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Kalium targets expansion following first production

Potash Mining

Kalium Lakes has raised $50 million to increase the output of the Beyondie sulphate of potash (SOP) project in Western Australia from 90,000 to 120,000 tonnes per annum.

The two-tranche placement includes an offer price of $0.18 per share, which is an 18.2 per cent discount from Kalium’s closing price at $0.22 per share on Monday.

The first tranche raised $37.8 million, and the second tranche will raise $12.2 million if it is approved by shareholders at Kalium’s annual general meeting in late November 2021.

Kalium produced the first SOP in Australia at Beyondie in early October with the raising to assist the $45.3 million in capital costs to boost production.

The raising will also provide additional working capital during the project’s ramp up to the initial 90,000-tonne-per-annum production rate.

“are exceptionally pleased with the outcome of the capital raising and we are grateful for the support of our existing shareholders and welcome new institutional shareholders to our register. This is a very exciting time for Kalium Lakes especially having regard to the production of first SOP and subsequent ramp-up to 90ktpa production expected to be achieved by March 2022” Kalium chief executive officer Rudolph van Niekerk said.

Kalium’s largest shareholder, Greenstone has committed between $8.8 million and $11.3 million as part of the placement to retain a 19.8 per cent holding. Greenstone currently holds 20.5 per cent of Kalium’s shares.

“The expansion further strengthens the company on a number of fronts including the ability to take advantage of economies of scale, provision of working capital facilities, more robust earnings and operating leverage and improves the company’s balance sheet strength,” van Niekerk said on Tuesday.

“The funding will expand Beyondie from 90,000 tonnes per annum to 120,000 tonnes per annum which is well timed into a rising SOP price environment and several potential upside opportunities with COVID-19 impacts normalising.”

“With the additional production to 120,000 tonnes per annum, Beyondie remains a long-life, low-cost operation with the potential to further expand production.”

The company will also conduct a share purchase plan for all eligible shareholders to raise $10 million at the same price of $0.18 per share.

Shareholders can invest in up to $30,000 of shares each for the $0.18 per share offer price.

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