PWN Raises $1.8M and Expands its Dinner Hill Resource
Potash West NL (ASX:PWN) has completed a $1.8M placement at 4c per share in order to advance its flagship Dinner Hill Phosphate project, located amidst one of the world’s largest greensand deposits. PWN’s initial capital raise target of $1.5M was heavily oversubscribed.
PWN is a mineral exploration company focused on developing phosphate and potassium-rich deposits in Australia’s Perth Basin. Currently, PWN holds exploration licenses and applications in 12 tenements covering an area of 2,640km2.
PWN’s Managing Director, Pat McManus commented on the placement by saying, “We are very pleased with the support received for this capital raising, particularly in what are challenging times for the junior resource sector. Mr. McManus went on to add, “We will now look to accelerate the progress on our Dinner Hill phosphate project in the Dandaragan Trough in Western Australia”.
Under the terms of the placement, PWN will issue 45 million fully paid ordinary shares and 22.5 million options, with a 3 year life and a 7c exercise price.
Just prior to securing additional funding, PWN substantially increased its potash and phosphate resources at Dinner Hill in the Dandaragan Trough. Using a cut-off grade of 1.45% phosphate (P2O5), PWN established an Indicated Mineral Resource of 250Mt at 2.9% P2O5.
Within this phosphate resource there is an Indicated Mineral Resource of 155Mt of K-Max potash ore at 4.1% potassium oxide (K2O) and an Inferred Mineral Resource of 20Mt at 2% K20. An additional Indicated Mineral Resource of 18Mt at 3.8% K2O has also been found close to the phosphate resource.
One important aspect of the resource upgrade is that the phosphate resource increases in grade to the north within an area that had not been drilled previously. This widens the scope for both resource quantity and grade within future exploration work.
The principal potash mineralisation occurs within the Molecap Greensand – which is now estimated to contain 175Mt at 4.0% K20, a 43% increase in tonnes and a 12% grade reduction compared to the original estimate published in October 2012.
The new phosphate resource will form the basis of pit design and mine scheduling studies PWN intends to carry out as part of a Feasibility Study into phosphate production at Dinner Hill, scheduled for Q3 2015.
According to PWN, the drill program had several objectives:
- identify the extent of mineralisation, to allow a definition of the deposit sufficient to delineate an area that will be affected by mining, for permitting purposes;
- obtain samples to complete metallurgical and process development test work, sufficient for feasibility studies; and
- drill a sample area of the deposit to confirm the drill density that will be required to report a JORC resource to a Measured Resource category.
PWN intends to utilise revenue generated from its application of existing technology to produce phosphate fertiliser, to fund the development of a state of the art $590 million potash production plant before 2021.
Revolutionary Technology on the Horizon
As a further boost, PWN has made progress in its fruitful collaboration with technology partners Strategic Metallurgy (SM) and Lepidico Ltd.
Lepidico has constructed and operated a continuous process operation in a small scale plant, to produce lithium carbonate from lepidolite, a lithium-rich mica.
PWN’s prime focus is on potassium/potash processing and it owns 100% of the ‘K-Max’ process developed by SM. However, PWN also has a 25% stake in similar processing technology adapted for Lithium production. Through a joint-venture in Li-Technology Pty Ltd with SM (25% PWN, 75% SM), the two companies are in the process of transferring the ownership of Li-Technology to Lepidico, who are responsible for commercialising the technology, in exchange for shares.
‘K-Max’ and ‘L-Max’ technologies are trailblazing methods of processing ores without the need for expensive, energy-intensive processing methods that typically raise production costs.
By collaborating on the development of both ‘K-Max’ (potassium processing) and ‘L-Max’ (lithium processing) technologies, PWN is hopeful that introducing such disruptive and ground-breaking processing methods, will allow it to take up a dominant position in the global potash market – while receiving significant royalties from ‘L-Max’ licensing as and when it is proved to be commercially viable.
Lepidico has been fast tracking the development of the ‘L-Max’ process to ensure it can commercialise the technology rapidly. The first laboratory tests were conducted in September 2014. Since then, the complete process from ore to final products, has been confirmed through batch laboratory tests, and computer modelling.
As part of its plan to develop the Dinner Hill project all the way through to production, PWN has replaced a key member of its board.
Gary Johnson stepped down as Non-Executive Director at the end of June, to focus on the development of lithium extraction technology as part of his work with Strategic Metallurgy and Lepidico.
In his place, Dr. Natalia Streltsova has joined PWN’s Board as a Non-Executive Director. Dr. Streltsova is a chemical engineer, with extensive experience in the minerals industry, the last 15 years of which has been in technical leadership roles in major mining houses, such as Vale SA, BHP Billiton and WMC Resources Limited.
Commenting on the appointment, PWN Chairman Adrian Griffin said, “Her [Natalia Streltsova] experience in overseeing project development in the mining industry will be invaluable as we drive to our goal of phosphate production from the Dandaragan Trough. Specifically her exposure to project evaluation in the fertiliser industry will be invaluable.”
Cooling of Petratherm Deal
In a change of strategy, PWN has also taken the step of reversing its decision to sell 100% of its German-based South Harz project to ASX-listed Petrotherm Limited (ASX:PTR). The two parties have decided not to proceed with the transaction leaving PWN to negotiate with other parties to achieve a similar outcome.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Longhou Capital Markets Pty Ltd (AFSL No. 292464). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.