PRE-FEASIBILITY STUDY COMPLETED FOR MACKAY SOP PROJECT
- Pre-Feasibility Study demonstrates the potential for the Mackay Sulphate of Potash (“SOP”) Project to become a long life and low-cost supplier of SOP
- Average SOP production rate of 426,000tpa is forecast over an initial 20 year life
- First quartile total cash cost of US$222/t of SOP (FOB Wyndham)
- Annual EBITDA forecast of US$137M, totalling US$2.7B over the initial project life
- Post-tax NPV8 of US$453M and post-tax IRR of 20%, based on an average SOP price of US$555/t (FOB Wyndham)
- Capital cost of US$409M (inc. US$53M contingency) has a post-tax payback period of 4.2 years
- Integrated mine-to-ship logistics chain to be established through Western Australia
- Agrimin Board has approved the immediate progression to a Definitive Feasibility Study, submission of an EPA referral and application for a Mining Lease
- Off-take and financing discussions with various counterparties will continue while the Definitive Feasibility Study is underway
Agrimin Limited (ASX: AMN) (“Agrimin” or “the Company”) announces the results of the Pre-Feasibility Study (“PFS”) for the Mackay SOP Project which is located 785km south of the Port of Wyndham, Western Australia. The PFS was managed by Advisian, the consulting business line of WorleyParsons Group.
Mark Savich, CEO of Agrimin commented: “The PFS has highlighted the potential for the Mackay SOP Project to become the world’s largest and lowest cost supplier of seaborne SOP. In addition, the Project has the potential to be a catalyst for investment in regional infrastructure throughout central and top end of Australia, thereby creating sustainable economic opportunities for local communities.”
“Global SOP demand is experiencing rapid growth due to evolving food production practices, and Agrimin can have an important role in providing reliable seaborne supply of this high quality fertilizer.”
QUARTERLY ACTIVITIES REPORT FOR PERIOD ENDING 31 MARCH 2018
Mackay SOP Project
- Pre-Feasibility Study progressed and on track for completion in Q2-2018
- Additional long-term pump testing completed on pilot trenches
- Pilot evaporation pond construction completed
- Cash balance was $7.7 million at 31 March 2018
Agrimin Limited (ASX: AMN) (“Agrimin” or “the Company”) is pleased to report its activities for the quarter ending 31 March 2018.
Mackay SOP Project – Western Australia (100% owned)
The Mackay Sulphate of Potash (“SOP”) Project is located in Western Australia and is 100% owned by Agrimin (Figure 1).
Lake Mackay is the largest known SOP-bearing salt lake in Australia and is the low point of an enormous groundwater and surface water catchment area. Lake Mackay covers an area of approximately 3,500km2 and measures approximately 80km east-west and north-south. The salt lake is comparable in size to the two major sources of primary SOP production, being the 4,400km2 Great Salt Lake in the USA and the 5,500km2 Lop Nur (Luobupo operation) in China.
Lake Mackay’s hydrogeological setting and significant size provide important attributes that support the development of a globally significant SOP operation. The Project currently has Indicated Mineral Resources of 4.3 million tonnes and Inferred Mineral Resources of 18.9 million tonnes of SOP based on specific yield. Current Mineral Resources are hosted by a single contiguous deposit covering an on-lake area of 2,201km2 with brine commencing approximately 40cm below surface across the entire deposit area. The deepest drill hole on Lake Mackay is 30m with the deposit remaining open below this depth.
AGRIMIN LIMITED INTERIM FINANCIAL REPORT
FOR THE HALF-YEARENDED 31 DECEMBER 2017
Review of operations
Agrimin has 100% ownership of the Mackay Sulphate of Potash (“SOP”) Project located in Western Australia.
Agrimin has a strategic focus on the exploration for and development of SOP deposits. The Company is aiming to take advantage of the strong market fundamentals which are currently supportive of new SOP production. Global demand of SOP currently exceeds supply and Agrimin expects that SOP deposits throughout Western Australia will become an important source of supply to meet world demand.
Mackay SOP Project (100% Agrimin)
The Mackay SOP Project is situated in Western Australia approximately 540 kilometres north-west of Alice Springs, Northern Territory and accessed via well-maintained existing roads. The Adelaide to Darwin transcontinental railway connects Alice Springs to the north and south coasts of Australia where major shipping terminals are located.
During the half-year, the Company expanded its project area, applying for three Exploration Licences (EL’s) and two Miscellaneous Licences
(ML’s) located in Western Australia and two EL’s located in the Northern Territory.
The Mackay SOP Project now covers a total area of 4,566km² which includes an on-lake area of 3,383km2. The Company’s focus is on development studies for a 370,000 tonne per year operation contained solely in Western Australia and within the 2,384km2 area which has been cleared under a Native Title Agreement signed during the half-year.
Lake Mackay is the largest known SOP-bearing salt lake in Australia and is the low point of an enormous groundwater and surface water catchment area that is approximately 87,000km2. The lakebed itself covers an area of approximately 3,500km2 and measures approximately 100km east- west and north-south. The lakebed is comparable to the lakebed areas at two major sources of SOP production, being the 4,400km2 Great Salt Lake in the USA and the 5,500km2 Lop Nur (Luobupo operation) in China.
