Kalium Lakes will advance the Beyondie sulphate of potash project (BSOPP) in Western Australia through to first production by raising fresh working capital.
All proceeds of the $61 million raising will be used to fund the construction of the project, with major shareholder Greenstone Resources already committed to purchasing approximately $12 million of Kalium Lakes shares.
Kalium Lakes identified an overrun of capital costs due to the complication of setting up operations for a brand-new industry in Australia.
This is mainly due to weather impacts, including two cyclones and design changes on the processing plant and the product storage and treatment infrastructure.
Kalium, therefore, underestimated the complexity of taking a German-based design and building it in harsh Western Australian desert conditions.
“Commencing a new Australian industry and being a first mover in sulphate of potash (SOP) has presented some development challenges,” Kalium Lakes managing director Brett Hazelden said.
“Despite the capital cost overrun, the project still remains a financially attractive, long life, low operating cost and high margin business once it commences steady state operations.
“Importantly, our revised capital budget has been verified by independent engineering specialists who have reviewed the project and we are confident that the offer will fund us through to completion of construction of the BSOPP and through to first production.”
The Beyondie project is now 40 per cent complete, with Kalium Lakes having completed approximately $100 million worth of works.
This includes the installation of all brine production bores and freshwater bores, 23,000 tonnes of SOP being pumped into evaporation ponds, placement of high-density polyethylene (HDPE) pipelines and completion of 10-mile trenches and two pump stations.
Works relating to non-process infrastructure is also nearing completion, with the gas pipeline awaiting installation.
Kalium Lakes expects to deliver first production at Beyondie in the third quarter of next year. Its ore reserve life is estimated at 30-plus years.