Brand CEO Alan Green discusses Salt Lake Potash #SO4, Vast Resources #VAST, ECR Minerals #ECR & FairFX #FFX with Justin Waite on Vox Markets podcast. The interview is 33 minutes in.
Investors woke up to a cracking announcement from Salt Lake Potash (AIM:SO4) this morning concerning a Memorandum of Understanding (MOU) for an Offtake Agreement with the Chinese fertiliser giant Sinofert Holdings Limited. The MOU sets out the basis for the second Offtake Agreement for SO4’s potentially vast Goldfields Salt Lakes Project (GSLP) for an initial 8 year term, beginning in January 2020.
This latest Offtake Agreement will provide Sinofert with sales and offtake rights for up to 50% of ALL Sulphate of Potash (SOP) production from across all the nine vast lakes in Western Australia which comprise the GSLP. In all, GSLP hosts a drainable exploration target of over 150Mt of SOP.
Soon, SO4 is planning to begin the construction of the Demonstration Plant at GSLP to produce 50,000 tpa of high-quality SOP, with the production being distributed by a handful of global distribution partners. Once the Demonstration Plant is up and running, the team has well-developed plans to progressively expand production across a number of the lakes within the GSLP. This is SO4’s second offtake agreement, having already entered into an agreement with Mitsubishi Corp for sales and offtake rights to 50% of the SOP production from the 50,000 tpa Demonstration Plant.
It worth taking a closer look at Sinofert which is the largest fertiliser company in China, with businesses encompassing the complete fertiliser industry chain. In all, this well-established fertiliser giant handles something like 13Mtpa of fertilisers as well as being the biggest fertiliser importer into China. Hong Kong-listed Sinofert is capitalised at over US$1 billion and is majority-owned by Sinochem Corporation, a Chinese State Owned Enterprise.
This deal serves to underline the viability and the economics of SO4’s vast high-grade SOP brine projects in Western Australia. Investors should realise that SOP represents a premium sustainable potash fertiliser which currently sells at more than double the price of the more commonly used MOP. With SOP being a high value fertiliser which is increasing being favoured by global demographics and in the shift to high value speciality crops such as citrus, potatoes, nuts, strawberries, mangoes, tomatoes, coffee, tobacco, spinach and peas.
Salt Lake Potash Limited (“Salt Lake” or “Company”) advises that trading in the shares of the Company have been halted on the Australian Securities Exchange (“ASX”) effective from Monday 1 October 2018. The halt was requested by the Company pending an announcement of a memorandum of understanding regarding additional offtake arrangements.
The trading halt will remain until the earlier of an announcement to the market regarding the above or the opening of trade on ASX on 3 October 2018.
Trading in the Company’s ordinary securities will continue on AIM during this period.
The Belarusian Potash Company has signed a new contract with its Chinese buyers at a higher than expected price of $290 a tonne, up 25 per cent from the previous year.
The agreement with China, the world’s biggest potash user, provides a benchmark for the whole sector, where companies including Nutrien and Mosaic are prominent players. BPC said it had signed a contract running through to June 2019 with Sinofert, CNOOC and CNAMPGC.
The agreement follows a new settlement between BPC and its Indian buyers, and suggests that the potash market could be bottoming out. Consultants at Cru, said that the higher Chinese contract price indicates a rise in margins for international potash producers selling into the world’s largest consumer of the material.
The agreement comes as key potash producers in Canada have kept supply tight over the past two years, according to analysts at Bernstein. Demand is also stabilising from farmers. “A US farmer is break-even today despite the trade wars, while Latin American farmers benefit greatly from their weakening currencies and US/China trade struggles,” said Jonas Oxgaard at Bernstein.
Salt Lake Potash#SO4 & Australian Potash ASX: #APC to Study Benefits of Cost Sharing at Lake Wells
Highlights:
Salt Lake Potash Limited (ASX/AIM: SO4) and Australian Potash Limited (ASX: APC) have entered into a Memorandum of Understanding and Co-operation Agreement to study the potentially very substantial benefits of sharing infrastructure and other costs at Lake Wells
The Companies will conduct a joint study into the merits of developing aspects of their respective Lake Wells projects together (the ‘Study’)
The Study will initially focus on a shared costs model around infrastructure developments
The Study will also address at a high-level the potential for cost sharing on common evaporation and salt processing developments
Both Companies’ projects at Lake Wells will proceed independently in parallel with the Study with no impact on either Company’s timelines
Salt Lake Potash Limited (ASX/AIM: SO4) and Australian Potash Limited (ASX: APC) are pleased to advise that the Companies have entered into a Memorandum of Understanding and Co-operation Agreement to undertake a joint study of the potential benefits of development cost sharing for each Company’s project developments at Lake Wells.
