PERTH (miningweekly.com) – The Lake Way potash project, in Western Australia, is fully funded after owner Salt Lake Potash executed a $138-million debt financing package and a fully underwritten equity placement and accelerated non-renounceable entitlement offer to raise A$98.5-million.

The ASX-listed Salt Lake on Wednesday said that a $138-million syndicated facility agreement was struck with Taurus Mining Finance Fund, which will provide $91-million in funding, and the Australian federal government’s Clean Energy Finance Corporation (CEFC), which will fund up to $47-million.

The finance facility will have a four-year tenor and an interest rate of 9% a year, payable quarterly on drawn funds, with no scheduled repayments or debt amortization until the end of March 2022.

“Completion of this financing package is a major milestone in Salt Lake’s evolution. It enables the company to deliver the Lake Way project on schedule and sets up the business for growth in the future as we pursue our vision of a multiple lake sulphate of potash (SoP) province in Western Australia,” said Salt Lake CEO Tony Swiericzuk.

It is the culmination of a year’s work and we would like to thank our financiers Taurus, the CEFC and our shareholders for their support in facilitating the development of a new export industry for Australia.”

In addition to the debt financing package, Salt Lake will also undertake a fully underwritten placement and accelerated non-renounceable entitlement offer, priced at 50c a share, to raise A$98.5-million.

More than 197-million ordinary shares will be on offer, with eligible shareholders invited to apply for one new share for every 3.2 shares held, at an offer price of 50c a share. The offer price represented an 18% discount to Salt Lake’s closing price on August 4, and a 16% discount to the company’s five-day volume weighted average share price.

The placement will include both a retail and institutional component, with the institutional component to open on August 5, and the retail component from August 14.

The Lake Way project is expected to produce 245 000 t/y of SoP over a mine life of 20 years, based on the high grade probable ore reserve of 5.4-million tonnes SoP, with first sales targeted for the first quarter of 2021.

Federal Energy and Emissions Reduction Minister Angus Taylor on Wednesday noted that the project will create around 430 full-time jobs in Western Australia during the construction phase and more than 100 ongoing jobs, including opportunities for members of local Indigenous communities.

“Australian farmers are among the most efficient farmers in the world and they will benefit from having access to new low-emissions fertiliser to improve crop productivity and help lower emissions in the agricultural sector,” Taylor said.

“This project could lead to a new export industry for Western Australia while also helping to meet the growing demand for food in Australia.

“This project will also create new regional jobs at an important time as the Australian economy recovers from Covid-19.”

“Innovative projects like this will help lower emissions in the agriculture industry. This project in particular has the potential to cut emissions by more than 30% compared to other non-brine SoP production methods,” the Minister added.