Beyondie BFS Improves Potash Production Rates, Ore Reserves

- September 19th, 2018

Kalium Lakes predicts commissioning and ramp up to the Western Australia-based project’s nameplate throughput will take place by 2020.

Kalium Lakes (ASX:KLL) has completed a bankable feasibility study (BFS) for its Beyondie sulfate of potash (SOP) project. The report includes an update to the asset’s ore reserves.

The BFS points to a higher production rate than expected at 164 kilotons per annum — that’s 10 percent higher than the amount shown in the project’s prefeasibility study (PFS). It also adds an extra seven years to Beyondie’s anticipated mine life compared to the PFS, putting it in excess of 30 years.

In terms of Beyondie’s ore reserves, they have grown by 90 percent, with proven and probable reserves totaling 5.14 million tonnes of SOP and 12,400 milligrams per liter of potassium sulfate. Meanwhile, its mineral resource is 19.6 million tonnes of SOP at 12,434 milligrams per liter of potassium sulfate.

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The project was also able to improve its financial outcomes through the BFS. Its pre-tax NPV stands at AU$575 million, while its IRR is 20 percent. Its average earnings before interest, tax, depreciation and amortization are AU$116 million per year, with a payback period of seven years.

Kalium’s managing director, Brett Hazelden, spoke about how the positive BFS results have helped speed up the progress of early works at the project.

“As a result of the extensive detail delivered in the BFS report, the exceptional financial outcome, and the positive engagement with financial institutions, the board has now endorsed the commencement of early works and final engineering,” Hazelden said in a statement.

“This will allow us to complete the critical path activities associated with the timely construction of the project including, most importantly, the road upgrades and accommodation facility,” he added.

The company predicts that commissioning and ramp up to the Western Australia-based project’s nameplate throughput will take place by 2020.

Kalium has collaborated with German fertilizer producer and distributor K+S (ETR:SDF) on a 10-year offtake agreement for Beyondie. The agreement will entail Kalium supplying 75,000 tonnes of SOP per year to K+S, with K+S lending expertise and technical support as part of its contribution.

Kalium’s share price closed Wednesday (September 18) at AU$0.46, up 15.19 percent year-to-date.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

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