Salt Lake Potash Ltd. said Oct. 11 that a bankable feasibility study for the Lake Way sulfate of potash project in Western Australia outlined a posttax net present value, discounted at 8%, of A$479 million, a 28% internal rate of return, and a 3.5-year payback period.
The updated study took into account a probable ore reserve of 2.4 million tonnes of contained potassium grading 6.8 kilograms per cubic meter, which supports a 20-year operation life.
Production across Lake Way's life is estimated at 245,000 tonnes per annum, a 22.5% increase over the scoping study assumption of 200,000 tonnes per annum, resulting from a revised processing methodology to include potassium chloride.
Development capital for the operation is pegged at A$254 million, including A$21 million allotted to contingency. This was adjusted to a staged approach in order to be in line with plant ramp-up schedule and steady-state production requirements.
C1 cash cost was pegged at A$302 per tonne, which Salt Lake Potash said is one of the lowest operating costs of any sulfate of potash operation globally. Steady state annual EBITDA for the operation is assumed at A$111 million.
First production at Lake Way is targeted for the fourth quarter of 2020. The Australia-listed producer has advanced development at the operation since releasing the scoping study in June, including the completion of evaporation ponds across 125 hectares filled with high-grade brine from the Williamson pit.
In July, Salt Lake acquired additional tenements for Lake Way from Blackham Resources Ltd. for A$10 million.
