Kalium Lakes Completed Feasibility Study Positive

Kalium Lakes (ASX:KLL) has announced the the completion of the definitive feasibility study (BFS) including an updated ore reserve for the 100 percent owned Beyondie sulphate of potash project in Western Australia.

Kalium Lakes is an Australian focused potash producer.

As quoted from the press release:

Highlights

• Robust, Bankable Project: BFS confirms that Kalium Lakes’ 100 percent owned, Beyondie sulphate of potash project (BSOPP), is technically and financially robust, with production anticipated in 2020.

90 percent increase in ore reserves: Based solely within the Stage 1 Approval Footprint which represents less than a quarter of total lake surface area within the tenement package 1:
Proved Reserve of 1.65 Mt @ 13,830 mg/l SOP at a cut-off grade of 2,500mg/l K
Probable Reserve of 3.49 Mt @ 11,820 mg/l SOP at a cut-off grade of 2,500mg/l K
Measured Resource of 1.72 Mt @ 11,488 mg/l SOP
Indicated Resource of 9.17 Mt @ 12,459 mg/l SOP
Inferred Resource of 8.75 Mt @ 12,593 mg/l SOP

• Increased Production Rates: The base case outcome of the BFS for the Beyondie SOP project is a 164ktpa SOP operation. This is an increase of 10 percent on the pre-feasibility study (PFS) based on (amongst other matters) an update to the Company’s increased Ore Reserve, detailed brine extraction modelling, pilot scale pond and processing outcomes.

After taking into consideration operational, SOP market and financing risk management perspectives, the Company has confirmed a phased ramp-up development scenario, starting with a commercial demonstration scale 82ktpa SOP operation, before
ramping up to a 164ktpa full scale SOP production facility.

• Extended Mine Life In Excess of 30 years 2
  Based on production of 164ktpa SOP, the extended
  mine life represents an increase of 7 years on the PFS estimated mine life. The Economic Evaluation
  excludes any production post 30 years from the Base Case Mine Plan.
• Improved Financial Outcomes for the Base Case:
  Pre-tax NPV8 AU$575M, IRR of 20 percent
  Average EBITDA of AU$116Mpa, EBITDA margin of 61 percent
  A payback period of 7 years and Life of Mine (LOM) 30 years
  Free cash flows of more than +AU$2 billion
  Based on CRU forecast US$606/t nominal average LOM SOP @ $AU/$US exchange rate of 0.73.

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