Salt Lake Potash Ltd (ASX:SO4) has signed three binding term sheets regarding the sale of premium SOP product from its Lake Way Project in Western Australia.
The deals are with three leading fertiliser distributors and cover a total volume commitment of 170,000 tonnes per annum for five years.
These offtake agreements account for nearly 70% of planned annual production – SO4’s October 2019 BFS is targeting commercial production of 245,000 tonnes per annum.
Furthermore, the company has revealed that discussions are substantially advanced with an additiona tier-one fertiliser company for the sale of additional product from Lake Way.
SO4 also continues to engage with a number of other potential customers.
Customers cover multiple geographies
SO4’s CEO Tony Swiericzuk said: “We are delighted to have finalised these offtakes for the sale and distribution of premium SOP product that will be produced at our Lake Way Project.
“Binding agreements with industry leaders, Unifert, Indagro and Fertisur support SO4’s marketing strategy of targeting geographical markets with strong growth in crops that benefit most from SOP fertilisers.
“SO4 continues to progress discussions with other leading fertiliser companies for the sale of our remaining SOP production”
Diversified marketing strategy
SO4 has implemented a diversified marketing strategy using multiple strategic counterparties to undertake sales and distribution across a mix of geographical regions.
The 170,000 tonnes is split between the three customers as follows:
- Unifert - 60,000 tonnes per annum in the Middle East and Africa;
- Indagro - 50,000 tonnes per annum in North America and Europe;
- Fertisur - 60,000 tonnes per annum in South America.
SO4 continues to work towards delivering first production from its project in the December quarter of 2020.