Australian Potash to Produce First Field-evaporated SOP

Australian Potash’s (ASX:APC) pilot processing facility in Western Australia has received the final 3 tonnes of potassium-rich harvest salt from the Lake Wells evaporation program.

Billed as an essential milestone for the company, the newly acquired salts will be used to produce sulfate of potash (SOP) trade samples in January 2019.

The company also intends to conduct verification work for the SOP trade samples in Q1 2019 after meeting with Chinese memorandum of understanding (MOU) offtake partners in December 2018.

“We are delighted to reach this important milestone in our development plans,” Australian Potash Managing Director and CEO Matt Shackleton said in a statement on Friday (December 28).

“In January 2019, we plan to produce Australia’s first field evaporated sulphate of potash, which will be of enormous value to APC and our MOU off-take partners, as we will be able to detail the chemical composition of the SOP we can produce.”

The company already has plans laid out for 2019 at this time, including a research project collaboration with the University of Western Australia’s School of Agriculture and Environment. Set to begin in Q2 2019, the project will explore the effectiveness of SOP from Lake Wells on Western Australian soil types.

Additionally, the testing will be supported by field trials set to take place across at least five sites to examine the difference between SOP and muriate of potash (MOP). The field trials will look at the difference in yield, quality and soil biology between SOP and MOP.

Lake Wells is located in Western Australia’s Eastern Goldfields, with a 2017 scoping study showcasing a mineral resource of 14.7 million tonnes (Mt) of SOP with 12.7 Mt in the indicated category.

Over the project’s estimated 20-year mine life, the company anticipates producing 150,000 tonnes per year (tpa) of SOP in the first five years (stage 1), ramping up to 300,000 tpa from years six to 20 (stage 2).

Australian Potash currently has two offtake agreements for Lake Wells under its belt, both signed in mid-2017. The first is with Chinese fertilizer company Sino-Agri Holding Company for up to 30 percent of estimated production from stage 2 of the project, or 100,000 tpa of SOP.

The second agreement, signed less than two weeks later, is with Hubei Agricultural Means of Production Group, also for the sale of 100,000 tpa of SOP.

Australian Potash closed flat on Friday at AU$0.072.

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