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https://www.theaustralian.com.au/bu...g/news-story/f7969abb757877ac8c0ed29a60c65189

WA potash producer Kalium Lakes hits market for raising
Kalium Lakes has hit the market for a deeply discounted raising to finish construction of its sulphate of potash project.

• NICK EVANS
  RESOURCE WRITER
  
• 3:53PM MAY 11, 2020

Would-be WA potash producer Kalium Lakes has hit the market for a deeply discounted raising to finish construction of its sulphate of potash project, offering a 70 per cent discount to its 49c last trading price to get the $60m deal over the line.

Co-managed by Morgans and Foster Stockbroking the raising has an indicative 15c a share pricing - well under Kalium’s 49c trading price in February when the company suspended trading citing cost overruns at its under-construction Pilbara potash project.

The fate of the raising will be of significant interest to the federal government’s Northern Australia Infrastructure Project, which has chipped in $74m to help fund a gas pipeline and power station for the troubled project.

Particularly now Kalium is out raising the cash, and naming overruns on the gas pipeline as a significant contributor. Documents associated with the raising suggest the problems run deeper than that, however, suggesting the company failed to take into account the impact of transporting a German-designed processing plant to the very different climate of the Pilbara.

Kalium Lakes also underestimated the flow from the bores that will take brine water from underground to evaporation ponds, and needs to drill additional holes and install more pumping equipment.

The two cycles that swept the region while the project was under construction didn’t help either.

But in good news for taxpayers, Kalium Lakes has not yet drawn down the bulk of its NAIF funding - $66m is still undrawn, according to the raising documents, with the company needing a total of $237m to finalise construction - it is now 40 per cent complete - with $55m of that to come from the current raising.