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Australian Potash DFS forecasts 30-year operation to generate $3.1 billion in cash flow

The definitive feasibility study (DFS) on the Lake Wells Potash Project estimated a pre-tax NPV of $665 million.

Australian Potash Ltd - Australian Potash DFS forecasts 30-year mine to generate $3.1 billion in cash flow
A program of front end engineering design (FEED) will commence immediately

Australian Potash Ltd (ASX:APC) has completed a DFS for its 100% owned Lake Wells SOP Project in Western Australia.

The DFS envisions a 30-year operation producing 4.5 million tonnes of premium high-grade sulphate of potash (SOP) and generating $3.1 billion in pre-tax free cash flow.

The mining method used is a brine bore-field abstraction model, which means the brine containing the SOP will sourced from aquifers by 70 or more bores across the salt lake.

The operation will cost $208 million to build (capex) and have a pre-tax net present value (NPV) of $665 million.

The company noted that financing and off-take discussions are rapidly advancing.

APC’s managing director and CEO Matt Shackleton said: “The APC team are understandably proud to deliver the findings of the DFS on developing the LSOP as one of the state’s premier mining/agricultural operations.

“Our premium high-grade Sulphate of Potash Project will be a hallmark operation in commencing a new export industry for the Eastern Goldfields region of Western Australia. We also plan to reserve a significant portion of output for the Australian market.

“The project will use a bore-field to abstract brine, mitigating the geotechnical challenges and decline in grade and production over time, evident in trenching systems.

First quartile operating costs

“The project has an extremely competitive capital intensity, forecast first quartile operating costs and exceptional returns.

“The completion of the DFS enhances APC’s ability to finalise binding off-take agreements, optimise and secure the finance debt package, finalise the approvals process and commence FEED activities.

“We look forward to continuing to update shareholders as the Board considers the next important steps in the development of the Project.”

FEED program commencing immediately

The DFS defines a project delivery schedule of 24 months post a final investment decision (FID).

First production of SOP is expected to commence six months prior to the processing plant output achieving name-plate capacity.

A program of front end engineering design (FEED) will commence immediately.

Quick facts: Australian Potash Ltd

Price: 0.097 AUD

ASX:APC
Market: ASX
Market Cap: $34.68 m
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