Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) has entered into a binding split commodity and access agreement with Blackham Resources Ltd (ASX:BLK) in relation to the development of the Lake Way Project.
Background
Lake Way Project is a high-grade salt-lake brine sulphate of potash (SOP) operation in the northern goldfields region of Western Australia. The surface area of the Lake is over 270 square kilometres.
The northern end of the Lake is largely covered by a number of mining leases held by Blackham, the owner of the Wiluna Gold Mine.
READ: Salt Lake Potash well on track with development work at Lake Way
Under the new agreement, Salt Lake Potash will acquire Blackham’s brine rights and Blackham will acquire gold rights to Salt Lake Potash’s Lake Way holdings, with each company retaining a royalty on their respective holdings.
Lake Way tenements
The Agreement is binding on Salt Lake Potash and Blackham with the key terms including:
• Salt Lake Potash to receive a 2% royalty on all gold production from the Salt Lake Potash tenements;
• Blackham to receive a 4% royalty on all Brine production (including SOP) from the Blackham tenements;
• Salt Lake Potash to make a rehabilitation liability payment of $500,000 to Blackham by June 30, 2019. This amount is deductible from future brine royalties;
• Salt Lake Potash is required to achieve the following construction and production milestones:
- Completion of the de-watering of the Williamson Pit by July 31, 2019;
- Commence the construction of the SOP processing plant by June 30, 2020; and
- Achieve first commercial production of SOP by December 31, 2021.
READ: Salt Lake Potash begins constructing Australia’s first commercial on-lake SOP evaporation ponds
Salt Lake Potash commenced the construction of the first phase of the Lake Way evaporation ponds at the start of March 2019.
The first phase of evaporation ponds will enable the de-watering of the Williamson Pit.
Construction works for the Lake Way Evaporation ponds are progressing well with the company moving into 24-hour operations and are on target for completion in Q2 2019.
The de-watering of the Williamson Pit will commence in Q2 2019 once the first phase of the evaporation ponds is complete.
Preparation of pipeline for dewatering of the Williamson Pit brine
Onsite preparation works have commenced for de-watering activity including preparation and welding of the pipeline.