Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (FRA:W1D) (OTCMKTS:WHELF) has secured A$45.5 million in additional funding to support rapid development of the Lake Way Sulphate of Potash (SOP) Project in Western Australia.

The company has received binding commitments from a number of new Australian institutional investors and existing institutional shareholders for a placement to raise A$23.5 million.

Taurus Funds Management has continued its support of the project by extending the Stage 1 Debt Facility by a further US$15 million (A$22 million).

“Strong interest”

SO4 managing director and CEO Tony Swiericzuk said, “We are very pleased to complete the next stage of our funding, having attracted such strong interest from a number of new institutional investors and ongoing support of our existing institutional shareholders.”

SO4 has agreed to place around 33.6 million shares to a number of new Australian institutional investors and existing institutional shareholders at A70 cents each.

The placement will be made under the company’s existing Listing Rule 7.1 and 7.1A placement capacity.

Debt facility extended

In August 2019, SO4 mandated Taurus Funds Management to provide up to US$150 million project financing for the SOP project.

This stage I facility provided initial access to funding for early construction works and enabled completion of the BFS prior to drawdown of the main Project Development Facility (PDF).

The facility is also funding civil works, including the second stage of trenches and key evaporation ponds under construction, which will provide initial harvest salts to enable the feed for plant commissioning.

Given the lead-time required to generate harvest salts, the facility is a crucial part of accelerating development towards commercial production.

Following BFS completion, SO4 has been working with Taurus to complete documentation and satisfy the conditions precedent to the PDF.

To fund ongoing construction of key infrastructure prior to drawdown of the PDF, the parties have agreed to a US$15 million extension to the facility.

“Close relationship” with Taurus

Swiericzuk said, “Our close working relationship with Taurus has enabled SO4 to extend the Stage 1 Debt Facility whilst we complete documentation and satisfaction of conditions precedent for the main Project Development Facility.

“Along with the placement funds, the extension to the debt facility enables us to continue the rapid construction at Lake Way in line with our project schedule.”

This includes construction of stage II on-lake infrastructure and start of site works for the process plant in early 2020, along with ongoing exploration of other lakes and general working capital.

Directors to participate

Directors and management intend to subscribe for a total of 1.3 million shares in the placement, including 428,571 shares by Swiericzuk and 275,000 shares by chairman Ian Middlemas, subject to shareholder approval.

The issue price represents a 10.3% discount to the last closing price of A78 cents on ASX.