PERTH (miningweekly.com) – A scoping study into the Lake Way sulphate of potash (SoP) project, in Western Australia, has shown that the project could produce some 200 000 t/y of premium-grade SoP over a mine life of 20 years.
ASX-listed Salt Lake Potash on Thursday reported that the project could have the lowest operating costs of any global SoP producer at a free-on-board operating cost of A$264/t.
The scoping study estimated that the project would require a capital investment of A$237-million, but would deliver steady-state earnings before interest, taxes, deprecation and amortization of A$90-million a year, and an average annual after-tax cash flow of A$64-million.
Lake Way’s post-tax net present value has been estimated at A$381-million and its internal rate of return at 27%, with the scoping study estimating a pay-back period of 3.2 years.
Salt Lake has now launched a bankable feasibility study for the Lake Way project, which will be completed in the third quarter of this year. The completion of the feasibility study is expected to assist in project financing, with Salt Lake pointing out that the company had recently completed a A$20.25-million capital raise through a share placement to strategic investors.
The company said on Thursday that it was in advanced discussions with a debt provider for a debt funding package that would support the Lake Way project.