The Companies’ substantial project holdings at Lake Wells are contiguous with many common infrastructure elements, including access roads, proximity to the Leonora rail terminals, and potential power and fresh water solutions. Both Companies anticipate substantial potential Capex and Opex benefits from some level of infrastructure sharing, with further potential benefits arising from shared or common evaporation and salt processing facilities.
A paleochannel extending in excess of 140 kilometres traverses the Companies combined tenement holding over Lake Wells. Recently both APC and SO4 have been granted initial Mining Leases over their respective projects at Lake Wells.
APC’s scoping study released in March 2017 indicated a staged development producing 150,000 tpa rising to 300,000 tpai of premium grade Sulphate of Potash (SOP) from its stand-alone development. APC has a 2012 JORC Mineral Resource Estimate (calculated from drainable porosity) of 14.7 Mti of SOP (derived from a total of 72 Mt contained in total porosity).
SO4’s scoping study released in August 2016 indicated a staged development producing 200,000 tpa rising to 400,000 tpa on a fully ramped basis. SO4 has reported a total JORC Mineral Resource at Lake Wells of 80-85 Mt of SOP (Stored Resource).
Logistics and Infrastructure
Each Company’s project is based on heavy haulage road transport from Lake Wells to the rail head at either Malcolm (280kms) or Leonora (300kms), utilising the same haulage route. There is compelling logic in pursuing the economies of scale inherent in a (larger) shared solution as well as sharing the capital costs for road upgrades, haulage equipment and other transport and handling facilities. There is similar synergy potential in shared power, air transport, accommodation and process water costs.
Both projects have very similar brine chemistry given they are essentially hosted on the same paleochannel. Naturally they will also experience the same climatic conditions, meaning the process flowsheets for each project should be very similar. This offers the opportunity for potential additional savings by a co-operative arrangement extending to evaporation and salt processing facilities.
The Companies have agreed to constitute a joint study team to carry out an initial assessment of the merits of infrastructure cooperation. The team will also conduct a high-level review of potential benefits of upstream operational synergies. A substantial part of the Study work will be outsourced to independent engineers and both Companies intend to continue with their independent project developments in parallel with the Study.
The information in this Announcement that relates to APC’s Exploration Targets and Mineral Resources is based on information that was compiled by Mr Duncan Gareth Storey. Mr Storey is a Director and Consulting Hydrogeologist with AQ2, a firm that provides consulting services to the Company. Neither Mr Storey nor AQ2 own either directly or indirectly any securities in the issued capital of the Company. Mr Storey has 30 years of international experience. He is a Chartered Geologist with, and Fellow of, the Geological Society of London (a Recognised Professional Organisation under the JORC Code 2012). My Storey has experience in the assessment and development of paleochannel aquifers, including the development of hypersaline brines in Western Australia. His experience and expertise are such that he qualifies as a Competent Person as defined in the 2012 edition of the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore reserves”. Mr Storey consents to the inclusion in this report of the matters based on this information in the form and context as it appears.
The information in this Announcement that relates to Salt Lake Potash Limited’s Mineral Resources is extracted from the reports entitled ‘Lake Wells Resource Increased by 193% to 85Mt of SOP’ dated 22 February 2016 and ‘Significant Maiden SOP Resource of 29Mt at Lake Wells’ dated 11 November 2015. These announcements are available to view on www.saltlakepotash.com.au. The information in the original ASX Announcements that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
The information in this Announcement that relates to Salt Lake Potash Limited’s Lake Wells Scoping Study is extracted from the report entitled ‘Scoping Study Confirms Potential Confirms Lake Wells Potential’ dated 29 August 2016. The Announcement is available to view on www.saltlakepotash.com.au. The information in the original announcement that relates to processing, infrastructure and cost estimation are based on and fairly represents information compiled or reviewed by Mr Zeyad El-Ansary, who is a Competent Person as a member of the Australasian Institute of Mining and Metallurgy. Mr Zeyad El-Ansary has 9 years’ experience relevant to the activities undertaken for preparation of these report sections and is a employed by Amec Foster Wheeler. Mr Zeyad El-Ansary consents to the inclusion in the report/press release of the matters based on their information in the form and context in which it appears. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
Production Target
Australian Potash Limited’s Lake Wells SOP Project’s Production Target, as stated in this Announcement is based on the it’s Scoping Study as released in the ASX announcement of 23 March 2017 ‘Scoping Study Confirms Exceptional Economics of APC’s 100% Owned Lake Wells Potash Project In WA’. That announcement contains the relevant statements, data and consents referred to in this announcement. Apart from that which is disclosed in this document, Australian Potash Limited, its directors, officers and agents: 1. Are not aware of any new information that materially affects the information contained in the 23 March 2017 announcement, and 2. State that the material assumptions and technical parameters underpinning the estimates in the 23 March 2017 announcement continue to apply and have not materially changed.
