Australian Potash Ltd. entered into an earn-in and joint venture deal with St Barbara Ltd. over the Lake Wells gold project in Western Australia.
Australian Potash will retain 100% of all potash mineral rights at Lake Wells, it said Oct. 8.
Under the deal, St Barbara will pay A$1.3 million in cash, and spend at least about A$1.8 million on the project during an initial 12 month earn-in period.
Following the first-year earn-in, the company can elect to earn a 70% interest in the tenements by spending a further A$3.5 million over a 24-month joint venture period on exploration. It will also reimburse Australian Potash up to A$500,000 in costs previously spent on exploration.
The company's strategic focus will remain the completion of the definitive feasibility study for the development of the Lake Wells potash project, said Australian Potash Managing Director Matt Shackleton.
Meanwhile, Australian Potash's 30% interest will be free-carried to the completion of a bankable feasibility study at the project, following which industry standard contribution and dilution clauses apply.
In mid-September, Australian Potash struck a deal with and Salt Lake Potash Ltd. to conduct a study on the potential benefits of sharing costs at Lake Wells.