The minerals company’s share price is on the move with an update on the company’s sulphate of potash project in WA.
The post Why the Kalium Lakes (ASX:KLL) share price is rocketing 14% today appeared first on The Motley Fool Australia. –
The Kalium Lakes Ltd (ASX: KLL) share price is soaring today, up 14% in early afternoon trade.
Below, we take a look at this morning’s investor presentation that appears to be driving interest in the ASX resource share.
What did Kalium report today?
Kalium Lakes’ share price is leaping higher after the company reported it’s on the brink of becoming a long life, low cost, high-grade SOP (Sulphate of Potash) producer at its Beyondie SOP Project in Western Australia.
SOP is an agricultural fertiliser and is the preferred form of potassium to use on high-salinity soils. Currently, there is no SOP production in Australia.
According to Kalium’s presentation, construction at its Beyondie project is almost finished and within budget. Kalium is forecasting its first SOP production in September.
The company said it has significant inventories of some 90,000 tonnes of potassium salts produced and waiting on run of mine (ROM) stockpiles, ready for the production start-up. That’s equivalent to approximately 9,000 tonnes of SOP production.
The statement on its Beyondie SOP production expansion plans is also likely stoking the Kalium Lakes share price today. Kalium said it has completed a feasibility study on the immediate expansion from 90 kilo-tonnes per annum (ktpa) to 120 ktpa, a level it can reach by the fourth quarter of 2022.
The study revealed the company can deliver the additional 30 ktpa for a capital cost of $45 million. That works out to $1,513/tonne compared to the $3,113/tonne for the initial 90 ktpa production capacity.
The gas supply infrastructure in place is sufficient to supply the expanded production, while “only a small upgrade to the power station” will be needed to increase production to 120ktpa of SOP.
Kalium also cited a “buoyant SOP market”, forecasting year-on-year price increases. It estimates Beyondie to have a 50-year mine life, with significant expansion opportunities ahead.
Kalium Lakes share price snapshot
Kalium Lakes’ share price has gained 37% over the past 12 months, compared to a gain of 23% on the All Ordinaries Index (ASX: XAO).
Year-to-date, Kalium shares are up by more than 5%.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.