Fertiliser feedstock explorer headquartered in Australia, Parkway Minerals NL (ASX: PWN) aims to become a major supplier of fertiliser to the world’s farming community. The company’s activities are centred on the development of large greensand deposits in Perth Basin. The company has two prominent projects in Western Australia (WA), including
- The Lake Seabrook Project and
- The Dandaragan Trough Project.
Moreover, Parkway holds strategic investments in Lithium Australia NL (ASX: LIT) and Davenport Resources Limited (ASX: DAV). Recently, the company has also acquired a substantial share (98.83 per cent of the Consideration Shares) of Consolidated Potash Corporation Ltd (CPC).
Parkway recently published its annual report for the 12 months ended 30 June 2019 on the ASX. Let us take a deep dive into the company’s annual report below:
Developments in FY 2018-19
During the fiscal year 2018-19, the company observed significant developments at its fertiliser projects that are discussed below:
Dandaragan Trough Project
The Dandaragan Trough Fertiliser Project hosts one of the largest known greensand deposits of the world. Its greensand deposits contain ample potassium and phosphate resources. The project possesses well-developed infrastructure, along with access to fertiliser blending operations and the well-known agricultural industries of the nearby Wheatbelt region.
The company aims to produce phosphate and potash fertilisers and a variety of valuable by-products from the phosphate and glauconite present within the sediments of the project. A larger part of the Dandaragan Trough Project is formed by the Dinner Hill and Dambadgee potash and phosphate deposits.
Parkway has continued to focus on the advancement of the Dinner Hill and Dambadgee potash and phosphate deposits. The Dinner Hill Deposit contains an Indicated Mineral Resource of phosphate mineralisation of 160Mt at 2.45% P2O5 and 4.2% K2O and an Inferred Mineral Resource of 470Mt at 1.7% P2O5 and 4.4% K2O.
During the year, the company updated the Exploration Target for the Dambadgee project, that was between 6 billion tonnes and 8 billion tonnes at a grade of between 3.0% and 3.5% K2O and between 0.9% and 1.3% P2O5.
Parkway has examined its tenement holding in the Dandaragan Trough Project. The company has lowered certain tenements size and withdrawn from other tenements to reduce the holding costs connected with this extensive landholding. The areas affected were outside of the highly prospective Dambadgee project and the Dinner Hill resource area and were considered to be less prospective for mineralisation.
Lake Seabrook Project
The Lake Seabrook Project is wholly owned by Parkway Minerals and comprises of five exploration licences enclosing a salt lake near the Koolyanobbing iron ore mining region, spanning the Perth to Kalgoorlie railway line in Western Australia.
During the financial year, the company conducted a sampling program at the project, under which near surface brine samples were taken from shallow holes on the surface of the lake and assayed for potassium. Out of the central portion of the lake system, three samples provided impressive potassium concentrations of up to 4,209 mg/l.
Davenport Resources Limited
Parkway owns about 34 million shares of Davenport Resources Limited, which is engaged in building the largest potash inventory of Western Europe. Davenport holds potash project licences, in South Harz potash district of Germany.
Davenport owns two exploration licences – Küllstedt and Gräfentonna, and three mining licences – Mühlhausen-Nohra, Ebeleben and Ohmgebirge in central Germany. The three mining licences covering an area of 216 km2, have been purchased from the German Government within the South Harz field.
During the financial year, Davenport reported about the new JORC Inferred Resource for its Küllstedt exploration licence, that took its total inferred resource (JORC compliant) within South Harz to 5 billion metric tonnes at a grade of 10.6% K2O. The total JORC Inferred Resource includes 1.5 billion tonnes of Sylvinite at a grade of 13.1% K2O and is from Davenport’s Ebeleben and Mühlhausen-Nohra mining and Küllstedt exploration licences.
Significant Events after Fiscal Year
Parkway identified an opportunity to acquire Consolidated Potash Corporation (CPC) in August this year. The company executed a binding terms sheet to obtain 97.79 per cent in CPC, with an intention to acquire the remaining 2.21 per cent later.
The transaction to acquire CPC encompassed the following elements:
- Issue of 480 million Parkway shares
- Issue of 123 million partly paid shares
- A capital raising of $450,000
- Transfer of 10 million Davenport shares
Parkway completed the acquisition transaction after receiving overwhelming support from its shareholders in September 2019. The transaction was finalised with the issue of 98.83 per cent of the consideration shares and the appointment of two new directors to the Parkway’s board.
The acquisition provided the company with a direct access to CPC’s two highly prospective brine projects – New Mexico potash-lithium project (NMLP) and Karinga Lakes Potash Project (KLPP) – and CPC’s proprietary aMES™ brine processing technology.
Parkway acquired CPC considering the following points:
- It is aligned with the Parkway’s strategy.
- It has identified, achievable, short-term milestones.
- It has ownership of projects with several near-term opportunities.
- It fits within Parkway’s broad skill sets and investment aims.
- It can get to a positive cashflow without major dilution of existing Parkway shareholders.
Parkway recorded a rise in its total income during the fiscal year 2018-19, from $169,793 in last fiscal year to $335,231. The total comprehensive loss of the company significantly reduced from $3.64 million in the prior fiscal year to $1.98 million in the reported year.
The cash balance of the company at the end of FY2018-19 stood at $120,981.
Stock Performance: PWN traded last on 30th September 2019 at $0.005. The stock has generated a return of 25 per cent in the last three months.
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