The facility also included $5m to partially fund the transaction with Blackham, available upon completion of that transaction.
Taurus said it had obtained investment committee approval for the stage 1 facility, with the financing agreements having been executed.
Drawing would occur upon satisfaction of conditions precedent typical for financings of such a nature, which the board said were “well progressed”.
Salt Lake Potash said the project development facility would be used for refinancing the stage 1 facility, and for project development and working capital associated with the development of the Lake Way Project.
The facility would become available upon completion of the bankable feasibility study, and satisfaction of conditions precedent to the lender's satisfaction.
Conditions precedent were customary for a project financing of such nature, the board claimed, and included execution of financing agreements, satisfying the equity requirement based upon a cost to complete analysis and offtake agreements being agreed.
The company said it had been in discussions with potential financiers since the beginning of the year, with multiple proposals received, and the “superior” Taurus proposal ultimately selected.
Taurus had reportedly completed “substantial” due diligence on the Lake Way Project, and once the stage 1 facility was drawn, would work closely with the firm throughout the bankable feasibility study in order to ensure the project development financing documentation and conditions precedent were progressed in a timely manner.
“This is an exciting development for Salt Lake Potash and its stakeholders, providing a clear runway for the company to progress the construction of the Lake Way Project,” said chief executive officer Tony Swiericzuk.
“Salt Lake Potash is delighted to have entered into this long-term partnership with Taurus and we look forward to working with them through our bankable feasibility study and as we continue the construction at Lake Way.
“Taurus' commitment is a strong endorsement for the Lake Way Project and the exceptional team that has been built.”