Australian Potash Raising $5M to Advance Lake Wells

THE BOURSE WHISPERER: Australian Potash (ASX: APC) is to undertake a renounceable rights issue, aiming to raise up to approximately $5.23 million.

Australian Potash declared its intentions to undertake a pro rata renounceable rights (or entitlements) issue to eligible shareholders to raise up to $5,229,824, comprising an offer on the basis of three rights shares for every fourteen existing shares held at an issue price of eight cents per Rights Share, together with one free attaching listed option exercisable at 12 cents on or before 8 August 2021 for every four Rights Shares subscribed.

Shareholders in Australian Potash will be given the opportunity to subscribe for Rights Shares in excess of their entitlement if there is a shortfall.

The Rights Issue is intended to be underwritten to $4.2 million by Patersons Securities, who are also acting as Lead Manager to the Rights Issue.

“The company’s directors intend to participate in the Rights Issue,” Australian Potash said in its ASX announcement.

“The funds raised from the Rights Issue will be used to complete the definitive feasibility study for the company’s high-grade, low cost Lake Wells Potash Project (LWPP), and for general working capital.

“Further details will be provided in a prospectus which is intended to be lodged with ASX on 13 February 2019.”

Australian Potash holds a 100 per cent-interest in the LWPP located approximately 500 kilometres northeast of Kalgoorlie, in Western Australia’s Eastern Goldfields.

The LWPP is a palaeochannel brine hosted sulphate of potash project.

Palaeochannel bore fields supply large volumes of brine to many existing mining operations throughout WA, and this technique is a well understood and proven method for extracting brine.

Australian Potash completed a Scoping Study on the LWPP in 2017 that exceeded company expectations by confirming the project’s economic and technical aspects are all exceptionally strong.

The company said the study highlighted its potential to become a major long-life, low capital and high margin sulphate of potash producer.