Salt Lake secures $150m for Lake Way development

USA Utah News

KALGOORLIE (miningweekly.com) – Potash developer Salt Lake Potash has mandated Taurus Funds Management to provide a staged $150-million project finance facility to fund the Lake Way sulphate of potash (SoP) project, in Western Australia.

The Stage 1 facility will consist of $30-million, and will provide Salt Lake with funds for early construction works at the Lake Way project, and to fund the completion of a bankable feasibility study (BFS).

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The Stage 1 facility will partly fund civil works, including the construction of key evaporation ponds that will provide the initial harvest salts to enable the feed for plant commissioning.

The Stage 1 facility will also include $5-million in funding to partially fund the transaction with fellow-listed Blackham Resources, under which Salt Lake will acquire Blackham’s own Lake Way tenements for A$10-million.

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The $150-million project development facility will then be used to refinance the Stage 1 facility and to fund project development and working capital associated with the development of Lake Way.

The project development funding will become available on the completion of the BFS and the satisfaction of conditions precedent, which include the execution of financing agreements, and the satisfaction of equity requirements.

Salt Lake CEO Tony Swiericzuk said on Monday that the execution of the project financing facility provided the company with a clear runway to progress the construction of Lake Way.

“Salt Lake Potash is delighted to have entered into this long-term partnership with Taurus and we look forward to working with them through our BFS and as we continue the construction of Lake Way. Taurus’ commitment is a strong endorsement of the Lake Way project and the exceptional team that has been built.”

A scoping study into the Lake Way SoP project has found a capital investment of A$237-million would support a 200 000 t/y premium-grade SoP project with a mine life of over 20 years.

Lake Way’s post-tax net present value has been estimated at A$381-million and its internal rate of return at 27%, with the scoping study estimating a pay-back period of 3.2 years.

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