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Salt Lake Potash Ltd - 50 KTPA Offtake Agreement

RNS Number : 2402X
Salt Lake Potash Limited
18 December 2019
 

18 December 2019

 

AIM/ASX Code: SO4

 

 

SALT LAKE POTASH LIMITED

 

50KTPA PRODUCTION OFFTAKE SECURED WITH TIER 1 INTERNATIONAL FERTILIsER COMPANY

Salt Lake Potash Limited (SO4 or Company) is pleased to advise that it has signed a binding term sheet with HELM AG for the sale of premium Sulphate of Potash (SOP) from the Lake Way Project. HELM AG is a world leading chemical and fertiliser company providing SO4 access into major markets in key geographical regions.

HIGHLIGHTS                                                           

§ Binding term sheet signed with world leading fertiliser company with a volume commitment of 50,000t per annum for 10 years

§ SO4 has now secured 220,000t per annum of offtake representing 90% of total planned production for five and ten year terms from commencement of shipping in 2021 with take or pay arrangements on product resale

§ Final purchase agreements based on the executed term sheets are well advanced with each of the offtake couterparties

§ Binding agreements support SO4's strategy of diversifying distribution across key global premium SOP seabourne markets

TONY SWIERICZUK
SO4 Chief Executive Officer

"It is an outstanding achievement for SO4 to secure such a world class partner in HELM for the sale and distribution of premium SOP product that will be produced at our Lake Way Project. This brings our committed sales to 220ktpa representing 90% of the total planned production from Lake Way. This is a key milestone for SO4 and supports our funding and development strategy for the Lake Way Project."

OFFTAKE TERM SHEET                                             

SO4 has signed a binding agreement with one the the worlds leading independent chemicals and fertiliser companies for the sale of 50,000t per annum into key geographical markets within South East Asia and the Middle East.

HELM AG

HELM AG (HELM) is a German-based company with a history spanning over 115 years. It is a multifunctional distribution company, specialising in:

·      Fertilisers

·      Chemicals: Feedstocks and Derivatives

·      Crop Protection

·      Active Pharmaceutical Ingredients and Pharmaceuticals

Today HELM is one of the world's major independent chemicals and fertiliser marketing enterprises with more than 100 subsidiaries and sales offices in over 30 countries.  Its specific local knowledge allows access to the major markets worldwide.

Table 1: HELM Term Sheet - Key Terms

Terms


Counterparty

HELM AG

Conditions Precedent

Effective upon Lake Way Project becoming operational

Benchmark Price to be agreed

Definitive Specifications to be agreed

Product

Lake Way SOP representative of the typical values in the following specifications:

-       High grade potassium

K                    44%

K2O               53%

Cl                  <1.0%

-       Fertigation Grade - Water soluble SOP

K                    44%

K2O               53%

Cl                  <0.1%

Insolubles    <0.09%

Solubility      11.9g/100gH2O

Dissolution  >95% in 1 minute

Term

10 years from commencement of production

Territory

Asia and Middle East (specified by country)

Quantity

20% of production during ramp up and 50,000t per annum thereafter with effective take or pay arrangement on product resale

Price

Net-back price mechanism agreed

 

For further information please visit www.so4.com.au or contact:

 

Tony Swiericzuk / Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Colin Aaronson / Richard Tonthat / Ben Roberts

Grant Thornton UK LLP (Nominated Adviser)

Tel: +44 (0) 20 7383 5100

Derrick Lee / Peter Lynch

Cenkos Securities plc (Joint Broker)

Tel: +44 (0) 131 220 6939

Rupert Fane / Ernest Bell

Hannam & Partners (Joint Broker)

Tel: +44 (0) 20 7907 8500

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Appendix A - Competent Person Statement and Disclaimer

Competent Persons Statement

The information in this announcement that relates to Production Targets and Ore Reserves for Lake Way is extracted from the announcement entitled 'Outstanding Bankable Feasibility Results for Lake Way' dated 11 October 2019. This announcement is available to view on www.so4.com.au. The information in the original Announcement that related to Production Targets and Ore Reserves was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member of the Australasian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists, and Mr Robert Kinnell, who is a member of the Australasian Institute of Mining and Metallurgy and a Fellow of the Geological Society of London. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Kinnell is a full time employee of Salt Lake Potash Limited. Mr Jeuken and Mr Kinnell have sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. Salt Lake Potash Limited confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

Production Target

The Lake Way 245ktpa Production Target stated in this presentation is based on the Company's Bankable Feasibility Study as released on 11 October 2019. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in the Company's Announcement released on 11 October 2019. The Company confirms that the material assumptions underpinning the Production Target referenced in the 11 October 2019 release continue to apply and have not materially changed.

Forward Looking Statements

This announcement may include forward-looking statements. These forward-looking statements are based on Salt Lake Potash Limited'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 Salt Lake Potash Limited, which could cause actual results to differ materially from such statements. Salt Lake Potash Limited makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that 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 [email protected] or visit www.rns.com.
 
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Price: 18

Market: AIM
Market Cap: £53 m
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