Salt Lake Potash (ASX: SO4) has secured offtake deals for 170,000t of its planned sulphate of potash (SoP) production from its Lake Way project in Western Australia’s northern goldfields.
The offtake agreements account for 70% the project’s planned 245,000tpa SoP production from the project.
Agreements were signed with three leading fertiliser distributors with Unifert to take 60,000tpa to sell into the Middle East and Africa.
Fertisur will purchase 60,000tpa which will be distributed in South America while Indagro will take 50,000tpa to resell into North America and Europe.
According to Salt Lake the offtake arrangements are for a minimum five-year term from the start of shipping which is scheduled for 2021.
“We are delighted to have finalised these offtakes for the sale and distribution of premium SoP product that will be produced at our Lake Way project,” Salt Lake chief executive officer Tony Swiericzuk said.
“Binding agreements with industry leaders Unifert, Indagro and Fertisur support Salt Lake’s marketing strategy of targeting geographical markets with strong growth in crops that benefit from most SoP fertilisers.”
“Salt Lake continues to progress discussions with other leading fertiliser companies for the sale of our remaining SoP production,” Mr Swiericzuk added.
The company revealed that discussions for the remaining expected production from Lake Way are “substantially advanced” and are with an additional “tier one fertiliser group”.
Lake Way SoP project
Last month, Salt Lake revealed the results of a bankable feasibility study into developing a 245,000tpa SoP operation at Lake Way.
Capital expenditure is estimated at $254 million with the project anticipated to generate annual earnings before interest tax depreciation and amortisation of $111 million.
First production is targeted for the final quarter of next year with the operation to run for 20 years.
Construction of the stage two ponds and brine extraction infrastructure is expected to begin in the current quarter.
Stage one ponds are already in commercial operation with high-grade brine from the Williamson pit.
In early morning trade, Salt Lake’s share price had lifted 5.33% to $0.79.