Junior sulfate of potash (SOP) producer Salt Lake Potash Ltd. (SO4), Perth, Western Australia, announced on Dec. 18 that it has inked a binding term sheet with Helm AG, Germany, for the sale of SOP from its Lake Way project in the Northern Goldfields Region of Western Australia.
The volume commitment under the agreement is for 50,000 mt/y for 10 years from start of production. SO4 explained that the actual volume would be 20 percent of Lake Way production during ramp-up and 50,000 mt/y thereafter, with effective take or pay arrangement on product resale.
The offtake by Helm will be sold into key geographical markets within Southeast Asia and the Middle East, with the actual countries specified under the agreement, SO4 said.
The two companies have agreed on a net-back price mechanism.
SO4 said it has now secured 220,000 mt/y of committed sales, representing 90 percent of total planned production for five- and ten-year terms from start of shipping in 2021, with take-or-pay arrangements on product resale. The SOP developer in November reported that it had signed three binding term sheets for the sale and distribution of 170,000 mt/y of SOP from its Lake Way project with Unifert for 60,000 mt/y in the Middle East and Africa; Indagro for 50,000 mt/y for North America and Europe; and Fertisur for 60,000 mt/y in South America (GM Nov. 22, p. 28).
The company revealed in October that the Bankable Feasibility Study (BFS) for the Lake Way project had moved expected SOP production to 245,000 mt/y, up from the earlier 200,000 mt/y from a previous Scoping Study (GM Oct. 11, p. 29).
SO4 this week also announced that it has completed the previously announced placement to new Australian institutional investors and existing institutional shareholders to raise A$23.0 million (approximately US$15.8 million at current exchange rates) for the ongoing development of the Lake Way project (GM Dec. 13, p. 26).