LONDON (Alliance News) - Salt Lake Potash Ltd Friday said its costs significantly increased in the first half of its financial year after it ramped up exploration work on its flagship project in Australia, and said it plans to expand the mineral resource by conducting further drilling this year.
The miner said its pretax loss widened to AUD2.2 million in the six months to the end of 2015 from the AUD395,770 loss a year earlier after ramping up its spending on exploration and evaluation work, costing AUD1.4 million compared to the AUD67,823 spent in 2014.
However, it also booked an AUD295,674 impairment against some of its exploration activities on the Golden Eagle uranium and vanadium project located within Colorado in the US, and also saw administrative expenses and business development costs increase.
Salt Lake said it fully impaired the asset because it is not viable to carry out any further work on the project due to the current economic conditions and the price of uranium.
The company is primarily focused on its Lake Wells project in Western Australia, where it is aiming to exploit and grow the 29.0 million tonnes of sulphate of potash to sell to the domestic and international fertiliser markets.
Salt Lake secured its maiden resource for the project in 2015, and the company plans to drill further to expand the resource further in 2016.
Salt Lake plans to conduct laboratory and field evaporation trials on bulk brine samples to define the evaporation patterns, estimate the salting points of mixed salts and predict the conditions for production of schoenite salt, which it said was a key step in the production of sulphate of potash.
The drilling in 2016 will aim to improve the geological and hydrological model at the Lake Wells project, including pump testing of three aquifer units and measuring the hydraulic properties, such as flow rates and transmissivity, of the aquifers hosting the brine, it said.
A scoping study can then be undertaken allowing the mineral resource to be upgraded. Salt Lake is hoping to potentially increase the resource from the current 29 million tonnes to around 80 to 85 million tonnes.
Salt Lake shares were down 1.3% to 18.76 pence per share on Friday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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