Australian Potash Limited (ASX:APC) has welcomed the completion by St Barbara Ltd (ASX:SBM) of expenditure under the first earn-in period for Lake Wells Gold Project Earn-In and Joint Venture Agreement.
The mid-tier gold producer has spent $1.75 million under the first earn-in period and has also agreed to reimburse Australian Potash $318,000 for previously incurred gold exploration expenditure.
St Barbara will now proceed to the second earn-in period which requires the expenditure of an additional $3.5 million to earn a 70% interest.
Partnering with a mid-tier company to unlock value
APC's managing director and CEO Matt Shackleton said: “Our strategic intent for the Lake Wells Gold Project was to partner with a capable and proven mid-tier gold company to help unlock the inherent value we believe this package of ground holds.
“In St Barbara, we have that partner and progressing to the second earn-In period increases our confidence that future exploration success could add significant value to APC and its flagship Lake Wells Sulphate of Potash Project.”
In October 2018, Australian Potash and St Barbara entered into an earn-in and joint venture agreement over the Lake Wells Gold Project.
Under the terms of the agreement, St Barbara has the right to earn up to a 70% participating interest in the gold project through the expenditure of $1.75 million in the first period and $3.5 million in the second earn-in period.
APC holds a 100% interest in the Lake Wells SOP Project around 500 kilometres northeast of Kalgoorlie, in Western Australia's Eastern Goldfields.
Following the release of a definitive feasibility study (DFS) in August 2019, Australian Potash is focused on the 6-month FEED study, finalising offtake discussions and securing financing to develop the Lake Wells SOP Project.
The DFS was underpinned by extensive and rigorous test work, data, and modelling and confirmed that the project will be a long-life, low-capital and high-margin SOP producer.