St. Barbara Earns into Lake Wells Project for AU$1.75 Million

St. Barbara Earns into Lake Wells Project for AU$1.75 Million

Located in Western Australia’s Eastern Goldfields region, Lake Wells is comprised of both a gold and sulfate of potash resource.

Shares of Australian Potash (APC) (ASX:APC) slipped 5 percent on Monday (January 13), then rebounded, after gold producer St. Barbara (ASX:SBM,OTC Pink:STBMY) completed its first earn-in payment on the Lake Wells project.

The earn-in and joint venture agreement for Lake Wells was penned between the two Australian companies in 2018, and the first earn-in cost St. Barbara AU$1.75 million.

In addition to the earn-in money, St. Barbara has agreed to reimburse APC by AU$318,000 to cover previously incurred gold exploration costs at the project.

Located northeast of Kalgoorlie in Western Australia’s Eastern Goldfields region, Lake Wells is comprised of both a gold and sulfate of potash (SOP) resource.

As laid out in the 2018 agreement, APC will retain 100 percent of the potash mineral rights at Lake Wells.

“Our strategic intent for the Lake Wells gold project was to partner with a capable and proven mid-tier gold company to help unlock the inherent value we believe this package of ground holds,” said Matt Shackleton, CEO and managing director of APC, in Monday’s press release.

He continued, “In St. Barbara we have that partner and progressing to the second earn-in period increases our confidence that future exploration success could add significant value to APC and its flagship Lake Wells SOP project.”

With the first earn in complete, St. Barbara can now proceed with the second earn in to acquire a 70 percent interest in the tenements. To do so it will have to spend an additional AU$3.5 million on exploration over the next two years, as well as reimburse APC for additional expenditure costs.

In a definitive feasibility study carried out by APC, the life of mine for Lake Wells is pegged at 30 years with annual SOP output 150,000 metric tons.

SOP is considered a top-tier fertilizer used on high-value crops like tobacco, nuts, tea and coffee. Demand for the crop additive is expected to increase over the next decade in conjunction with population growth and increasingly difficult growing seasons around the world.

These are conditions that APC hopes to benefit from as it advances towards production at Lake Wells.

St. Barbara has operations in Australia, Canada and the Papua New Guinean island of Simberi. Its properties produced 454,985 ounces of gold in 2019 combined.

Shares of APC ended Monday at AU$0.095, while St. Barbara closed at AU$2.71.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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