Salt Lake Potash well-positioned for first production and SOP sales during June quarter after reaching key milestones in half-year ended December 2020
Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) (FRA:W1D) is well-positioned for first production and Sulphate of Potash (SOP) sales during the June quarter after reaching a major milestone in March with the feeding of potassium-rich harvest salts, precipitated from lake aquifer brine, into its Lake Way sulphate of potash (SOP) plant – the first company to do so in Australia. The company’s primary focus has been on the development of Lake Way near Wiluna in Western Australia, which currently is preparing the utilities, conversion circuit, flotation circuits, crystallisers and dryer to be all commissioned ahead of full load commissioning and SOP production. Key milestones since December quarter Since the December 2020 quarter, several key milestones have been achieved, including beginning salt harvesting, commencing the commissioning of the non-process infrastructure (NPI) in February, and starting front-end plant commissioning with the introduction of first feed salts in March. Front-end plant commissioning was powered by 2-megawatt diesel generators, which will continue to be used to progress the commissioning activities over the coming weeks. Gas supply lines and delivery station for the 10-megawatt power station have been fully commissioned, with power-on schedule for late April to support final commissioning activities and production commencement. With project capital remaining unchanged at around A$264 million, the process plant was 95% complete on an earned value basis on February 28 and with most of the work left comprising piping and electrical activities. Aerial view of Lake Way village and processing plant A staged ramp-up is planned over financial year 2022, with the company preparing to reach a run-rate of 245,000 tonnes per annum in the fourth quarter of 2022. Optimised logistic routes have been put in place with up to 200,000 tonnes per annum of Lake Way SOP to be sold via the Fremantle Port in sea containers loaded with: SOP in loose bulk; 1 to 1.5 tonnes bulk bags; and 25-kilogram bags. The products will be transported to Leonora by road, where it will be transferred onto rail for the remaining journey to Fremantle for export. Salt Lake Potash believes shipping through Fremantle will provide access to broader global markets at no additional net cost. Additional benefits of using Fremantle include a reduction in inventory working capital and a significant reduction in the logistics carbon footprint. Bulk shipment sales will remain out of Geraldton port.