PERTH (miningweekly.com) – Potash developer Salt Lake Potash will raise A$28-million through a share placement to enable the final debt drawdown and access to additional funding through a bank guarantee provided by financier Sequoia Economic Infrastructure Income Fund (SEQI).

The company in March this year completed the syndication of its $138-million syndicated facility agreement with Taurus Mining Finance Fund No 2, and the Clean Energy Finance Corporation, with SEQI and the Commonwealth Bank of Australia.

Salt Lake on Monday said that proceeds from the placement, which consisted of 80-million new ordinary shares priced at 35c each, would be used for general operating expenses during the ramp-up of the Lake Way project, in Western Australia.

The share placement will be done in two tranches, with the first tranche of more than 77.1-million shares to be issued under the company’s existing placement capacity.

The second tranche of more than 2.8-million shares would be subject to shareholder approval, with a general meeting scheduled for July this year.

The placement was a key condition to Salt Lake undertaking the final $33-million drawdown under the syndicated facility agreement, as well as providing for the implementation of an A$18-million guarantee facility to be provided by SEQI in support of the gas pipeline constructed.

The guarantee facility provided by SEQI will release A$18-million in equity that will be used for general operating expenses during the ramp-up of the project.

“Salt Lake is pleased to have completed this placement of A$28-million to enable final drawdown under the syndicated facility agreement. The company can now focus on ramping up production as we move to first revenue from the Lake Way project in the very near term,” said CEO Tony Swiericzuk.

Lake Way is expected to produce 245 000 t/y of sulphate of potash (SoP) over a mine life of 20 years, based on the high grade probable ore reserve of 5.4-million tonnes SoP.