Lake Mackay’s hydrogeological setting and significant size provide important attributes that support the development of a salt lake operation. The Project currently has Indicated Mineral Resources of 4.3 million tonnes and Inferred Mineral Resources of 18.9 million tonnes of SOP based on specific yield. The Mineral Resources encompass an area of 2,201km2, within Agrimin’s granted tenure with brine commencing approximately
40cm below surface across the entire deposit area. The deepest hole drilled on Lake Mackay has been 30m with the deposit remaining open below this depth. The Mineral Resources do not take into account any natural recharge factor which could increase the amount of extractable resources over the life of an operation.
SOP production begins with pumping brine from trenches into a series of solar evaporation ponds. It is planned to harvest the crystallised Potassium salts from the ponds and feed them into the process plant. The planned process route is conventional and will comprise crushing, flotation, decomposition, SOP conversion, drying and sizing.
On 23 August 2016 the Company announced the Scoping Study compiled by Lycopodium Minerals Pty Ltd for the Mackay SOP Project. The
Study outputs indicate SOP production of 370,000 tonnes per year over a 20 year life, and an average total cash cost of US$256/t FOB (±35%).
Agrimin continued to focus on maximising value from the development of its 100% owned Mackay SOP Project located in Western Australia by progressing with the Pre-Feasibility Study (“PFS”) and components of a Definitive Feasibility Study (“DFS”). In July 2017, Advisian was appointed as the PFS engineer and project manager and throughout the half-year the Company’s owners team and consultants continued to progress the PFS which included the assessment of a number of production and transport scenarios. The Company elected to extend the PFS program to allow assessment of options which have the potential to materially increase production rates and lower the Project’s cash costs. The extended PFS program is planned for completion in the second quarter of 2018. Based on the Company’s project delivery timeline, the extension to the PFS will not impact the overall timeline to first production. Extension of the PFS is expected to allow a more efficient and focused approach for the DFS and the environmental assessment process.
Chairman and Non-Executive Director
Appointed: 22 April 2016
Mr Sampson is an internationally experienced business leader, director and mining professional with 30 years resources industry experience. In addition to significant project development and operating experience, he is an experienced director with listed and non-listed company and joint venture governance experience across multiple international jurisdictions. Brad has been the Managing Director of Discovery Metals Ltd and held senior management roles in resources and engineering companies including Newcrest Mining, Gold Fields, and Thiess. His experience covers the entire cycle of exploration, development, operations and closure, and includes equity and debt funding of resources projects, government relations and product marketing.
Mark Savich B Comm, GradDipMinExplGeoSc, CFA, CA, GAICD
CEO and Executive Director
Appointed: 1 December 2012
Mr Savich has over 13 years of technical and financial experience in the resources industry, dealing from early stage exploration through to production. He is skilled in project identification, technical and economic evaluation and public company management. Mr Savich holds a Bachelor of Commerce from the University of Western Australia and a Graduate Diploma in Mineral Exploration Geoscience from Curtin University. He is a CFA Charterholder, a Chartered Accountant (CA) and is a graduate member of the Australian Institute of Company Directors (GAICD).
Alec Pismiris B Comm, MAICD, AGIA
Non-Executive Director and Company Secretary
Appointed: 2 October 2013
Mr Pismiris has over 30 years of experience in the securities, finance and resources industry and is currently a director of five ASX listed companies. Since 1990 Mr Pismiris has served as a director and company secretary for various ASX listed companies as well as a number of unlisted public and private companies. Mr Pismiris completed a Bachelor of Commerce degree at the University of Western Australia, is a member of the Australian Institute of Company Directors and an associate of The Governance Institute of Australia. Mr Pismiris has participated numerous times in the processes by which boards have assessed the acquisition and financing of a diverse range of assets and has participated in and become familiar with the range of evaluation criteria used and the due diligence processes commonly adopted in the commercial assessment of corporate opportunities.
Tom Lyons B Sc (Geology)
General Manager – Exploration and Development
Appointed: 22 March 2014
Mr Lyons is a Geologist with a Bachelor of Science degree from the University of Western Australia. Mr Lyons has broad experience in a range of commodities including industrial minerals, precious and base metals and bulks. He has worked in a number of different roles throughout parts of both Australia and Europe, including having previously conducted exploration programs in the East Pilbara region of Western Australia. Mr Lyons also has experience in corporate development and financing activities.
The Mackay Sulphate of Potash (SOP) Project comprises of seven tenements covering a total area of 2,560 square kilometers. The Project covers the majority of Lake Mackay, which is a Western Australian salt lake, and contains the world’s largest known Mineral Resources of brine-hosted SOP.
The Project is situated in Western Australia approximately 540 kilometres north-west of Alice Springs, Northern Territory. The Project is accessed from Alice Springs by road. Major airline access is via daily commuter flights to the Alice Springs International Airport. The Adelaide-to-Darwin transcontinental railway also connects Alice Springs to the north and south coasts of Australia.
The Mackay SOP Project has Indicated Mineral Resources of 4.3 million tonnes and Inferred Mineral Resources of 18.9 million tonnes of SOP (based on specific yield) at a Potassium concentration of 3,603 mg/L of brine. The Mineral Resources are estimated on the basis of brine volume from surface to an average depth of only 24.7 meters.
In August 2016, Agrimin reported the results of a positive Scoping Study for the Project.
Agrimin has executed a Land Access Agreement with the Kiwirrkurra people and the Company is encouraged by the high level of support that local Aboriginal people are providing. Agrimin believes the Mackay SOP Project has the potential to lead to greatly improved community and employment opportunities for the people of local communities