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Salt Lake Potash Ltd - Process Plant Contracts Awarded

RNS Number : 8865P
Salt Lake Potash Limited
15 June 2020
 

15 June 2020

 

AIM/ASX Code: SO4

 

 

SALT LAKE POTASH LIMITED

 

PROCESS PLANT CONTRACTS AWARDED

Salt Lake Potash Limited (SO4 or the Company) is pleased to announce that it has awarded EPC and EPCM contracts to GR Engineering Services Ltd (GRES) for construction of the Process Plant and Non-Process Infrastructure (NPI) at its Lake Way Project. These contracts combined represent more than 40% of the total project capital requirement. 

HIGHLIGHTS                                                             

§ The Engineering, Procurement and Construction (EPC) contract involves the provision of plant, labour, materials and construction services for the process plant and NPI valued at A$85m.

§ The Engineering, Procurement and Construction Management (EPCM) contract involves the provision of services for the engineering, procurement and construction management for areas of the process plant and NPI, valued at A$22m.

§ Terms and risk allocation within the contracts have been approved by the Company's debt partner.

§ Following substantial progress in detailed engineering and vendor procurement, the Project capital budget has increased marginally from A$254m to A$264m, including an unallocated A$18m contingency.

§ Bulk earthworks for the site is now complete, while major vendor procurement is 77% complete and offsite fabrication acitivites are substantially progressed.

§ Construction of the permanent 100-person village was completed in April, with an additional 160 rooms also now complete in preparation for construction ramp up.

§ The EPCM and EPC contracts are conditional on financial close and GRES continue to advance project delivery under the existing early services arrangement.

TONY SWIERICZUK, Chief Executive Officer

"We are very pleased to have executed these contracts with GRES who have been a critical contracting partner by our side throughout the design development of the Lake Way processing plant and off-lake infrastructure since early 2019. The finalisation of these major Project contracts and the substantial engineering and procurement activity to date has further de-risked the Lake Way Project execution and confidence around the capital budget."

 

PROCESS PLANT DESIGN & CAPITAL BUDGET           

The process plant has been designed by both GRES and Wood plc. It is a simple reverse flotation, conversion and re-crystalisation process utilising well-established technology.

As part of the detailed engineering undertaken since completion of the Bankable Feasibility Study (BFS) in October 2019, which now sits at over 85% complete, as well as the negotiated contract risk allocation undertaken with GRES, the Company has agreed a revised capital budget of A$264m, a A$10m increase to the published BFS capital budget. The revised A$264m budget includes an A$18m contingency allowance. 

Bulk earthworks for the process plant site are now complete, while major vendor procurement is 77% complete and offsite fabrication acitivites are substantially progressed. The Project remains on schedule for first sales in Q1, 2021.

For further information or to view a full version of this announcement, please visit www.so4.com.au or contact:

 

Tony Swiericzuk / Richard Knights

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Colin Aaronson / Richard Tonthat / Seamus Fricker

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

 

This announcement has been authorised for release by the Company's Managing Director, Mr Tony Swiericzuk.

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.

Production Target

The Lake Way 245ktpa Production Target stated in this announcement is based on the Company's Bankable Feasibility Study as released to the ASX 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 ASX 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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Quick facts: Salt Lake Potash Ltd

Price: 29.75

Market: AIM
Market Cap: £105.1 m
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