Salt Lake Potash (AIM:SO4 ) has successfully raised up to A$52.0 million to enable the first drawdown of $105m under the Taurus Mining Finance Fund No2 LP and the Clean Energy Finance Corporation (CEFC) $138m Syndicated Facility Agreement.

Investors and directors will subscribe for 130 million new ordinary shares at A$0.40 each to raise up to A$52m, including 5 million shares to directors subject to shareholder approval.

Investors will recall SO4 executed the $138m Syndicated Facility Agreement (“SFA”) with Taurus Mining Finance Fund No.2 L.P (Taurus) and the Clean Energy Finance Corporation (CEFC) in August 2020.

The lending group has now confirmed that all conditions precedent to first drawdown under the SFA have been either satisfied or waived, save for the completion of an equity raise of at least A$30m, a transfer of US$8m into the Debt Service Reserve Account, payment of transaction fees and repayment of the existing US$45m bridge loan (Remaining Conditions). 

SO4 also plans to undertake a non-underwritten Share Purchase Plan (“SPP”) to raise up to a further A$5 million from eligible shareholders at an issue price of A$0.40 per new share.

The proceeds and SPP will be used to cash back a bank guarantee for the APA gas pipeline (A$18m), cover variations to ramp up vs. bank model (A$15m), to offset recent AUD strength (A$10m), transaction fees (A$2m) and up to A$12m for additional working capital.

The Lake Way Project remains on track for first sulphate of potash production in March 2021 and first SOP sales in April, with the project capital budget unchanged at A$264m.

"SO4 is pleased to have completed this placement of up to A$52m to enable financial close on the US$138m Taurus/CEFC debt facility. In combination, these funds will ensure the Company is well financed to deliver the Lake Way Project,” said CEO, Tony Swiericzuk. 

He added, “I would like to extend my sincere thanks to our shareholders for their continued support of the project, SO4 and the development of a new export industry for Australia."

Shares in Salt Lake Potash reacted positively to the announcement opening some 5.09% higher this morning at 23.75p sustaining a share price that is almost 30% above its value during April 2020.

Reasons to Follow SO4

Dual-listed Salt Lake Potash operates as a mineral exploration company in Australia and the company plans to build the most sustainable, most rewarding fertiliser project in the world.

The Lake Way Project remains on schedule for first SOP production in March 2021 and first SOP sales in April 2021. The project capital budget remains unchanged at A$264m and the overall project was 77% complete on a value earned basis as at 30 November 2020.

Key project workstreams continue to progress with engineering now 99% complete, plant and non-process infrastructure contract awards 99% committed, structural steel 65% complete and the APA gas pipeline now 25% complete.

Last month, SO4 commenced harvesting first plant feed salts from the Train 1 pond network in preparation for plant commissioning, which is expected to commence in February 2021.

Western Australian farming publication, Farm Weekly said potassium-rich brine processors, SO4 and the other WA companies will be among the world's lowest cost SoP producers. 

It outlined that the company’s cash production cost per tonne is expected to be US$205 at an annual production rate from the end of next year of 245,000 tonnes per annum (tpa). 

There is no current SOP local production in Australia, and so SOP projects like Lake Way will enable the country to transition from a net importer of potassium fertilisers to an exporter.   

Follow News & Updates from Salt Lake Potash here: