PERTH (miningweekly.com) – Potash developer Australian Potash has made a data room available on its Lake Wells sulphate of potash (SoP) project, in Western Australia, as it canvasses for development funding opportunities to bring the project online.

Australian Potash last year released an economic analysis of higher output at the Lake Wells SoP project, which found that by increasing production from the planned 170 000 t/y of SoP to 205 000 t/y of SoP, the project’s net present value would increase by 65%, from A$614-million to A$1.01-billion, while its internal rate of return would increase from 21% to 22%.

The higher output would also see average annual earnings before interest, taxes, depreciation and amortisation rise by 27%, from A$124-million to A$158-million yearly, while operating costs would decline by 17%, from $251/t to $295/t.

Meanwhile, capital cost estimates for the project would also increase by 39%, from the A$292-million originally considered, to A$408-million.

In addition to hunting for a funding partner for Lake Wells, Australian Potash on Tuesday also reported that it had inked a binding letter of intent for the sale of its Laverton Downs project, after being approached by a third party. On the execution of a formal sales agreement, Australian Potash will receive A$10 000 in cash.

On completion of the acquisition, the company will receive A$200 000 in cash, subject to meeting all the prescribed expenditure conditions over the tenements. Australian Potash would also be reimbursed all costs incurred in relation to keeping the tenements in good standing, and would receive a royalty equal to 1.5% of the net smelter return generated over the minerals extracted from the tenements.

The Laverton Downs project comprises six tenements and is located 5 km north of Laverton, with the tenements prospective for gold and nickel sulphide.