(Alliance News) - Salt Lake Potash Ltd on Friday hailed the results from a bankable feasibility study of its Lake Way project in Australia.
Salt Lake said the sulphate of potash project will return an annual earnings before interest, taxation, depreciation and amortisation of AUD111 million, roughly GBP60.5 million. The company also forecasts an average annual post-tax cash flow of AUD78 million.
The firm noted the low costs at the project, with an expected capital requirement of approximately AUD254 million, including contingency of AUD21 million.
Salt Lake also reported a "premium product" from the asset. It praised the "very high grade" potassium product, greater than 53% potassium-oxide, and the low chloride content - less than 0.1% chlorine.
Existing mining contracts, on Lake Way tenements have given the company "an advanced permitting pathway" to allow for early development of the asset. Plant commissioning is forecast for the fourth quarter of 2020, Salt Lake said.
Chief Executive Tony Swiericzuk said: "We are extremely excited to release the Lake Way Project bankable feasibility study with such outstanding economic results. Significant work has been undertaken by the company since the Lake Way Scoping Study which has further strengthened the project fundamentals.
"The study demonstrates the ability to significantly increase the production rate and optimise development capital while maintaining our position as a low cost producer. Salt Lake has completed the first stage of on-lake construction and will continue with progressive development of remaining commercial scale evaporation ponds planned from the fourth quarter of 2019."
Shares in the company were 0.7% higher at 46.30 pence each in London on Friday morning.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
