Name of the Project
Beyondie sulphate of potash project (BSoPP).
Location
Western Australia.
Project Owner/s
Kalium Lakes Limited (KLL).
Project Description
The front-end engineering and design (FEED) for Beyondie has delivered even further improved production and financial outcomes, including:
• a 10% increase in the production rate, from 82 000 t/y of sulphate of potash (SoP) in the September 2018 bankable feasibility study (BFS) to an estimated 90 000 t/y Stage 1 SoP facility, ramping up to a 180 000 t/y full-scale facility (BFS 164 000 t/y) proposed in the FEED;
• an overall system potassium recovery improvement, from 72% to 91%, as a result of debottlenecking the process plant and an increase in the potassium recovery from the flotation tails stream; and
• a decrease in the total evaporation pond size, from 445 ha to 399 ha.
The initial mine life is estimated at more than 30 years and up to 50 years.
The SoP product quality has remained the same, at a premium from 51% to 52% potassium oxide, with negligible chloride and minimal insoluble material.
Potential Job Creation
The Beyondie project will create up to 80 jobs during construction and employ about 50 full-time workers over the 30-year life of the mine. It will also result in important infrastructure being added to the regional community, with the construction of an airstrip, upgraded roads, improved communications and a 78 km gas pipeline.
Net Present Value/Internal Rate of Return
The project’s pretax net present value has increased from A$575-million, at an 8% discount rate in the BFS, to A$606-million in the FEED, while the internal rate of return of has decreased from 20.4% 20.3%.
The September 2018 BFS estimated an initial payback of seven years.
Capital Expenditure
Preproduction capital for Stage 1 has increased from A$159.6-million in the definitive feasibility study (DFS) to A$216-million in the FEED.
Planned Start/End Date
The project was approved in October 2019. Commissioning and ramp-up to nameplate throughput is expected in 2020.
Latest Developments
Kalium Lakes has announced a A$50-million capital raise to fund the expansion of its BSoPP.
The company will issue about 278-million new shares at 18c each in two tranches.
The first tranche will comprise about 209.8-million shares to raise an initial A$37.8-million under the company’s existing share placement capacity. A second tranche of 68-million shares, to raise a further A$12.2-million, will be subject to shareholder approval at the company’s annual general meeting, scheduled for November.
Kalium Lakes will also conduct a share purchase plan (SPP) to raise up to A$10-million, enabling existing shareholders to subscribe for up to A$30 000 worth of additional shares in the company.
The SPP will open on October 22 and close on November 11.
Kalium Lakes' biggest shareholder, Greenstone, which holds 20.5% of the company’s shares, has committed to take up between A$8.8-million and A$11.3-million under the offer to retain a holding of 19.8% after the offer and SPP.
Greenstone will participate across both tranches of the offer and the final quantum of its participation will depend on the take-up under the SPP.
The funds raised will be used on the A$43.5-million expansion of the Beyondie SoP project from its current 90 000 t/y to 120 000 t/y, which is targeted to be achieved by the fourth quarter of 2022. The expansion followed first SoP production earlier this month.
Kalium Lakes has also reported the restructuring of its existing debt arrangements with its two senior lenders, KfW IPEX-Bank and the state of Western Australia, and the provision of an additional liquidity facility of A$20-million.
The key terms of the debt restructure include a deferral of all senior principal repayments for the first two years of production until the end of March 2024, and a two-year extension to the maturity of the senior loans owed by its wholly owned subsidiary, Kalium Lakes Potash until March 2033.
The additional A$20-million liquidity facility provided by the senior lenders is a general purpose facility, which has replaced the A$15-million working capital facility previously provided by Westpac, and will be available for six months, with the potential to be extended for another six months at the discretion of the senior lenders.
The liquidity facility will be used for short-term working capital purposes while the company secures additional funding for the capital expenditure to expand production to 120 000 t/y.
Key Contracts, Suppliers and Consultants
KLL (DFS), K-UTEC AG Salt Technologies (K-UTEC) and Ebner (engineering, procurement and supervision); K-UTEC, DRA Global, Advisian, Shawmac, Wyntak and Preston Consulting (principal technical consultants and FEED); RSM, DLA Piper Australia, HopgoodGanim Lawyers and BurnVoir Corporate Finance (accounting, legal, commercial and financial advisers); Edgen Murray (manufacture and supply of the coated line pipe), Pipecraft (pipeline installation); and Primero (design, supply and construction of the inlet and delivery stations, as well as the pipeline).
Contact Details for Project Information
KLL, tel +61 8 9240 3200 or email info@kaliumlakes.com.au.