Junior Sulfate of Potash (SOP) producer Australian Potash Ltd. (APC), West Perth, Western Australia, said on Oct. 8 that it has entered into an earn-in and joint venture agreement with St. Barbara Ltd. (SBM), Melbourne, covering the tenure of the Lake Wells Gold Project. SMB will pay APC A$1.25 million cash consideration for entering the agreement, and a minimum exploration spend of $1.75 million during the initial 12-month earn-in period.
After the first year of the earn-in period, SBM can elect to earn a 70 percent interest in the tenements by spending a further $3.5 million over a 24-month jv period on exploration, and reimburse APC up to $500,000 in costs previously spent on exploration at Lake Wells. In total, SBM’s expenditure to earn a 70 percent stake is $7 million.
APC’s 30 percent interest will be free-carried to the completion of a bankable feasibility study, following which industry standard contribution and dilution clauses apply.
APC will retain 100 percent of all potash mineral rights. “The strategic intent of the board of APC is to focus on the completion of the definitive feasibility study into the development of the Lake Wells SOP Project,” said APC Managing Director Matt Shackleton. “At the same time, however, we have always been very aware of the inherent value of the Lake Wells Gold Project.
“We are looking forward to building our relationship with the St. Barbara team,” he added. “I am confident that we now have the right people, right companies, and right project area in place to generate some significant success at what is one of the state’s very prospective and important mineral regions.”
SBM said its deal with APC is in line with its strategy of targeted investments in early to advanced stage exploration through earn-in arrangements, jvs, or direct equity investments. This includes other Australian explorers, including Catalyst Metals Ltd., Duketon Mining Ltd., Peel Mining Ltd., and Prodigy Gold NL.
In other APC news, the company announced on Oct. 5 that it will benefit from an A$35 million planned federal and state funding for the upgrade of a 100-kilometer section of the Great Central Road between Lake Wells and Laverton. The project is to commence in January 2019 and will replace some 70 kilometers of unsealed road with high-grade sealed road.
In addition, APC and Laverton have agreed to scope the feasibility of sealing the Lake Wells access road, which would make the Lake Wells SOP Project’s logistics solution a 300-kilometer all-weather bitumen sealed road to the Leonora rail-head.