PERTH (miningweekly.com) – ASX-listed Australian Potash will raise A$10-million in a share placement to fund activities at the Lake Wells sulphate of potash (SoP) project, ahead of a final investment decision.

The placement will be undertaken in two tranches, with the first consisting of more than 62.2-million shares, priced at 14c each. The first tranche placement will be conducted under Australian Potash’s existing placement capacity.

A second tranche of more than 9.2-million shares would be subject to shareholder approval.

Australian Potash told shareholders on Monday that the funds raised would be used for drilling of paleochannel production wells at Lake Wells, the start of early works for the staff village, finalising the syndicated debt facility with the commercial bank club, and starting a maiden diamond drill hole programme across the Laverton Downs nickel sulphide targets.

“The heavy institutional and sophisticated investor demand for the offer reflects well on the Lake Wells SoP project’s very robust financial metrics and supports our transition into development,” said Australian Potash MD and CEO Matt Shackelton.

“The Lake Wells SoP project still carries the largest 100% measured Joint Ore Reserves Committee-compliant SoP resource across the space, which speaks to the technically de-risked nature of the development.

“With over 75% of value of construction contracts to be executed under the engineering, procurement and construction strategy, long tenor debt that includes the Northern Australian Infrastructure Fund and Export Finance Australia, and 100% bore-field brine abstraction, Australian Potash’s development strategy provides a clear path to successful operations,” said Shackelton.

The A$208-million Lake Wells SoP project could deliver 150 000 t/y of SoP, based on the maiden reserve of 3.6-million tonnes, and would have a mine life of 30 years.