Based in Western Australia (WA), Great Western Exploration Limited (ASX: GTE) owns 100% of the Lake Way Potash project, comprising an area of 415km2 including the south-eastern extension of the Lake Way Salt Lake located near Wiluna, WA. The project is situated in the vicinity of the very high-grade potash brine projects of Salt Lake Potash Limited (ASX: SO4).
Want to Know More About GTE projects, please read: Overview Of Gold And Base Metal Explorer, Great Western Exploration Limited
Advantage of Lake Way Salt Lake
The brine production from Lake Way Salt Lake is at the lower quartile of cost curves. Generally, the cost of industrial potash is bifurcated into Brine (primary) and Mannheim & MOP (Muriate of potash, also known as potassium chloride) recrystallisation production (secondary). The cost per unit of potash from brine, i.e. SOP (sulphate of potash) is cheaper than MOP. Interestingly, 50% of the potassium chloride (MOP) producers are making losses as shown below-
The GTE's potash project is expected to deliver SOP similar to SO4, since the project is in continuation with the main basal channel presenting substantial high prospective for the Company’s Lake Way potash project. The boundary of Great Western and Salt Lake Potash has resulted in a historic drilling result of ~ K205 @ 200 kg/m3, entering the company project area and suggesting a high volume of potash. Also, Bankable Feasibility Study results have demonstrated the exceptional economics for the SO4 project, adding much positivity for the Company project.
SOP Future Price
The already lower-cost project is likely to reap the further benefit and add exceptional revenues to the Company due to the anticipated surge in SOP price steadily and then drastically post 2032. Consequently, high-grade product and higher commodity prices are likely to significantly increase the profit margin of the Company in the near future.
The price forecast of SOP by SO4
It is worth mentioning that the Geoscience Australia research first discovered the project prospective for lithium brines, post which the project was acquired by GTE. The demand for lithium is likely to grow 5x the present value due to the advent of electric vehicles (EVs). The increase in EV sales is expected to correct the existing oversupply situation to undersupply sometime between 2023 and 2025. The demand for lithium is anticipated to reach around 1,400 tonnes of lithium carbonate equivalent by 2028.
Therefore, presence of the prospective commodity at the project adds massive opportunity for the Company with an expected rise in commodity prices and lower cost of production at a higher grade.
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Native Title Land Access Agreement for Lake Way Project
Lately, the Company announced to have finalised the Native Title Land Access Agreement (NTA), covering area that is the highly prospective downstream continuation of the high-grade potash basal channel. The NTA will give access to delve into the region and grow positive relationship while working with the Native Title Holders, a vital step in the direction of the commercialisation of the Lake Way Potash and Lithium Brine Project.
Do You Know Share Price GTE Surged By 33.33% Post the Announcement of NTA? Please Click to Read More
GTE Future Strategy
The company is currently focusing on continuing the assessment of VMS potential across its flagship property - Yandal West Gold project - a high-grade gold mineralisation prospect. For which, GTE has planned an aerial EM survey to identify the geophysical anomalies at the prospect to assess the base metal and gold mineralisation, before the follow-up Harris Find prospect drilling program.
Please Click Here to Read - December Quarter Update: Great Western Exploration Reports High-Grade Commodities
Stock Price Information – The GTE stock closed the day’s trade at $ 0.004 on 18 February 2020, with a market cap of $ 5.01 million. The last three-month return of the stock was noted at 14.29%.