Salt Lake Potash Limited’s Lake Wells Production Target stated in this Announcement is based on it’s Scoping Study as released to the ASX on 29 August 2016. The information in relation to the Production Target that Salt Lake Potash Limited is required to include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in its ASX Announcement released on 29 August 2016. Salt Lake Potash Limited confirms that the material assumptions underpinning the Production Target referenced in the 29 August 2016 release continue to apply and have not materially changed.
Note
i Refer to ASX announcement 23 March 2017 ‘Scoping Study Confirms Exceptional Economics of APC’s 100% Owned Lake Wells Potash Project In WA’. That announcement contains the relevant statements, data and consents referred to in this announcement. Apart from that which is disclosed in this document, Australian Potash Limited, its directors, officers and agents: 1. Are not aware of any new information that materially affects the information contained in the 23 March 2017 announcement, and 2. State that the material assumptions and technical parameters underpinning the estimates in the 23 March 2017 announcement continue to apply and have not materially changed.
The Companies will conduct a joint study into the merits of developing aspects of their respective Lake Wells projects together (the ‘Study’) The Study will initially focus on a shared costs model around infrastructure developments
But a group of pioneering ASX companies reckon it also has the potential to be a major hub for potash — a mineral salt that’s critical in plant, animal and human life.
There are some 30 ASX-listed companies active in potash, but it is not a well-understood industry.
Over the past year, 16 of 28 potash-related stocks tracked by Stockhead have made gains of 4 per cent to 263 per cent.
Potash comes from salts that contain potassium in water soluble form. It is used as a fertiliser.
There are two commonly used fertilisers – muriate of potash (MOP) and sulphate of potash (SOP).
MOP is the most common (around 90 per cent of the world’s potash) and is used on a variety of crops. However, the more chloride-sensitive crops like avocados, coffee beans and cocoa require SOP – which fetches $US270 per tonne more than MOP.
The global potash market is estimated to be around 75 million tonnes.
Demand is set to increase as the global population grows to around 8 billion by 2023.
Greg Cochran, the boss of Pilbara potash explorer Reward Minerals (ASX:RWD) told Stockhead an extra 100,000 to 150,000 tonnes of potash will be required each year.
Right now Australia imports all its potash from Canada, the Middle East and Europe. Australia’s MOP and SOP consumption is around 250,000 tonnes each year.
China and big plantation-focused countries in southeast Asia – like Malaysia and Indonesia – are expected to be the key contributors to demand growth.
The potash market is perhaps one of the most stable compared to other commodities, with the price difference between MOP and SOP remaining close to $US270 per tonne for the past three years.
Pilbara could rival world’s largest potash exporter
Reward believes the Pilbara could become the next Saskatchewan – a region in Canada that is currently the world’s largest exporter of potash.
Canada produced 12 million tonnes of potash last year and the bulk of that came from Saskatchewan.
Mr Cochran said director Michael Ruane saw the potential of the Pilbara early on.
“Mick saw it first, where he said: ‘this has the potential to be the next Saskatchewan’,” Mr Cochran said.
“That’s the potash potential of this broader region in which we operate up here [the Pilbara], and with the climatic conditions it’s ideal and it’s a lot closer than Saskatchewan is to Vancouver.”
Saskatchewan is nearly 1700km from Vancouver.
By comparison, Reward’s Lake Disappointment project is less than 900km from Port Hedland – which is where the company is planning to ship its SOP product from.
