Reward Minerals Ltd (ASX:RWD) has entered into an exclusivity deed with the receivers of Kalium Lakes Limited relating to the potential acquisition of the Beyondie Sulphate of Potash (SOP) Project in Western Australia.
Both parties have agreed that they intend to negotiate in good faith to seek to agree on the terms of a sale agreement and any associated documents required to give effect to the sale of the Beyondie Project, in line with key terms set out in a non-binding term sheet.
The total consideration for the acquisition is $14.75 million cash plus a final payment of $5 million by June 30, 2025 and an exclusivity payment of $250,000.
This is a “rare opportunity” for Reward as the market outlook for SOP remains attractive, driven by population growth, restricted supply, low-chloride fertilizer demand and increased usage for higher-value crops driving strong prices expected to continue in coming years.
The upfront consideration is proposed to be funded via an equity raising for a minimum of $16 million, expected to be via an entitlement issue, with details to be announced in due course.
“Rare opportunity"
Reward executive director Dr Michael Ruane said: “It is rare that the opportunity exists to acquire an asset such as the Beyondie SOP Project.
“The project is well advanced in a technical sense and is a perfect fit with the Reward team skill set.
“A further bonus of the acquisition is that with relatively minor modifications, the Beyondie operation will serve as a low-cost R&D facility required to confirm the operational parameters associated with the new Reward Process.
“Laboratory test-work already undertaken suggests that the Beyondie feed brine responds well to the Reward Process.”
Investors have welcomed the agreement with RWD shares up by 11% to $0.05.
Beyondie highlights
The previous owners of the Beyondie Project are estimated to have spent in excess of $400 million on mineral resource or reserve definition, development, construction and operations of the only producing SOP mine in Australia, prior to the appointment of receivers and managers and voluntary administrators on August 3, 2023.
Significant infrastructure includes:
- fully constructed and permitted SOP trench and brine field, fresh water bore field, evaporation ponds and processing operations;
- numerous granted Mining, Miscellaneous Licences and Exploration Tenements covering an area of approximately 1,800 square kilometres; and
- 7.5MW Power Station.