Australian Potash Ltd (ASX:APC) has started constructing the Lake Wells Village, an accommodation site at its flagship potash asset in Western Australia.
The village will provide lodging for workers across the Lake Wells Sulphate of Potash Project (LSOP), which carries the largest measured, JORC-compliant sulphate of potash resource in Australia.
In addition to accommodation construction, the company says other pre-development activities are underway across the asset with borefield development drill rigs on-site and working across the project’s western borefield.
Australian Potash has also started to mobilise a civil earthmoving fleet, with the necessary surveys to construct the initial crystalliser ponds at the potash asset now complete.
Over the course of the current quarter, Australian potash intends to:
- Continue developing the western borefield;
- Kick-off its civil earthwork program;
- Facilitate an Aboriginal business’ sandalwood clearing program and;
- Reach a documentary close on its development debt program.
Project evolving amid rising prices
Australian Potash managing director and CEO Matt Shackleton said: “We are very proud to provide shareholders with this project development update on the LSOP.
“Globally, potash prices have risen materially year-on-year, with strong premiums being paid for organic, green SOP products that we will produce at Lake Wells.
“Mirroring the significant work that went into identifying, measuring and testing Australia’s largest measured JORC-compliant SOP mineral resource estimate, we have applied the same stringent planning and design to the early works program.
“Construction camp, wet and dry mess and fresh and wastewater treatment facilities are commissioned and operational, and drill rigs are on site developing what we are referring to as the western borefield.
“The debt program is progressing quickly, and we look forward to being in a position to update shareholders on that, and provide further news on the LSOP development, over the coming weeks.”
Fresh capital supports pre-development
In late May, Australian Potash snapped up $10 million in capital to fund pre-development activities at the Lake Wells SOP asset.
Global institutional, professional and sophisticated investors chipped in to raise the $10 million at 14 cents per share.
Speaking to the raise at the time, Shackleton said: “The heavy institutional and sophisticated investor demand for the offer reflects well on the Lake Wells SOP Project'\s very robust financial metrics and supports our transition into development.”
Lake Wells' development comes as the global sulphate of potash market continues to grow. In 2016, the potash fertilisers market was valued at US$20.72 billion.
However, with a compound annual growth rate of 4.47%, calculated in 2017, the market could be worth as much as US$26.87 billion by 2022.
