Australian Potash Ltd (ASX:APC) has received firm commitments from global institutional, professional and sophisticated investors for a $10 million placement at 14 cents per share.
The funds raised from the placement will be applied towards pre-development activities at the Lake Wells SOP (sulphate of potash) project in advance of a Final Investment Decision, including:
Drilling of paleochannel production wells including fit-out of headworks and brine pipeline;
Commencement of early works for the Lake Wells Village including in-ground services, water treatment plant and power supply; and
Finalising the syndicated debt facility with the commercial bank ‘club’ which is in addition to the existing undrawn debt facilities.
The company has also scheduled to commence a maiden diamond drill hole (DDH) program in May across the Laverton Downs nickel sulphide target areas following identification of strong EM conductor plates.
Transition into development
Australian Potash managing director and CEO Matt Shackleton said: “The heavy institutional and sophisticated investor demand for the offer reflects well on the Lake Wells SOP Projects very robust financial metrics, and supports our transition into development.
“The LSOP still carries the largest 100% Measured JORC compliant SOP resource across the space, which speaks to the technically de-risked nature of the development.
“With over 75% by value of construction contracts to be executed under an EPC strategy, long tenor debt that includes NAIF and Export Finance Australia and 100% bore-field brine abstraction, APC’s development strategy provides a clear path to successful operations.
“In addition to the LSOP, we look forward to unlocking the inherent value in the Laverton Downs nickel sulphide targets with a maiden diamond program scheduled to commence in May.”