As an investor with us, you will be familiar with the story behind Kallium Lakes (ASX: KLL). We have been following Kallium for almost a year now as their Beyondie Sulphate of Potash (SOP) project in Western Australia progressed through the final stages of feasibility to be fully funded, with construction now in full swing. Debt finance was provided by the Northern Australia Infrastructure Fund (NAIF), as well as German bankers KfW that was also backed by the German government – this highlights the quality of the project.
So why the interest? SOP potash is the premium grade of potash used as fertiliser for high-value crops around the world and Kallium will be the first producer SOP in Australia. Once compete, Kallium will be one of the lowest-cost producers in the world, commanding a high margin (over 50%) for its product. With a project life of more than 50 years, this business will generate a substantial amount of cash once it is up and running with further opportunities for expansion ahead.
The production process can be viewed here.
All of stage one production (90,000MT +) has been taken up under a binding contract with the German global distributor K+S. At the moment Australia imports all of its SOP potash, mostly through K+S who will soon use the SOP from Kallium to distribute around Australian and New Zealand.
This week Kallium announced a deal with EcoMag Limited to undertake a joint pre-feasibility study into extracting magnesium by-products from the Kallium waste bitterns. Kallium has 8.52Mt of contained magnesium in its current resource at Beyondie, which has not been factored into the current financial forecast. Magnesium products attract prices of US $1,000 – $2,000 /t and have a range of applications including construction, agricultural, industrial, and environmental uses.
Kallium is one to watch, it has a great management team and this story will continue to evolve.
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