Australian Potash Ltd (ASX:APC) has signed an agreement with the Port of Geraldton that allows the company to continue to optimise logistics and port options for the Lake Wells Sulphate of Potash Project (SOP).
The Joint Cooperation Agreement has been signed with the Mid West Ports Authority, the operator and manager of Geraldton Port.
It provides for the port and Australian Potash to progress discussions on the export of Sulphate of Potash and import of Muriate of Potash.
Critical component advanced
Australian Potash managing director and CEO Matt Shackleton said the agreement advanced a critical component of the development and operation of the Lake Wells SOP Project.
“This agreement allows APC to further optimise the logistics and port options for the project,” he said.
“It is the first of a number of material development and operational agreements we will finalise during the Front End Engineering Design (FEED) Study.”
The agreement advances definitive feasibility study (DFS) findings that utilised a road haul solution to Geraldton Port.
Lake Wells SOP Project is about 500 kilometres northeast of Kalgoorlie, in Western Australia’s Eastern Goldfields.
FEED Study advances
Following the release of the DFS in August 2019, APC is focused on the 6-month FEED Study, finalising offtake discussions and securing financing to develop the project.
The DFS was underpinned by extensive and rigorous test work, data and modelling, and confirmed that the project will be a long life, low capital and high margin SOP producer.
Key DFS outcomes include:
- • 30-year mine life annually producing 150,000 tonnes of premium grade SOP;
- • Long mine life underpinned by 3.6 million tonnes reserve and 18.1 million tonnes measured resource estimate;
- • Pre-tax NPV8 of A$665 million and an IRR of 25%;
- • Development capex of A$208 million with sector-leading capital intensity of A$1,387/tonne; and
- • First quartile industry opex of US$262/tonne providing high cash operating margins.