KALIUM LAKES LIMITED (ASX:KLL) - Ann: Investor Presentation - Project Update & Equity Raising, page-20 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by sabine: ↑

What I still don’t understand is why KLL “underestimated the complexity of taking a German-based design and building it in harsh Western Australian desert conditions”
K+S was monitoring the process and is familiar with harsh desert environments in South America.
Were they intending to set it up in the same way as a Rhine-side German operation?
I also don’t understand why “ important review processes by independent engineering specialists” were not conducted last year..
.... “ Importantly, our revised capital budget has been verified by independent engineering specialists who have reviewed the project and we are confident that the offer will fund us through to completion of construction of the BSOPP and through to first production.”

And -from the company notes - the $7.5M that selected contractors will now receive shares for in lieu of payment ...does that essentially make it a $68.5M shortfall they unexpectedly encountered?
Which contractors?

cheers

https://www.australianmining.com.au/news/kalium-lakes-hits-financial-snag-at-semi-completed-bsopp/
Kalium Lakes to overcome setback at Beyondie project

May 22, 2020 News Salomae Haselgrove

The Kalium Lakes Beyondie sulphate of potash project. Image: Kalium.
Kalium Lakes will advance the Beyondie sulphate of potash project (BSOPP) in Western Australia through to first production by raising fresh working capital.

All proceeds of the $61 million raising will be used to fund the construction of the project, with major shareholder Greenstone Resources already committed to purchasing approximately $12 million of Kalium Lakes shares.
Kalium Lakes identified an overrun of capital costs due to the complication of setting up operations for a brand-new industry in Australia.

This is mainly due to weather impacts, including two cyclones and design changes on the processing plant and the product storage and treatment infrastructure.
Kalium, therefore, underestimated the complexity of taking a German-based design and building it in harsh Western Australian desert conditions.

“Commencing a new Australian industry and being a first mover in sulphate of potash (SOP) has presented some development challenges,” Kalium Lakes managing director Brett Hazelden said.

“Despite the capital cost overrun, the project still remains a financially attractive, long life, low operating cost and high margin business once it commences steady state operations.

“Importantly, our revised capital budget has been verified by independent engineering specialists who have reviewed the project and we are confident that the offer will fund us through to completion of construction of the BSOPP and through to first production.”

The Beyondie project is now 40 per cent complete, with Kalium Lakes having completed approximately $100 million worth of works.

This includes the installation of all brine production bores and freshwater bores, 23,000 tonnes of SOP being pumped into evaporation ponds, placement of high-density polyethylene (HDPE) pipelines and completion of 10-mile trenches and two pump stations.

Works relating to non-process infrastructure is also nearing completion, with the gas pipeline awaiting installation.
Kalium Lakes expects to deliver first production at Beyondie in the third quarter of next year. Its ore reserve life is estimated at 30-plus years.

Expand

There are a few things that are interesting.
I’d like to know how you can need more bores to abstract the same volume of brine but not reduce the reserve.
Presumably each bore was giving less brine than predicted.
To me that would suggest that the basal aquifer wasn’t performing as modelled?

As for the plant you have to wonder what the BFS & FEED engineers were thinking.

SO4 is looking good after its recent raise, KLL could bounce well.