Australian Potash Ltd (ASX:APC) has added substantial confidence to its Lake Wells Sulphate of Potash (SOP) Project resource estimate, completing conclusive production well development work as part of an ongoing definitive feasibility study (DFS).
Several technical work programs have been completed, including diamond drilling and brine assays, providing APC with a deeper understanding of its Western Australian potash resource as well as indicating potential resource expansion.
APC managing director & CEO Matt Shackleton said the quality of a JORC resource estimate was integral to any mineral project’s success and Lake Wells was no different.
He said: “Project developments have to demonstrate to the lowest level of risk, both longevity of production and recoverability of minerals.
“A bore-field permits a more straightforward assessment of at least the recoverability of brine and is a well-tried and proven method for abstracting brine."
READ: Australian Potash begins evaporation pond trials at Lake Wells Potash Project
The development work added two bores at Lakes Wells which showed the widest high-yielding basal sands intersections to date, with indicative flow rates above project requirement of 15 litres per second.
Cased to 175.5 metres, the second bore was developed through 62 metres of high-yielding sands in the paleochannel and is the deepest production well yet developed by APC.
Brine drilling has totalled 4,266 metres since the reported resource was calculated, including the two production wells, and 52,600 metres of passive seismic data has been collected.
The seismic data contributes to the understanding of Lake Wells’ palaeovalley model and has facilitated identification of drill targets for the current program.
On-playa pre concentration ponds covering 10 square kilometres will take advantage of the surface layer of low-permeability clay
READ: Australia Potash’s Lake Wells SOP Project gets confidence boost with adoption of JORC brine guideline
Shackleton continued: “Central to the final field program at Lake Wells is the push to JORC reserve estimate.
“Developing these two additional production wells, test-pumping them and collecting bed-rock core for analysis are critical factors that will feed into the calculation of an ore reserve estimate for Lake Wells.
“APC’s extensive geotechnical field and test work at the project have confirmed the existence of a uniform, flat-lying layer of low-permeability clay at the lake surface that we can accommodate ‘on-playa’ evaporation ponds.
“Because of this, we can avoid the significant capital expenditure required to line the pre-concentration ponds.
“The final geotechnical field trials will allow us to establish the optimal commercial-scale pond design, in terms of cost of construction and effectiveness of the plan.”
READ: Australian Potash to take part in two-year SOP trial in WA
APC completed a scoping study for Lake Wells in 2017 which exceeded expectations and confirmed its strong economic and technical aspects, highlighting APC’s potential to become a long-life, low-capital and high-margin SOP producer.
The study outlined a stage-one production rate of 150,000 tonnes per annum of premium-priced SOP through years 1-5 and a rate of 300,000 tonnes per annum in years 6-20.
At a SOP price of $795 a tonne, Lake Wells is expected to generate life-of-mine annual operating ore-tax cashflow of $118 million, with further upside through continued exploration.