Salt Lake Potash has an extensive portfolio of nine salt lakes in the Northern Goldfields of Western Australia (totaling over 4,750km2 - granted and application exploration licenses) with the objective to become a globally significant Sulphate of Potash (SOP) crop nutrient source.
The Lake Wells Project is located in the Northern Goldfields of Western Australia approximately 200 km north of Laverton. The area is well served by existing infrastructure, including the Great Central Road, the Goldfields Highway, the Goldfields Gas Pipeline and the railway sidings at Malcolm and Leonora.
Salt Lake has undertaken extensive drilling, sampling and geophysical surveys at Lake Wells since acquisition in mid-2015, to understand the geological setting and define brine resources within the Lake Wells Playa
Salt Lake completed a positive Scoping Study at Lake Wells which confirmed the potential of the Project to produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets.
Based on the positive results of the Scoping Study, the Company will commence a Pre-Feasibility Study (PFS) immediately. During the PFS phase, the Company will undertake more detailed hydrological modelling, brine extraction optimisation and further infrastructure assessment aimed at identifying opportunities to enhance the Project economics through capital and operating cost reductions.
Exploration activities including drilling, test pumping and other testwork are already underway, to upgrade the resource classification and increase the overall resource base. The targeted outcomes include an improved hydrogeological understanding of the performance of basal sand (deep bores) bores including draw down rates, productivity rates and bore positions as well as improved understanding of the potential productivity of the fractured siltstone aquifer.
The Lake Wells Mineral Resource was estimated by Groundwater Science Pty Ltd, an independent hydrogeological consultant with substantial salt lake brine expertise, and is reported in accordance with the JORC Code 2012. The resource estimate is based on 32 shallow auger holes averaging 16m deep and 27 aircore holes averaging 63m deep.
A Scoping Study (accuracy ±30%) was completed by global engineering firm, Amec Foster Wheeler, and other international experts, demonstrating excellent project fundamentals based on well-established solar evaporation and salt processing techniques. Based on the positive results of the Scoping Study, the Company has commenced a Pre-Feasibility Study (PFS). (see announcement dated 29 August 2016 for full details of the Scoping Study).
Lake Wells has the potential to be one of only five large scale salt lake SOP producers around the world and the Project’s estimated cash production costs of A$185 per tonne (Stage 2) would be amongst the lowest in the world.
The Project will produce SOP from hypersaline brine extracted from Lake Wells via trenches and a combination of shallow and deep production bores. The extracted brine will be transported to a series of solar evaporation ponds built on the Lake where selective evapo-concentration will precipitate potassium double salts in the final evaporation stage. These potassium-rich salts will be mechanically harvested and processed into SOP in a crystallisation plant. The final product will then be transported for sale to the domestic and international markets.
The Scoping Study is based on a two stage development plan for Lake Wells:
- Stage 1 is based on shallow trenching and bore production with 100% of brine feed drawn from the near surface Measured Resource.
- Stage 2 also includes pumping additional brine from the deeper Inferred Resource, to increase production to 400,000 tpa of SOP.
The Scoping Study utilises the Project’s Mineral Resource Estimate of 80-85 Mt of SOP in 9,691 GL of brine at an average of 8.7 kg/m3 of K2SO4. The Mineral Resource Estimate includes Measured and Indicated Resources of 26 Mt of SOP in the shallowest 20m of the Lake.
The Study has established the indicative costs of a two stage production operation, initially producing 200,000 tonnes per annum (tpa) and then 400,000 tpa of dried organic SOP. Stage 1 produces 200,000 tpa but includes most of the capital works required for a 400,000 tpa operation. Stage 2 will commence after initial capex is repaid by cashflow generated from the shallow Measured and Indicated Resource.
The Scoping Study results highlight the benefits of Lake Wells’ location in the Northern Goldfields, with excellent access to gas and transportation infrastructure. Total Capex of A$268 million for 400,000 tpa of SOP is amongst the lowest capital intensity of any proposed potash project worldwide.
Opportunities have been identified to further optimise capital and operating costs through equipment lease financing, further operational refinements and partnerships. The Company will also continue to investigate potential additional revenue streams for the project.
For the full Scoping Study Announcement click here