Reward Minerals has entered into an exclusivity deed with Kalium Lakes to acquire the Beyondie sulphate of potash (SOP) project.
The Beyondie project is located 160km south-east of Newman in Western Australia.
In mid-2016, Kalium Lakes raised over $450 million in debt and equity funding to acquire and develop the Beyondie project, and in October 2021 the first SOP production was achieved.
However, numerous operational obstacles resulted in substantial cost over runs and eventually the operations being shut down. In August 2022, the project required a debt restructure.
Now, Reward Minerals is set to revitalise the project by paying $14.75 million in cash, a final payment of $5 million by June 30 2025, and an exclusivity payment of $250,000.
“It is rare that the opportunity exists to acquire an asset such as the Beyondie SOP project. The project is well advanced in a technical sense and is a perfect fit with the Reward team skill set,” Reward Minerals’ executive director Michael Ruane said.
If the acquisition is made official, Reward Minerals will acquire a fully constructed and permitted SOP trench and brine field, fresh water bore field, evaporation ponds and processing operations, and a 7.5-megawatt power station.
It will also receive many granted mining, miscellaneous licences and exploration tenements that cover an area of about 1800 square kilometres.
Reward Minerals said that SOP’s market outlook remains attractive and driven by factors including population growth, restricted supply, low-chloride fertilizer demand and increased usage for higher value crops driving strong prices expected to continue in upcoming years.
“A further bonus of the acquisition is that with relatively minor modifications, the Beyondie operation will serve as a low-cost research and development facility required to confirm the operational parameters associated with the new Reward process,” Ruane said.
“Laboratory testwork already undertaken suggests that the Beyondie feed brine responds well to the Reward process.”
The proposed transaction is expected to be completed by January 25 2024.