Junior Australian potash miner Reward Minerals Ltd. reported on Nov. 16 that it has entered into an exclusivity deed with the Receivers of Kalium Lakes Ltd. relating to the potential acquisition of the Beyondie Sulfate of Potash (SOP) Project located approximately 160 kilometers southeast of Newman, Western Australia.
This will provide a period of exclusivity during which the parties have agreed that they intend to negotiate in good faith to seek to agree to the terms of a sales agreement. Reward was apparently waiting in the wings after another Australian SOP project developer, Agrimin Ltd., pulled out of a proposed deal to buy the Kalium assets in October (GM Oct. 6, p. 1).
Perth-based Reward said it has been investigating the purchase for some time. “It is rare that the opportunity exists to acquire an asset such as the Beyondie SOP Project,” said Dr. Michael Ruane, Reward’s Executive Director. “The project is well advanced in a technical sense and is a perfect fit with the Reward team skill set.”
“A further bonus of the acquisition is that with relatively minor modifications, the Beyondie operation will serve as a low-cost R&D facility required to confirm the operational parameters associated with the new Reward Process,” Ruane added. “Laboratory test work already undertaken suggests that the Beyondie feed brine responds well to the Reward Process.”
Reward estimates the previous owners have spent more than $400 million on the Beyondie Project, which resulted in its being the only producing sulfate of potash (SOP) mine in Australia. The first SOP was produced in October 2021, but numerous operational obstacles and a lack of more financing eventually put the company in receivership.
Reward paid A$250,000 for the exclusivity agreement, which will be deducted from the purchase price should a deal be completed.
In addition to the exclusivity payment, Reward, under a nonbinding term sheet that is still subject to negotiation, would pay $14.75 million cash on completion of the transfer of all shares of Kalium Lakes Infrastructure Pty Ltd. (KLI) and Kalium Lakes Potash Pty Ltd. (KLP). There is a final $5 million cash payment due by June 30, 2025.
Reward said the expected date of completion is Jan. 25, 2024, but it said this may be extended by agreement of the parties.
Reward has two other potash projects in Australia, including its flagship Kumpupintil Lake Potash (formerly called Lake Disappointment Potash Project) east of Newman in northwestern Western Australia, and the Carnarvon Potash Project north of Carnarvon in northwestern Western Australia.