Australia's largest stock trading and investment forum Australia's #1 stock forum

KLL

Click for more information

0.00%

$7.28 kalium lakes limited

Ann: ASX Waiver Decision Listing Rule 10.11.3, page-31

First 31 Last

Share
Profile

Follow
sevo

7,080 Posts.

526

11/05/20

21:38

Post #: 44560934
Share

Originally posted by sabine: ↑

https://thewest.com.au/business/min...count-on-60m-emergency-raising-ng-b881543827z
Kalium Lakes swallows big discount on $60m emergency raising for Beyondie sulphate of potash project near Newman

Stuart McKinnonThe West Australian
Monday, 11 May 2020 12:19PM
Stuart McKinnon

Aspiring WA potash producer Kalium Lakes has been forced to accept a staggering discount for a $60 million emergency raising to cover a blowout in costs at its Beyondie project 160km south-east of Newman.

The raising, comprising a placement and rights issue through Sydney-based Foster Stockbroking, is set to be priced at 15¢ a share, representing a 70 per cent discount to the company’s last closing price of 49¢.

Kalium shares have been suspended since February 24, when it surprised investors by citing an independent review of the capital expenditure costings and contingencies for Beyondie and its future financing requirements.

A bankable feasibility study on Beyondie placed a $216m cost on the 90,000-tonne-a-year project, which had included a $29m contingency.

It is believed the cost overrun relates to design changes to accommodate performance guarantees required by project lenders, to meet product specifications demanded by German offtake partner K+S and project delays, which have been compounded by COVID-19.

In a note to potential investors, Foster also said the complexity of taking a German-designed plant to the desert of WA had been underestimated while brine extraction rates were lower than expected, requiring additional bores, pumps, pipelines and trenches.

However, the broker, which is underwriting the raising, said the project was now 40 per cent complete with greater certainty around costs, had no further design changes required, had moved to fixed price contracts, extended its timeline by six months and had a 10 per cent cost contingency in place.

First production from Beyondie is now expected in the third quarter of next year, back from the end of this year.
It is understood Kalium has retained the support of its lenders including the Federal Government’s Northern Australia Infrastructure Facility, which has loaned the company $74m to develop Beyondie. Other project financiers, Westpac and German development bank KfW, are also said to be on side.

It is believed the company’s biggest shareholder, London-based private equity outfit Greenstone Resources which holds a 20.5 per cent stake, has committed to take part in the raising with board and management committing $5m above the firm’s pro-rata entitlements.

The Foster note says Beyondie’s low-cost, long-life and strong pricing for sulphate of potash at $US475-$US500/t means the fundamentals of the project remain attractive.

Despite the delays, it described Beyondie as the most advanced sulphate of potash project in WA.

The West Australian understands Kalium Lakes had sought to raise funds through Macquarie last month but failed to reach agreement with the broker.

The Brett Hazelden-led company is one of a handful of aspiring WA potash players in a race to be the first commercial producers of the high-value fertiliser in Australia.

The competitiveness of the fledgling sector is highlighted by a document circulated by Foster comparing Beyondie favourably to projects planned by other WA companies despite the cost blowout.

The Mal Randall-chaired company is also backed by Pilbara pastoralist and businessman Brent Smoothy, who holds a 16.2 per cent stake in the company.

When Kalium made a final investment decision on Beyondie in October, Mr Randall said it had been a remarkable achievement for the company, less than three years after its listing in 2016.

The project comprises 29 production bores, 43km of trenches, 400ha of plastic-lined evaporation ponds, a purification plant, a 70-room camp and worker village, an airstrip and an upgraded 80km access road to Great Northern Highway.

Beyondie will tap the hypersaline brines beneath a series of interconnected salt lakes, evaporate the liquid in ponds before treating and purifying it into sulphate of potash.

SOP commands a significant premium to the more commonly known fertiliser muriate of potash.
Its demand is expected to grow significantly in future because of global population growth, changes in diet and a reduction in arable land.

Expand

"... had moved to fixed price contracts.."

KLL told the market in multiple announcements that the project was on budget. Now we are told they are shifting to fixed price contracts?

Anyone know if fixed price is the norm within the industry?

Reading theses 2 media articles I am amazed at how many things have gone against the smooth execution of this project. No missed steps.... perhaps not.

KLL Price at posting: 49.0¢ Sentiment: None Disclosure: Not Held
3 Upvote

0 Great analysis

Reply

Top Stories

Emerald & Azure score Digger & Dealer awards

MOV

MOVE Logistics picks new interim CEO to take over operations from early September

ARD

Argent begins search for VMS mineralisation at Kempfield Cu-Pb-Zn-Au-Ag play in NSW

G88

Golden Mile ditches Marble Bar and Murchison tenements after weak fieldwork results

M2R

EIS co-funded campaign sees Miramar kick off maiden drilling at Bangemall, Gascoyne WA

VTM

Victory Metals dips -8% even as company set to grow heavy REE resource at North Stanmore

Appliances and furnishings impress - will Harvey Norman be next?

WNX

Wellnex sees first special access scheme prescriptions for new Wellness Life brand

Bitcoin: Current State of Play & Where to Next | Swyftx

AWJ

Auric banks $6.3M in August with processing on-target for 300K in 2024

There are more pages in this discussion • 47 more messages in this thread...

First 31 Last

Add KLL (ASX) to my watchlist