Australian Potash Limited updates flow model for increased SOP production

On 20 April 2021 the company announced to ASX the results of its Front End Engineering Design (FEED) study.

Further to that FEED study, analysis of results from recently completed brine supply bores on the LSOP demonstrates evidence of increased brine grade and sustainable pumping rates within the borefield (the subject of the FEED study.)

Updating the hydrogeological flow model with this data indicates the potential to increase the annual production of sulphate of potash (SOP) from the LSOP from 120 000 tpa shown in the FEED study to 135 000 tpa (an increase of 15 000 tpa or 12.5%). Additional improvements realised in the recent modelling also indicate that 89 supply bores will be suitable for life-of-mine (LOM) operation, whereas the original FEED development model had 172 bores over the LOM, a 48% reduction in installed bores.

Managing Director and CEO, Matt Shackleton, commented: “We continue to apply a rigorous de-risking methodology to the development and operational strategies at the LSOP, including crucially in the fundamental brine abstraction (mining) process. The LSOP will be developed as a 100% borefield abstraction project with no reliance on surface trenching to collect brine."

“The early works programme we undertook through 2021 and early 2022 has demonstrated improvements in the brine borefield, and data from constructed bores has allowed us to further optimise the flow model underpinning the LSOP development, providing us the opportunity to produce more SOP with less bores over the life of mine."

“The financial implications of these results are being worked through, but less bores means lower initial capital cost and lower sustaining capital costs which we reasonably anticipate will flow through to the LSOP’s financial outcomes. Updated financial modelling will be announced to ASX as soon as it is available.”

Higher annual production rate

In the company’s Definitive Feasibility Study (DFS) released in August 2019, SOP production from brine abstraction was projected to be 100 000 tpa, resulting in a Probable Reserve of 3.6Mt (utilising ~20% of the in-situ Measured Resource). An additional 50 000 tpa was forecast in that DFS to be produced through the addition and conversion of Muriate of Potash (MOP) to SOP.

The brine abstraction rate was optimised through the FEED study, leading to optimised SOP output of 120 000 tpa.

Through the DFS, external consultants AQ2 prepared a hydrogeological model for the proposed development of the LSOP. This model has been updated regularly with actual data generated in the field. Short term pump testing allows the reconciliation of the modelled early-time flow rate at each bore to the actual early-time flow rate likely to be recorded in operations. The inclusion of the data from the test pumping of the bores completed to date in the hydrogeological model, reconciles positively and indicates the potential to increase the annual SOP production from brine abstraction to 135 000 tpa (+15 000 tpa/12.5%).

Reduction in Capital Expenditure

A further improvement derived from the updated flow model is seen in the reduction in the number of bores required to produce the necessary brine flow. Where the FEED model indicated a required 79 bores at startup, expanding to 172 bores over the life of the LSOP, the current model revises the required bores down to only 89 bores over the life of mine. The potential cost savings over the life of the mine from the reduction in bores required may be substantial.

Higher grade

Along with the reduction in bore number, the updated flow model predicts higher grade and a longer production profile. The implications to the pond network, harvest ponds, and processing plant are being thoroughly considered in light of the improved flow model.

Background

Prior to mobilisation of equipment for the first phase production bore drilling program in 2021, APC had developed seven test production bores at Lake Wells, six deep bores into the basal aquifer, and a shallow bore into the upper aquifer only. All six deep bores were pump tested and four were considered suitable as production bores. Two bores installed during the trial phase have proven to be poorly constructed and unsuitable for the project development.

Inclusion in the hydrogeological flow model of the ‘early works’ bores completed during 2021 has increased the data density in the model. This has resulted in a higher modelled overall flow rate and brine grade as noted above. Pumping tests were carried out upon completion of the majority of the bores to assess the efficiency and determine the sustainable flow rate and other important hydrogeological parameters.

On a linear basis, currently constructed bores account for the development of approximately 20% of the LSOP’s borefield. On a volume basis the bores developed to date account for approximately 35% of required brine flow for full scale production.

There has been no material change to the previously estimated resource for the project previously announced to ASX3.

Read the article online at: https://www.worldfertilizer.com/potash/07062022/australian-potash-limited-updates-flow-model-for-increased-sop-production/