PERTH (miningweekly.com) – Sulphate of potash (SoP) developer Kalium Lakes has welcomed equity investment firm Greenstone Resources as a cornerstone investor, following a A$20.8-million investment.
Kalium Lakes on Wednesday told shareholders that it would issue more than 47.3-million shares to Greenstone, at a price of 44c each, to raise the capital. The investment would result in Greenstone holding a 19.9% interest in Kalium Lakes.
“Securing a cornerstone investment partner of the caliber of Greenstone will allow Kalium Lakes to continue its momentum to achieve Australia’s first commercial SoP production next year,” said MD Brett Hazelden.
“With this key equity placement and terms recently agreed for debt funding of up to A$74-million from the North Australian Infrastructure Fund and A$102-million from KfW IPEX-Bank, our project financing pathway is now clearly identified.”
In addition to the share placement, Kalium Lakes and Greenstone have also entered into a cooperation agreement to assist in the development of Kalium Lakes’ projects.
The cooperation agreement would see Greenstone provide technical and financial assistance to Kalium Lakes, while also introducing the company to potential strategic investors, financiers or other capital providers.
The share placement to Greenstone will be conducted in two tranches, with the first tranche consisting of more than 18.9-million shares to be issued under the company’s existing placement capacity some five days following the execution of the subscription and cooperation agreement.
The second tranche placement of more than 28.4-million shares, also under the company’s existing placement capacity, will be conducted 13 business days after the execution of the agreements.
Following the share placement, Greenstone will be granted the right to appoint a representative to the Kalium Lakes board for as long as the company maintains a 15% shareholding, as well as two representatives to a project steering committee that will be established to assess and review the progress of the Beyondie SoP project and the Carnegie potash project.
Kalium Lakes is now expected to take a final investment decision on the Beyondie project in the second quarter of this year.
The A$250-million Beyondie project will produce 150 000 t/y SoP, with the option to incrementally phase the project through a ramp-up from 75 000 t/y to 150 000 t/y to minimise operational and financial risks.