“I’m not talking just about Lake Disappointment, but other projects further inland, and we’ve got some really good insights into the geological potential that we as a company have learnt over the last 12 years,” Mr Cochran said.
“In fact, when we talk to government ministers that’s part of the conversation. There’s a dream there, this vision is big.”
A recent pre-feasibility study indicated Reward’s Lake Disappointment project will produce 9 million tonnes of SOP over a 27-year life.
Reward says it will be one of the world’s largest and longest-life brine SOP projects.
The who’s who of potash
Australia does not currently produce any of its own potash, but the bulk of the production will eventually come from WA.
Kalium Lakes (ASX:KLL) this week announced it has increased the measured and indicated resources for its flagship Beyondie SOP project in WA by 150 per cent.
This is expected to translate into a “substantial increase” in ore reserves, which is also due for an update this month, managing director Brett Hazelden told investors earlier this week.
Kalium’s share price has jumped 31 per cent to 46.5c since this time last year.
The Beyondie project currently has enough in reserves to mine 75,000 tonnes each year for more than 23 years.
Kalium is the closest to production, having already been granted the necessary mining licence and received approval for its mining proposal and mine closure plan.
The company expects to be able to start early construction works this year.
Kalium is also in a joint venture with BCI Minerals (ASX:BCI) on the Carnegie potash project, which is located about 220km east-north-east of Wiluna.
BCI diversified into salt, SOP and gold following the steep drop in iron ore price.
The company, which was once known as BC Iron, has witnessed a 15.6 per cent drop in its share price over the past year and is trading around 13.5c.
BCI is now selling off its Pilbara iron ore projects after it sunk to a $16.9 million loss in FY18.
The company can earn up to a 50 per cent interest in the Carnegie project by sole-funding exploration and development expenditure across several stages.
The Carnegie project lies directly north of Salt Lake Potash’s (ASX:SO4) Lake Wells project and Australian Potash’s (ASX:APC) project, which is also named Lake Wells.
Salt Lake also has another project near Wiluna called Lake Way.
Salt Lake Potash Limited (the Company) is pleased to announce the appointment of Mr Clint McGhie as Chief Financial Officer and Company Secretary of Salt Lake Potash.
Mr McGhie is an experienced Chartered Accountant and Company Secretary who commenced his career at a large international accounting firm and has since been involved with a number of ASX and AIM listed exploration and development companies operating in the resources sector, including Apollo Minerals Limited, Berkeley Energia Limited and Sovereign Metals Limited. Mr McGhie is also an Associate Member of the Governance Institute of Australia (Chartered Secretary), and a Fellow of the Financial Services Institute of Australasia.
Mr McGhie has been appointed following the resignation of Mr Sam Cordin who has accepted a business development role with a resources development company. The Board would like to thank Mr Cordin for his excellent service to the Company, in particular his instrumental input into the acquisition and growth of the Goldfields Salt Lake Project.
Brand CEO Alan Green talks Bacanora Lithium #BCN, Salt Lake Potash #SO4 & Great Portland Estates #GPOR with Justin Waite on the Vox Markets podcast. Interview is 8 mins 17 secs in.
The Company is pleased to advise that a new corporate presentation, which is being presented by the Company’s CEO Matthew Syme at Diggers and Dealers today, is now available to view on the Company’s website: www.saltlakepotash.com.au
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SALT Lake Potash has outlined a demonstration-style development in Western Australia that could cost A$50 million to build and be capable of yielding 50,000 tonnes per product selling for about $667 per tonne at a cost of $387/t FOB.
Notionally at least, such a margin would generate annual cashflow at an operational level of $14 million per annum.
The demonstration project at Lake Way is based on previously mined gold open pits at Lake Way near Wiluna containing super-saturated brine, and is intended to validate the technical and commercial viability of large scale brine SOP production of 400,000 tonnes per annum.
Salt Lake Potash believes a full scale project development – at Lake Wells, east of Wiluna – could produce at operating costs of $185/t FOB.
Assuming positive feasibility work Salt Lake Potash’s objective is to produce initial harvest salts in mid-late 2019 for initial SOP production in early 2020, subject to permitting, weather and other parameters.
By Emiko Terazono
The Pilbara region of Western Australia is best known for iron ore — and 
Salt Lake promotes Lake Way demonstration numbers
Notionally at least, such a margin would generate annual cashflow at an operational level of $14 million per annum.