Australian Potash hits thickest basal sand intersection to date at Lake Wells sulphate of potash project

Exploration company Australian Potash (ASX: APC) has inched closer to defining a JORC reserve estimate for its Lake Wells sulphate of potash (SOP) project in Western Australia, making its thickest intersection of basal sands to date while drilling two production bores at the site.

The company confirmed this week it had hit the wide, high-yielding intersection and encountered indicative flow rates above project requirements of 15 litres per second during a production well development program which forms the last schedule of work for reserve estimate preparation and a definitive feasibility study.

The second bore was developed through 62m of basal sands in a deep palaeochannel and has been cased at 175.5m, making it the deepest production well developed to date at Lake Wells.

The palaeochannel is almost four times deeper than the company’s peer projects and is expected to make the estimation of reserves and abstraction of brine easier.

Definitive feasibility study

Five production wells have so far been installed at the project and approximately 30% of the stage one borefield will be production-ready when the definitive feasibility study is released later this year.

Once developed, Lake Wells is expected to be serviced by 35 bores enabling the Stage 1 production of 150,000 tonnes per annum of SOP, scaling up to 75 bores for production of 300,000tpa of SOP during stage two.

Managing director Matt Shackleton said the wells will form an integral part of the project’s definitive feasibility study.

“Central to the final field program at Lake Wells is the push to a JORC reserve estimate, and we are focused on building on an extensive database of test work from more than 50,000m of drilling already achieved for the existing mineral resource estimate,” he said.

“Developing these two additional production wells, test-pumping them, and collecting bed-rock core for analysis are critical factors which will feed into the calculation of an ore reserve estimate for Lake Wells.”

He said diamond drilling to recover basement core rock for permeability testing had also been completed.

Pond construction

Australian Potash recently commenced activities to assess the optimal commercial-scale construction technique for evaporation ponds at Lake Wells.

The company is planning to use unlined ponds on the playa lake, taking advantage of a surface clay layer to seal the base of the ponds.

It will conduct an economical and technical assessment of four different wall construction techniques to seal the walls and create a strong pond wall barrier to minimise lateral seepage.

“Our extensive geotechnical field and test work has confirmed the existence of a uniform, flat-lying layer of low permeability clay at the lake surface which will accommodate ‘on-playa’ evaporation ponds which eliminate the significant capital expenditure involved in lining,” Mr Shackleton said.

“The final geotechnical field trials will allow us to establish the optimal commercial-scale pond design in terms of cost of construction and effectiveness of the plan.”

Construction of the trial ponds is scheduled for completion this month, after which they will be filled with brine and have their seepage performance monitored.

The design information will feed into the definitive feasibility study.

By late afternoon trade, shares in Australian Potash were up 20% to $0.102.