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Australian Potash Ltd announce project update

Published by
World Fertilizer,


Australian Potash Ltd (APC) has provided an update on the programmes of work scheduled to position the company to make a final investment decision (FID) during 1Q21.

Highlights

  • Offtake programme continues with positions secured for 130 000 t/+86% of forecast DFS output.
  • All 5 EPC packages’ tender documentation issued and bids received for three packages are being evaluated for award recommendations.
  • EPA Report and Recommendation made to the Minister for the Environment.
  • Project finance due diligence processes underway, including the Northern Australia Infrastructure Fund (NAIF) and domestic and international institutions, and on track to complete early 4Q20.
  • Minor and preliminary works approval in place with scheduled works to commence 4Q20.

Managing Director and CEO, Matt Shackleton, commented: “Our highly experienced team have made great progress across the work programmes we are finalising to bring the FEED programme to a close and report optimised results through 4Q20.

“Our marketing programme continues apace, with active discussions around several lucrative jurisdictions. Marketing leads directly into the project financing programme, where due diligence has been underway through September.

“The EPA has completed their report into the development of the LSOP and has made their recommendation to the Minister.

“The competitive tendering process we are running for all packages of work is drawing to a close with several bids having already been received. Bid review is underway and recommendations for award being prepared.

“The various approvals and permits required for us to commence works under the Minor and Preliminary Works approval previously granted by the EPA are now being finalised, with site activities being scheduled for 4Q20.

“Notwithstandig the operating restrictions caused by the COVID pandemic, it is very pleasing to report that APC remains on track to complete all of the above work programs and make a final investment decision on developing the LSOP in early 2021.”

Marketing programme

  • Tier 1 international partners with strong market positions and financial capacity.
  • Take or pay volume commitments.
  • 130 000 t representing 86% of the DFS pre-optimised production output.

Contracting strategy being effected

Engineering, procurement and construction contracts, providing certainty on schedule, cost and performance, being tendered for:

  • SOP process plant, borefield fit out and high-voltage reticulated power network, high-penetration hybrid renewable power station, communications network, and accommodation village.

Reimbursable/schedule of rates contracts being tendered for:

  • Borefield drilling and civil earthworks (including pond developments).

Several bids have already been received for tendered packages, with optimised capital and operating expenditure in the FEED model reflecting these contracted positions.

Approvals programme

In early September 2020, the EPA submitted their report and recommended to the Minister for the Environment that the Lake Wells Sulfate of Potash Project be approved for development. Following an appeals period, which expired 21 September 2020, the EPA and APC have been advised that an appeal against the EPA report and recommendation has been made. Based on their submission to the Appeals Convenor, it does not appear the appellant is seeking anything that APC considers to be unusual in relation to development of a minerals project. It is understood that the Appeals Convenor will consider the appeal in the normal course of their processes and determine what further action, if any, is required. APC does not consider that the conclusion of those processes will affect the critical path of the LSOP development.

Project financing

The NAIF traditionally acts as a ‘lead in’ lender and allows borrowers to shape a more compelling debt-equity ratio. Several domestic and international project lending institutions are conducting their initial due diligence investigations, with this formal debt process being managed for APC by third party consultants Origin Capital.

Next steps

QuarterMilestone
4Q20Finalise offtake programme
4Q20Finalise approvals pathway
4Q20Complete FEED optimisation, report outcomes
4Q20Complete debt financing due diligence, appoint lead arranger, and credit approvals 
4Q20Award EPC contracts
1Q21Final investment decision
1Q21Commence construction

Read the article online at: https://www.worldfertilizer.com/project-news/25092020/australian-potash-ltd-announce-project-update/

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