ASX-listed exploration company Reward Minerals has signed an exclusivity deed with receivers of Kalium Lakes, to acquire the Beyondie sulphate of potash (SOP) project in Western Australia (WA).
Reward Minerals has to pay A$14.75m ($9.58m) to purchase the project, which is located 160km south-east of Newman, WA.
Kalium secured more than A$450m ($291.5m) in debt and equity for the acquisition and development of the Beyondie project in 2016.
First mining tenements were granted in 2018 and exploration began at the project.
It was followed by an additional A$176m ($114m) being secured by Kalium for the project’s construction, in December 2019.
The first SOP production began in October 2021. However, several operational obstacles were seen, which resulted in significant cost overruns.
This eventually led to the shutdown of operations. By August 2022, a debt restructuring for the project was required.
In August 2023, KPMG officials Martin Jones, Matthew Woods and Clint Joseph were appointed as voluntary administrators for Kalium and its subsidiaries.
The Beyondie project features a fully constructed SOP trench and brine field, fresh water bore field, evaporation ponds and processing operations. The tenements cover a 1,800km² area and are powered by a 7.5MW power station.
The proposed transaction is expected to be closed next January. which could be extended based on an agreement between the parties. Reward Minerals aims to complete the transaction by this time, subject to securing funding.
It intends to raise A$22.78m ($14.7m) by January 2024 to fund the transaction.
Apart from the consideration of A$14.75m, Reward will need to pay A$5m ($3.2m) by 30 June 2025, along with an exclusivity payment of A$250,000 ($161,985).
Reward Minerals executive director Michael Ruane said: “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.
“A further bonus of the acquisition is that with relatively minor modifications, the Beyondie operation will serve as a low-cost R&D facility required to confirm the operational parameters associated with the new Reward Process. Laboratory testwork already undertaken suggests that the Beyondie feed brine responds well to the reward process.”