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Australian Potash Limited provides update on Lake Wells sulfate of potash project

Published by , Deputy Editor
World Fertilizer,

Further to its last announcement on 13 June 2023, Australian Potash Limited has provided the following update on the Lake Wells sulfate of potash project:

Strategic review process APC has been conducting an exhaustive funding process for the LSOP over the past 12 months. This was conducted against a backdrop of recent very high sulfate of potash prices, global fertilizer shortages and a project valuation of between A$774 million and A$1.025 billion. By the time the strategic process started, APC had completed detailed design and engineering and secured debt funding with NAIF, subject to raising the appropriate equity. The project was therefore effectively ready to go into construction once the equity was secured.

Having made data and information on the LSOP available to various parties, the strategic review process has not resulted in a transaction that was considered suitable for the company or its shareholders. As such, considering that this process has been adequately exhausted, the directors have made the difficult decision to cease this process.

There is no doubt that recent company failures in the developing WA potash industry have created a negative perception of solar SOP projects in WA. The directors and management of APC are confident the work done on the LSOP to date demonstrates it to be a high value, well-engineered project, supported by a thorough test work programme and on-site evaporation piloting, as disclosed through the company’s consistent ASX releases over the past nine years. However, and without a funding proposition to consider, the directors have made the difficult decision to surrender the LSOP mining leases, which have a high holding cost. The relevant documents have been lodged with the Department of Mining, Industry Regulation and Safety.

The company retains its interest in the exploration license tenure it holds at Lake Wells. The directors have received consideration of A$950 000 for components of the Lake Wells camp assets and are holding discussions around the sale of bore-field inventory and other site assets.

Chairperson, Natalia Streltsova, commented: “The directors of APC are extremely disappointed that the demise of local high-profile potash projects has largely contributed to the lack of investment support for our sector and project. Matt Shackleton and his team have shown professionalism and commitment to the project which makes it even more disappointing that we have been unable to secure equity funding.”

“We stress to shareholders that all possible options have been vigorously pursued in our efforts to preserve optimal value in the LSOP. We are fully committed to and already engaged in considering the company’s alternate project opportunities to generate value for our shareholders.”

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