Salt Lake Announces Binding Access Agreement with Blackham Resources

  • Apr 08, 2019 AEST
  • Team Kalkine
Salt Lake Announces Binding Access Agreement with Blackham Resources

Today, on 8th April 2019, Salt Lake Potash Limited (ASX: SO4) announced about the execution of a binding split commodity and access agreement with Blackham Resources Limited (ASX: BLK) in relation to the development of the Lake Way Project in-line with the previously announced terms.

The agreement states that Salt Lake will acquire Blackham Resources' brine rights and Blackham Resources will acquire gold rights to Salt Lake Potash’s Lake Way holdings. Each company will retain a royalty on their respective holdings. Salt Lake Potash will receive a 2% royalty on all gold production from the Salt Lake Potash tenements, whereas Blackham will receive a 4% royalty on all brine production (including SOP) from the Blackham tenements. Salt Lake Potash will make a rehabilitation liability payment of $500,000 to Blackham by June 30, 2019, where the payment amount would be deductible from future brine royalties.

Under the agreement, Salt Lake Potash is required to achieve the following construction and production milestones, such as completion of the de-watering of the Williamson Pit by July 31, 2019; commence the construction of the SOP processing plant by June 30, 2020; and achieve first commercial production of SOP by December 31, 2021. However, these dates can be extended over mutual understanding and agreement.

The Minister consents over Blackham granting the brine rights to Salt Lake Potash and Salt Lake Potash granting the gold rights to Blackham along with Blackham obtaining any approvals necessary to proceed with the agreement, including the release of various encumbrances relating to the brine rights must be satisfied within two months of the date of the agreement by the parties.

The Lake Way Project:

The project is a high-grade salt-lake brine Sulphate of Potash (SOP) operation and has become an important focus point for the rapid development. Its location and logistical advantages underpin it as an ideal lake for Salt Lake’s first Sulphate of Potash operation. It is less than 15 kilometer south of Wiluna, in the Northern Goldfields region of Western Australia (WA). The lake's surface area extends over 270 square kilometer. Blackham Resources (owner of the Wiluna Gold Mine) has several mining leases, which covers most of the northern end of the lake. The agreement between the two parties allows for an expedited pathway for development at Lake Way.

Under the construction update, the company has commenced the construction of the first phase of the Lake Way Evaporation Ponds at the start of March 2019. The first phase of evaporation ponds will enable the de-watering of the Williamson Pit. The construction works for the Lake Way Evaporation ponds are progressing well with Salt Lake moving into 24-hour operations and are on target for completion in Q2 2019.

On stock information, at the time of writing (on April 8, 2019, AEST: 1:50 PM) the stock of Salt Lake is trading at A$0.58, up 0.87% with a market capitalisation of ~A$118.61 million. Today, it made day’s high at A$0.58, which was also day’s low with a daily volume of more than 41,398. Its 52 weeks high stands at A$0.62 and 52 weeks low at A$0.425, with an average volume of 72,558. Its absolute return for five years, one year, and six months are 5.99%, 2.68%, and 12.75%, respectively.

Further, at the time of writing (on April 8, 2019, AEST: 1:50 PM) the stock of BLK is trading at A$0.014, down by 6.667% with a market capitalisation of ~A$20.65 million. Its 52 weeks high stands at A$0.098 and 52 weeks low at A$0.014, with an average volume of 8,021,161. Its absolute return for five years, one year, and six months are -89.15%, -83.79%, and -62.68%, respectively.


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