Australian Potash raises funds for Lake Wells

According to Mining News Pro - The company placed an initial 40-million shares, at a price of 5c each to sophisticated and professional investors under its existing placement capacity.

The rights issue, which will also be priced at 5c a share, would allow shareholders to subscribe for one new share for every seven shares held at the record date of May 8.

Australian Potash noted that the issue price represented a 35.1% discount to the company’s closing price on April 28, being the last trading day before the announcement of the rights issue.

The funds raised will be used to progress the front-end engineering and design activities at the Lake Wells sulphate of potash (SOP) project, in Western Australia, finalising commercial discussions for offtake and project debt facilities, and for general working capital.

“Building on the 70 000 t/y binding offtake term sheet already announced, the offtake programme to contract the remaining balance to reach the target of 125 000 t/y to 135 000 t/y of our projected 150 000 t/y output is well advanced,” said Australian Potash MD Matt Shackleton.

“Our approvals pathway through the Environmental Protection Authority (EPA) is highly visible and firmly on track. Australian Potash considers full-scale commercial development approval through the EPA prior to allocating capital to project development as the least risk approvals process,” he added.

He noted that with the Northern Australian Infrastructure Fund conducting a due diligene on the Lake Wells project, the project financing programme has also commenced in earnest, with financing providers in Australia and internationally.

“We very much look forward to the continued participation of our existing and new shareholders in this active and exciting period for the Lake Wells project, with results from the front-end engineering and design optimisation programme targeted for the second half of the year,” Shackelton said.

The A$208-million Lake Wells SOP project could deliver 150 000 t/y of SOP, based on the maiden reserve of 3.6-million tonnes, and would have a mine life of 30 years.