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Salt Lake Potash paves way for Mitsubishi offtake agreement
Mineral explorer Salt Lake Potash has signed a memorandum of understanding with Mitsubishi for the first formal sulphate-of-potash offtake agreement concerning its Goldfields Salt Lakes project.
The MOU sets out the terms for an offtake agreement which will see Mitsubishi gain sales and offtake rights for up to 50% of the sulphate of potash (SOP) production from a planned demonstration plant at Goldfields, for distribution to the Asian and Oceanic markets.
Other terms specified in the non-binding MOU include market pricing and commission mechanisms, delivery parameters and strategic advice regarding regional marketing from Mitsubishi.
Matt Syme, chief executive of Salt Lake Potash, said: "Mitsubishi's global pre-eminence in commodities trading and finance and longstanding involvement in Australian industry, give us great confidence that we can build a very cohesive and beneficial partnership over time. Their interest is a strong endorsement of the market outlook for SOP and also of our plans to supply these markets."
The AIM-quoted company is in the process of completing studies for the construction of the demonstration which is expected to produce up to 50,000tpa of high quality SOP.
The GSLP holds nine salt lakes and is located in Western Australia and includes the Lake Wells project which has seen extensive drilling, sampling and geophysical surveying since its acquisition in 2015.
"We anticipate one or two more potential distribution agreements and we believe our patience in aiming for the very best channels and markets is the right approach," said Syme.
As of 1420 BST, Salt Lake Potash's shares were up 5.98% at 31.90p.