Kalium Lakes Boosts Beyondie SOP Resource by 150 Percent

- September 4th, 2018

A prefeasibility study for Beyondie shows the Western Australian project has the ability to produce up to 150,000 tonnes of SOP annually.

Australia’s Kalium Lakes (ASX:KLL) delivered a 150-percent increase in the measured and indicated resources for its Beyondie sulfate of potash (SOP) project on Tuesday (September 4). 

The company sees the rise as “significant” and says it came after analysis of information gathered as part of its ongoing hydrogeological data collection program.

“The additional hydrogeological data, collected during this year for the BSOPP, has resulted in a considerable increase to Kalium Lakes’ Measured and Indicated Resource classifications,” said Brett Hazelden, managing director at Kalium Lakes.

Beyondie’s measured resource now stands at 1.72 million tonnes at 11,488 mg/L SOP, while its indicated resource is 9.17 million tonnes at 12,459 mg/L SOP. Meanwhile, its inferred resource clocks in at 7.79 million tonnes at 12,663 mg/L SOP.

Kalium Lakes says that exploration has been taking place at Beyondie since 2015, and notes that the new resource considers all activity to date. Located in Western Australia, the asset is made up of 15 granted exploration licenses and a miscellaneous license, and it covers about 2,400 square kilometers.

A prefeasibility study for Beyondie was completed last October, outlining a base case of 150,000 tonnes per year of SOP, with the option to ramp up from 75,000 tonnes to the 150,000-tonne level.

In June, Kalium Lakes signed a 10-year offtake agreement with German fertilizer producer and distributor K+S (ETR:SDF) for 75,000 tonnes per year of SOP from Beyondie. The deal will also see the company receive expertise and technical support from K+S.

Under that base-case scenario Beyondie’s pre-tax NPV stands at AU$388 million, while its IRR comes in at 28.7 percent. Its payback period is pegged at 3.7 years, while life-of-mine free cashflow is set at over AU$1 billion based on an initial 21-year mine life and a SOP sales price of US$500 per tonne.

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The company is currently working on a bankable feasibility study (BFS) for Beyondie, with completion due later this month. According to Hazelden, the updated resource should lead to “a substantial increase in Ore Reserves,” with an update on that also scheduled to arrive later this month.

He added, “[i]t is also likely that we will be able to increase the mine life which will, in turn, generate additional opportunities to increase our production rates.”

SOP is one of the most common potash fertilizers, and is considered premium quality. It contains potassium and sulfur, two key nutrients for growing crops, and is most often used on high-value crops like fruits, vegetables, nuts, tea, coffee and tobacco.

Kalium Lakes’ share price increased moderately on Tuesday, closing the day up 2.2 percent at AU$0.465.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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