Australian Potash has flagged that it will soon upgrade mineral resources and define a maiden ore reserve at its Lake Wells sulphate of potash, or “SOP”, project near Laverton, WA, following the milestone completion of final field programs.
The programs, which were carried out in support of the definitive feasibility study, includes the recent drilling and testing of two additional production wells and confirmation that the low permeability clay at the lake surface can be used to line the pre-concentration ponds.
More than 60,000m of drilling has been completed at Lake Wells to date, which is expected to facilitate the mineral resource upgrade and maiden ore reserve for the project.
Additionally, the company has carried out 305,000m of passive seismic surveys, drilled six production wells that have confirmed that the target paleochannel can flow brine above project requirements and flown magnetic data that confirmed the continuity of the paleochannel.
Australian Potash has also completed a pilot evaporation pond program that verified the accuracy of the project’s evaporation model and completed a pond construction trial with long-term seepage monitoring established.
Pilot processing has also confirmed that a high-grade SOP product with a purity of 98% can be generated from Lake Wells brines.
Managing Director Matt Shackleton said: “A seminal milestone in the Lake Wells development timeline has been achieved with the demobilisation of the last test-pumping crew from site today.”
“Final documentation of DFS findings is underway, with CAPEX modelling complete, logistics pathway finalised, and optimal energy solution and associated cost identified.”
Lake Wells is located 280km by road from bulk rail terminals near Leonora in the northern WA Goldfields region.
In March 2017, Australian Potash calculated a JORC mineral resource of 14.7 million tonnes of contained SOP, most of which is in the higher confidence indicated category.
Under the scoping study released at the same time, Lake Wells was envisaged as a two-stage project that would initially produce 150,000 tonnes of premium potash per annum for the first five years.
This would then increase to 300,000 tonnes per annum during the second stage.
Pre-production capital costs for the first stage were estimated at $175m, with $163m estimated for the second stage of project development.
At an SOP price of $795 per tonne, the project generates a life of mine annual operating pre-tax cashflow of $118m with payback of the first stage expected within just three years.
