Junior Australian potash miner Reward Minerals Ltd. has entered into a binding share sale agreement with the receivers and managers of Kalium Lakes Ltd., which is under administration, to acquire the Beyondie Sulfate of Potash (SOP) project located approximately 160 kilometers southeast of Newman, Western Australia.
The acquisition is agreed upon a debt-free basis, free of encumbrances, for a total consideration of A$20 million (approximately $13.1 million at current exchange rates), Perth-based Reward Minerals said in a Dec. 5 ASX release. This amount includes a A$250,000 exclusivity payment previously made, upfront cash consideration of A$14.75 million, and deferred cash consideration of A$5 million due by June 30, 2025.
The agreement follows the company’s exclusivity deed with Kalium and the receivers, McGrathNicol, announced on Nov. 16 (GM Nov. 17, p. 1). Reward, which apparently had been weighing a potential purchase for some time, stepped in after another Western Australian SOP project developer, Agrimin Ltd., pulled out of a proposed deal for the Kalium assets in October (GM Oct. 6, p. 1).
A key condition for the completion of the binding share sale agreement is the approval of Deeds of Company Arrangement (DOCAs) for both Kalium Lakes Infrastructure Pty Ltd. (KLI) and Kalium Lakes Potash Pty Ltd (KLP), the entities directly associated with the Beyondie SOP project and whose 100% issued share capital is being acquired.
Reward’s next steps include creditor approval of each DOCA, shareholder approval in early January 2024, and a capital raising of A$22.785 million before costs.
“Assuming that the proposed deed of company arrangement with creditors and shareholders approval and capital raising are completed, the Reward team are keen to move quickly on evaluation of the plant and flowsheet modifications and costs for potentially re-commissioning the Beyondie SOP project,” said Reward Executive Director Michael Ruane.
He added that the evaluation will also cover the incorporation of the Reward Process into the existing project layout and also SOP recovery operations at other SOP resource sites. Upon completion, Reward plans to maintain the Beyondie SOP project on care and maintenance for 12 months to focus on the assessment.
Reward has two other potash projects in Western Australia, including its flagship Kumpupintil Lake Potash (formerly called Lake Disappointment Potash Project) east of Newman, and the Carnarvon Potash Project north of Carnarvon.