Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (FRA:W1D) (OTCMKTS:WHELF) has signed an agreement with leading fertiliser company HELM AG for the sale of premium Sulphate of Potash (SOP) from the Lake Way Project.
The binding term sheet includes the sale of 50,000 tonnes of SOP annually for 10 years into key geographical markets within South East Asia and the Middle East.
It will take SO4’s annual offtake commitments to 220,000 tonnes or 90% of total planned production for five and 10-year terms from start of shipping in 2021 with take or pay arrangements on product resale.
“Key milestone” for SO4
SO4 chief executive officer Tony Swiericzuk said, “It is an outstanding achievement for SO4 to secure such a world-class partner in HELM for the sale and distribution of premium SOP product that will be produced at our Lake Way Project.
“This brings our committed sales to 220,000 tonnes per annum representing 90% of the total planned production from Lake Way.
“This is a key milestone for SO4 and supports our funding and development strategy for the Lake Way Project.”
Final purchase agreements based on the executed term sheets are well advanced with each of the offtake counterparties.
The binding agreements support SO4’s strategy of diversifying distribution across key global premium SOP seaborne markets.
German-based HELM AG is a world-leading chemical and fertiliser company providing SO4 access into major markets in key geographical regions.
HELM, which has a history spanning more than 115 years, is a multifunctional distribution company that specialises in:
- Chemicals: feedstocks and derivatives;
- Crop protection; and
- Active pharmaceutical ingredients and pharmaceuticals.
The company has in excess of 100 subsidiaries and sales offices in more than 30 countries and its specific local knowledge allows access to the major markets worldwide.
FIL lifts holding
Meanwhile, SO4’s substantial shareholder FIL Limited has increased its holding to 9.61% through a series of share purchases and placement participation.
Since August 19, 2019, FIL and its associated entities have boosted their holding from 8.5% with the addition of almost 6.06 million shares.
The share purchases range in price from 75.43 cents to 88.5 cents while the placement participation was at 70 cents.
FIL Limited now holds more than 27.8 million shares, which at the last traded price of 76 cents is valued at more than $21 million.