Australian Potash Limited (ASX:APC) has passed another key milestone in developing the Lake Wells Sulphate of Potash project with the WA Environmental Protection Authority (EPA) recommending to the Minister for the Environment that the project be approved for development.
In addition to the recommendation for the approval of the full project development, the conditions for the development and operations of the project have been agreed between APC and the EPA.
The decision on Monday saw shares as much as 40% higher to 16 cents, equal to a new high of almost eight years and today shares are up 8% on yesterday's close to 13.5 cents.
Managing director and chief executive officer Matt Shackleton said: “In any minerals project development, this is a seminal step and one which the APC team can be rightly proud.
“Our typically thorough approach to the approvals pathway is reflected in the very positive liaison we have enjoyed with the EPA over the past two years, and in the concise and effective list of conditions, we will adhere to through development and production.
“We are continuing discussions in the offtake program, with in excess of 75% of our forecast output already contracted under binding take or pay agreements.
"The plant EPC tender package has been issued and we are reviewing EPC bids received for several other packages.
"The formal debt due diligence process has commenced with domestic and international financing institutions now in the data room."
The front-end engineering design (FEED) program is scheduled to deliver optimised capital expenditure and operating expenditure and production models through the fourth quarter in 2020.
Six of the eight development packages of work are being tendered under an engineering, procurement and construction (EPC) contracting strategy, designed to mitigate schedule, cost and performance risk.
The formal financing due diligence process has commenced, and APC is requesting indicative terms sheets by the end of the third quarter/start of the fourth quarter in 2020.
Independent technical and marketing experts have been appointed to review the FEED outputs and prepare reports for the several domestic and international commercial financial institutions considering the opportunity.
NAIF will be conducting detailed due diligence concurrently.
APC is continuing with its discussions in the offtake program, with a particular focus on the North and South American continental markets.
While the company has in excess of 75% of its forecast output under offtake agreements, material opportunities are being presented for consideration in these lucrative SOP markets.