In an unlikely pairing, gold producer Blackham Resources (ASX: BLK) has executed a deal with advanced potash explorer Salt Lake Potash (ASX: SO4) to investigate developing a sulphate of potash operation on Blackham’s gold landholding.
Salt Lake Potash owns about 290 square kilometres of tenements in the region which make up its Goldfields Salt Lakes project.
According to Salt Lake Potash, its tenements lie over the Lake Way Paleochannel and Blackham Resources’ 64sq km of landholding is situated at the paleochannel’s northern end.
Blackham Resources’ gold tenements also surround a historical potash mine that produced 25kg per cubic metres sulphate of potash.
The agreement between the parties allows Salt Lake Potash to acquire the brine rights to Blackham Resources’ project area, while Blackham will receive the gold rights to Salt Lake’s tenements.
Should an operation be developed on each other’s land, the landholder will receive a royalty.
As part of the agreement, the parties will also share data and facilitate activities on each other’s tenements.
Salt Lake Potash plans to evaluate the potential of establishing a 50,000 tonne per annum demonstration plant on Blackham Resources’ mining licences, which have most requisite approvals in place. The company will sole fund this investigation and any future development costs.
“We are pleased to reach this agreement with Blackham Resources, which could potentially bring very substantial benefit to both companies and add significant value from mineral rights to which neither company ascribed value as a standalone,” Salt Lake chief executive officer Matt Syme stated.
He said Blackham Resources’ land was an “ideal site” for its sulphate of potash demonstration plant and expansions.
The parties will also look at sharing existing infrastructure from Blackham Resources’ Wiluna-Matilda gold operations including accommodation, flights, power and maintenance costs.
Salt Lake Potash highlighted other advantages to the deal included a nearby infrastructure in the form of a highway for freight and the goldfields gas pipeline for power.
“We expect it would result in material time and cost savings for us and bring significant benefits to the Wiluna community,” Mr Syme said.
“It appears to have the best combination in Australia of scale, brine chemistry, permitting and infrastructure access and justifies the effort to prove its potential,” he added.
Salt Lake Potash plans to evaluate this opportunity while continuing with its Lake Wells activities including progressing its mining lease application.
A scoping study into the installing the demonstration plant on Blackham Resources’ tenement is scheduled to finish mid-year, with preliminary sampling already completed.
Where the historic operation existed on Blackham Resources’ tenure, the Williamson pit was filled with brine. Salt Lake’s initial plan is to dewater the pit and use the brine as a starter feed for its evaporation ponds.
The market responded positively to the news with Salt Lake Potash’s share price rising almost 6% to A$0.535 by late afternoon trade. Blackham Resources’ stock price remained unchanged at A$0.081.