Australian Potash has entered into an earn-in and a joint venture (JV) with mid-tier gold producer St Barbara over the Lake Wells gold tenements in Yilgarn Craton in Western Australia.
The agreement was secured months into Australian Potash completing the definitive feasibility study (DFS) on the Lake Wells potash project. Australian Potash retains 100 per cent of all potash mineral rights at Lake Wells.
In regards to the gold project, St Barbara will pay Australian Potash $1.25 million cash and a minimum exploration expenditure of $1.75 million during the first 12 months of the earn-in.
St Barbara can earn up to 70 per cent of interest in the Lake Wells gold project after the first year by spending an additional $3.5 million on exploration over 24 months.
This is in addition to reimbursing Australian Potash for its previous gold exploration costs, amounting to $500,000.
Australian Potash managing director Matt Shackleton said, “The strategic intent of the board of Australian Potash is to focus on the completion of the definitive feasibility study into the development of the Lake Wells sulphate of potash (SOP) project.
“At the same time, however, we have always been very aware of the inherent value of the Lake Wells gold project.”
St Barbara said in an ASX statement that the investment in Australian Potash was aligned with its strategy of investing in early to advanced stage exploration. It also holds interests in Duketon Mining and Peel Mining.
Lake Wells is around 180km north-east of Laverton. Its SOP project is anticipated to produce around 150,000 tonnes per year (t/y) during stage one, which will double to 300,000t/y during stage two.