PERTH (miningweekly.com) – A bankable feasibility study (BFS) into the Lake Way sulphate of potash (SoP) project, in Western Australia, has estimated that the project would require a capital investment of A$254-million to develop.
ASX-listed Salt Lake Potash on Friday told shareholders that the BFS estimated a post-tax net present value of A$479-million and an internal rate of return of 28%, with steady-state earnings before interest, taxes, depreciation and amortisation estimated at A$111-million.
The BFS also estimated average annual free cash flow of A$78-million, after tax.
The BFS is based on the production of 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.
The 245 000 t/y SoP output was higher than the 200 000 t/y considered in the scoping study, with Salt Lake choosing to revise the processing methodology to include the addition of potassium chloride, increasing the annual production rates and delivering improved economic outcomes.
“We are extremely excited to release the Lake Way BFS with such outstanding economic results. Significant work has been undertaken by the company since the Lake Way scoping study, which has further strengthened the project fundamentals,” said Salt Lake CEO Tony Swiericzuk.
“The BFS demonstrates the ability to significantly increase the production rate and optimise development capital while maintaining our position as a low cost producer.”
Salt Lake has significantly advanced the development of the project since the scoping study in June, including the completion of 125 ha of evaporation ponds, which are now filled with high-grade brine from the Williamson Pit.
Swiericzuk said that Salt Lake would continue with the progressive development of the remaining commercial scale evaporation ponds in the fourth quarter of this year.
Plant commissioning is expected to start in the fourth quarter of 2020, using the sales from the Williamson Pit brine.
In the meantime, company will start with the procurement of long lead items and was hoping to execute key offtake agreements with the preferred partners.