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Australian Potash's Lake Wells project approved to proceed by NAIF

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World Fertilizer,

Australian Potash Ltd. (APC ) has announced that a formal response has been received from the Northern Australia Infrastructure Facility (NAIF), advising that the Lake Wells sulfate of potash project (LSOP) has been approved to proceed to due diligence.

The due diligence phase of the NAIF process is initiated with the allocation of resources to conduct a detailed assessment of the company’s request for funding. All other aspects of discussions between the company and NAIF are required to remain confidential at this time, and there has been no commitment of funding or agreement of terms by the NAIF at this stage.

Managing Director and CEO, Matt Shackleton, commented: “The NAIF and APC have engaged on a very proactive basis to date on the LSOP funding application, and it is pleasing that the NAIF has committed to the formal due diligence process. APC’s Board looks forward to further updating shareholders on its progress on the various funding and offtake initiatives, and permitting status, for the LSOP in the near future.”

The LSOP Definitive Feasibility Study (DFS)

On 28 August 2019, APC, announced the completion of an AACE Class 3 DFS (+15%/- 5%) on developing the LSOP into a 150 000 tpy sulfate of potash (SOP) operation. The DFS was prepared by Lycopodium in conjunction with consultants including Novopro, AQ2, Knight Piésold, and MBS Environmental.

The LSOP will use a bore field to abstract brine, mitigating geotechnical challenges and a decline in grade and production over time evident in trenching systems.

Highlights of the DFS include:

  • Pre-tax NPV8 of AUS$665 million
  • Annual pre-tax free cash flows of AUS$100 million and LOM pre-tax free cash flows of AUS$3.1 billion
  • Pre-tax IRR of 25% on robust operational and capital efficiencies
  • 150 000 tpy SOP production rate
  • Long life project with lowest quartile production costs:
  • - 30 year mine life with LOM production of 4.5 Mt of premium high-grade SOP
    - LOM cash cost of US$262/t placing the LSOP in the first quartile of the SOP cost curve
  • Development CAPEX of AUS$208 million
  • Competitive capital intensity of AUS$1387/t SOP
  • LOM production is met by a 3.6 Mt Probable Reserve and draws on a Measured Resource of 18.1 Mt drainable SOP

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