TIDMSO4
RNS Number : 8809G
Salt Lake Potash Limited
29 July 2021
29 July 2021 AIM/ASX Code: SO4
SALT LAKE POTASH LIMITED
-------------------------
Lake Way Project & Financing Update
AIM and ASX suspension update
Salt Lake Potash Limited (SO4 or the Company) advises of a
project update for the Lake Way project near Wiluna, Western
Australia.
The Company will be implementing a revised ramp up strategy that
involves suspending the initial plant feed programme following the
processing of the first 90-110kt of harvest salts, to enable more
salts to precipitate before commencing continuous harvesting
activities.
As a result of the revised pond ramp-up schedule and associated
delayed plant feed salt availability, forecasted SOP production for
FY'22 has been reduced and the Company will require further funding
before the end of 2021 to continue operations at Lake Way.
Discussions to resolve the funding shortfall have commenced and
once complete and agreed, will be announced to the market.
The reduction in plant feed salt availability is expected to
reduce primary SOP production in FY'22 from 165-185kt to 85-105kt.
This is the result of three factors:
-- A change in operating methodology for the ramp up period of
the pond system has been implemented to manage salt grade
variability in the harvest cells.
-- A reduction in the estimation of available plant feed salt
within harvest ponds following bulk sampling.
-- The re-classification of lower grade inventories that have
now been determined as unsuitable for plant feed during the ramp-up
period.
There is no anticipated impact on production levels in FY'23 and
beyond, with full production run-rate from primary salts still
anticipated in the June 2022 quarter.
Further information about the revised ramp-up strategy is set
out below.
Suspension on AIM and ASX
SO4's ordinary securities will remain suspended on ASX pending
an update on its Lake Way project funding that is anticipated to
occur no later than 16 August 2021. Following publication of this
announcement, it is anticipated that trading of the Company's
securities on AIM will be restored later today, 29 July 2021.
Tony Swiericzuk Chief Executive Officer
"The entire SO4 team is committed to the success of the Lake Way
project and has been working tirelessly through the harvest salt
pond management system and plant commissioning challenges over the
last few weeks. We are disappointed these challenges have pushed
out our expected ramp up profile however the project fundamentals
remain attractive. I am grateful for the support and patience of
our shareholders and our lenders as we work towards delivering
first SOP and positive cash flow."
For further information please visit www.so4.com.au or
contact:
Tony Swiericzuk / Richard Knights Salt Lake Potash Limited Tel: +61 8 6559 5800
Colin Aaronson / Lukas Girzadas Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Derrick Lee / Peter Lynch Cenkos Securities plc (Broker) Tel: +44 (0) 131 220 6939
This announcement has been authorised for release by the Board
of Directors.
Revised ramp-up strategy
Under the revised ramp-up strategy the Company plans to process
90-110kt of plant feed salts to produce SOP for initial customer
sales. Plant feed will then be suspended for a period of 10-14
weeks before harvesting activities and SOP production recommence.
As a result, FY'22 forecast SOP production has reduced from
165-185kt to 85-105kt.
The revised mine plan is a result of three factors.
A change in operating methodology for the ramp up period of the
pond system has been implemented to manage salt grade variability
in the harvest cells, reducing SOP production by c.63kt in FY'22:
Ramp up of the ponds has followed the original modelling and expert
advice, applying a continuous flow model that has resulted in brine
with concentrations of less than 3.4%Mg (the concentration at which
potassium salts begin to precipitate), being pumped into the
harvest cells. As a result, salt formation in several harvest cells
has exhibited higher grade variability than modelled, resulting in
a lower average potassium and higher halite content. To rectify
this issue the Company has adopted a revised operating methodology
for the continued ramp up of the pond system that suspends brine
transfer into all harvest cells until the chemistry reaches the
required level, to minimise salt grade variability.
Reduction in the estimation of available plant feed salt
inventory, reducing SOP production by c.12kt in FY'22: The
reduction in estimated plant feed salt inventory is based on the
change between the Mine Plan Inventory Model used for the previous
mine plan, and newly acquired data from bulk sampling taken during
and after harvesting activities in June. Prior to the opportunity
to undertake bulk sampling arising from cell harvesting, only
multiple single point data collection had been taken from across
the cells.
The deferment and sterilisation of lower grade inventories
determined as unsuitable for plant feed during ramp up, reducing
SOP production by c.7kt of SOP in FY'22. As part of the plant
modelling that was undertaken from bulk sampling results in June,
the lower potassium grade threshold has been increased for the
plant ramp-up period. As a result some material was sterilised (not
to be used) and other deferred with the intention of being fed
through the plant at a later date, once in steady state.
Process Plant commissioning continues
Construction and practical completion of the Lake Way process
plant has been finalised with GR Engineering Services handing over
the plant to SO4 in late June. Each of the 34 process units in the
plant have been individually commissioned and the SO4 operations
team is now working through the 'Stage 4' load commissioning
process.
The SO4 operations team, in conjunction with consultants from
the plant designer and component manufacturers have been
systematically working through the plant to ensure each unit is
working within design parameters and the plant chemistry is
established.
COVID-related border restrictions have also impacted the travel
arrangements of key commissioning personnel as well as affecting
the timely transport of certain commissioning supply items,
impacting the commissioning schedule.
The commissioning process has involved calibrating and fine
tuning several mechanical components in the plant including
crushers, screens, cyclones, thickeners, centrifuges, control
valves, agitators and pumps as well as the electronic control
systems. More recently work has focussed on the calibration of the
flotation circuit to achieve the designed waste mass pull. 'Batch
trials' each using 500-800t of low-grade feed salt have been run,
with mass-pull performance achieving variable results. The company
continues to work with the flotation circuit vendor and design
engineer to bring performance up to modelled targets and expects
the issue to be resolved this quarter.
Financing
As a result of the revised pond ramp-up schedule and associated
delayed plant feed salt availability, forecasted SOP production for
FY'22 has been reduced. The Company will require further funding to
continue operations at Lake Way before the end of 2021. Discussions
to resolve the funding shortfall have commenced and once complete
and agreed, the market will be updated.
Additional Disclosures
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (withdrawal) Act 2018 . Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Forward Looking Statements
This announcement includes forward-looking statements. These
forward-looking statements are based on the Company's expectations
and beliefs concerning future events. Forward-looking statements
are necessarily subject to risks, uncertainties and other factors,
many of which are outside the control of the Company, which could
cause actual results to differ materially from such statements.
Although the Company believes that its forward-looking statements
have reasonable grounds, can give no assurance that they will be
achieved. They may be affected by a variety of variables and
changes in underlying assumptions that are subject to risk factors
associated with the nature of the Company's business (including
those described in pages 25 to 29 (inclusive) of the Presentation
released to ASX on 11 December 2020), which cause actual results to
differ materially from those expressed herein. The Company makes no
undertaking to subsequently update or revise the forward-looking
statements made in this announcement, save where required by law or
regulation, to reflect the circumstances or events after the date
of this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCEADXNADNFEEA
(END) Dow Jones Newswires
July 29, 2021 02:00 ET (06:00 GMT)
Salt Lake Potash (LSE:SO4)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Salt Lake Potash (LSE:SO4)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
