Australian Potash Ltd (ASX:APC) has awarded the production bore-field drilling contract for the development of Lake Wells Sulphate of Potash Project (LSOP) near Laverton in Western Australia.
This key contract has been awarded to Pentium Hydro Pty Ltd, a wholly-owned subsidiary of Vysarn Limited (ASX:VSY).
APC’s recently completed FEED program into the development of the LSOP identified an optimised bore-field design comprising 79 brine bores.
In addition to the brine bore field, this FEED program identified the development of two raw (or fresh) water bore fields comprising approximately 13 bores.
“Maintaining momentum”
Australian Potash managing director and CEO Matt Shackleton said: “Following the release of the FEED Summary results we are focused on maintaining the momentum towards development.
“Securing drill rigs in the current climate is an important step towards us achieving our mid-2023 targeted production start date.”
Contract details
Key details of the contract with Pentium Hydro are:
- The Scope of Work as defined under the contract is the drilling, installation and development of brine bores and process water bores across Australian Potash’s LSOP;
- Revenue is based on a fixed shift rate for the duration of the contract;
- Total revenue based on the number of boreholes to be drilled as advised by APC, with two rigs completing the Scope of Work is estimated to be approximately $13 million (including consumables) over a 12-month period;
- Estimated delivery timetable of 13 months from receipt of Notice to Proceed; and
- Estimated contract completion date of May 1, 2022.