Australian Potash Ltd (ASX:APC) has received a Ministerial Statement from the Minister for Environment, the Honourable Stephen Dawson, which has conveyed that a proposal may be implemented for the Lake Wells Sulphate of Potash (SOP) Project.
Consistent with s45(1) of the Environment Protection Act 1986, the Minister has consulted with other decision-making authorities and reached agreement that the development proposal for the LSOP may be implemented.
All decision-making authorities have been advised that they may now proceed to the issuing of the requisite, standard licenses and permits to commence development.
“Significant milestone for project development”
APC managing director and CEO Matt Shackleton said: “We are very pleased to announce the achievement of another significant milestone in the development of the Lake Wells SOP Project.
“Receiving this full environmental approval allows us to now secure the operating licenses and permits to develop the Project and proceed to development on making a final investment decision.
“Conditions agreed with the Environmental Protection Authority (EPA) and contained in the Statement allow APC to develop an environmentally sustainable Project with effectively no impact on social surrounds.”
Flora, fauna and water management plans proposed by the company were all accepted by the EPA.
Offtake finalised
In November 2020, a binding 10-year take-or-pay term sheet was signed with HELM AG (HELM) for 20,000 tonnes per annum of K-Brite sulphate of potash from Lake Wells for distribution into the US.
Pricing is based on a Net Realised Price basis, incentivising HELM to achieve the highest sales price in the market jurisdictions covered by the agreement.
All of the company’s DFS projected output of 150,000 tonnes per annum is now under offtake. During the FEED program, opportunities have been considered to optimise the SOP output profile, with the company continuing to aim for 100% of output under offtake agreement.
The company’s existing marketing program
Financing nears completion
Shackleton said: “The LSOP is now positioned with environmental approval to develop, and 100% of forecast output under binding take-or-pay agreements.
“Due diligence by lenders, including the Northern Australia Infrastructure Facility, Export Finance Australia and commercial lenders are either complete or nearing completion.
“We expect to update shareholders on the financing program over the balance of the quarter.”