Salt Lake Potash Ltd (ASX:SO4) (LON:SO4)) has mandated Taurus Funds Management to provide a US$150 million project financing facility for the Lake Way sulphate of potash (SOP) project in the Western Australian Goldfields.
This arrangement with Taurus is an important step in progressing the development and financing of the Lake Way Project.
Stage 1 facility of U$30 million (about $42 million)
The Stage 1 facility will provide initial access to funding for early construction works for the Lake Way Project and completion of the Bankable Feasibility Study (BFS).
This facility will partly fund civil works including the construction of key evaporation ponds, which will provide the initial harvest salts to enable the feed for plant commissioning.
Given the lead-time required to generate harvest salts, this facility is a crucial part of accelerating Lake Way’s development towards commercial SOP production.
Project development facility (PDF) of US$150 million (about $214 million)
The PDF will be used for refinancing the Stage 1 facility and for project development and working capital associated with the development of the Lake Way Project.
The PDF will become available upon completion of the BFS and satisfaction of conditions precedent to the lender’s satisfaction.
Following recent equity raises totalling $27.65 million, the staged project financing enables the company to complete the BFS, conclude the acquisition of strategic tenements from Blackham Resources Ltd (ASX:BLK) and continue early construction works to advance the Lake Way Project prior to the drawdown of the main PDF.
Salt Lake Potash is rapidly developing the Lake Way Project and has made substantial construction progress over the past few months.
Significant milestones for not only the company but also for the wider SOP industry in Australia have included the completion of the first commercial-scale on-lake evaporation pond and the commencement of the evaporation process with the dewatering of the supersaturated brine from Williamson Pit.
The Stage 1 facility will enable the company to progress works into the second stage of construction being the continued expansion of the extensive on-lake evaporation pond and trench network.
Salt Lake Potash chief executive office Tony Swiericzuk said: “This is an exciting development for Salt Lake Potash and its stakeholders, providing a clear runway for the company to progress the construction of the Lake Way Project.
“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 Bankable Feasibility Study and as we continue the construction at Lake Way.
“Taurus’ commitment is a strong endorsement for the Lake Way Project and the exceptional team that has been built”