A junior explorer focused on producing the fertiliser-rich product used to grow high-value crops is shoring up its pathway to market, inking a deal with the Port of Geraldton operator.
Australian Potash told shareholders on Monday it had signed a joint co-operation agreement with the Mid West Ports Authority to progress discussions to export sulphate of potash through the facility.
The announcement came after the company last month estimated it would cost $208 million to develop its flagship Lake Wells project, based 160km north-east of Laverton, in the Goldfields.
Australian Potash managing director and chief executive Matt Shackleton said the agreement was critical in the explorer’s bid to become Australia’s first SOP producer.
“This agreement allows APC to further optimise the logistics and port options for the project,” he said.
“It is the first of a number of material development and operational agreements we will finalise during the front-end engineering design study.”
Australian Potash is among explorers, alongside Kalium Lakes and Salt Lake Potash, attempting to become the country’s first SOP producer.
Last month, the Shackleton-headed company released its definitive feasibility study which reported Lake Wells could produce 150,000 tonnes of SOP annually over an initial 30-year mine life.
The study included that Lake Wells could generate annual pre-tax free cash flows of $100 million and $3.1 billion over its life.
A series of bores are planned for Lake Wells to pump hypersaline brine from an estimated 125km-long paleochannel to the surface.
It has been flagged alongside a network of unlined and lined evaporation ponds to dry the salts before using a purification plant to extract the potash.
“Our premium high-grade Sulphate of Potash Project will be a hallmark operation in commencing a new export industry for the eastern Goldfields,” Mr Shackleton said.
“We also plan to reserve a significant portion of output for the Australian market.”
Australian Potash shares closed up 4.5 per cent at 12¢ on Monday.