Blackham Resources has agreed to sell its Lake Way sulphate of potash (SOP) tenements and assets in Western Australia to Salt Lake Potash for $10 million in cash.
The agreement will mean Blackham cancels its brine royalty, while retaining certain gold mining rights for the tenements and Salt Lake’s neighbouring assets.
Salt Lake will gain certainty over the required timing and capital expenditure for production at Lake Way through the deal, the company reported in an ASX statement.
“This is an exceptional transaction for Salt Lake Potash that will provide significant benefits to the Lake Way project and further support the rapid progress towards first production,” Salt Lake chief executive Tony Swiericzuk said.
“The acquisition will … significantly de-risk the Lake Way project by providing ownership of tenements and further access to key infrastructure assets including water and power.”
Blackham, meanwhile, will continue its focus on unlocking the “large sulphide reserves and resources” at the Wiluna gold mine at the northern end of the lake.
Salt Lake intends to use part of the pre-strip material from Blackham’s proposed Williamson pit development at Wiluna to construct on-lake evaporation ponds, with a contribution of up to $10 million toward the performance of the pre-strip.
“We are excited to have reached agreement with Salt Lake Potash on a mutually beneficial arrangement that enables Blackham to pursue its mining plans for Williamson, whilst also enabling Salt Lake Potash to develop its Lake Way SOP project,” Blackham executive chairman Milan Jerkovic said.
The transaction will also cancel Blackham’s four per cent royalty over future brine production from Lake Way starting end of June 2020.