Way back at the original Olaroz DFS stage, it was billed as a...

Way back at the original Olaroz DFS stage, it was billed as a Lithium-potash project. There is a substantial potash resource, but it makes no sense as a standalone potash development. There was work done looking at a plant to be added at a later stage to recover potash as a byproduct. It would process the sylvite salts from the harvest ponds at the end of the pond system and hence would follow the lithium development by 2 or 3 years to allow for potash to accumulate.




Initially it was suggested the production rate could be 36ktpa as a byproduct from 15ktpa lithium production.
Capital costs were expected to be modest.

By the time the DFS was done, they scaled that back to just 10kpta, but noted that "This production rate has not been optimised and testwork to be undertaken over coming months may result in a significant increase in this rate"




So, at the prices of the day, it would have contributed byproduct credits of about 300 USD per tonne of LCE production, for an additional 14m USD investment
This was based on average pricing as below


And then Lithium prices went to the moon while potash went the other way. When they started up, they had so much on their plate that the distraction of potash production and funding just didn't enter the picture again. Even now, I think it would be a hard call until prices are greatly improved (they're coming, for sure...). Meantime, they can continue to stockpile the sylvite from the harvest ponds, get a better fix on the potential tonnage, and wait for the day that it all becomes worthwhile.



If you are interested, you can hunt out more information in the DFS announcement May4, 2011 and the various presentations in the 12 months either side of that date. Also, the NI 43-101 report of April 30, 2010 (see under "technical reports" in the investors section of the AKE website)