Pilot Pond Update and Harvest Trials. Large Scale Pilot Harvesting Trials March 2018

Transcription

1 ASX Release Thursday 22 March 2018 Pilot Pond Update and Harvest Trials Highlights Evaporation Pond trials continue to provide invaluable insights at a representative scale not previously undertaken in Australia. 164 million litres of brine have been pumped since pump testing began, of which 83 million litres of brine have been pumped into the trial ponds. More than 10,000 tonnes of salts have been produced so far, including 3,160 tonnes of mixed potassium salts that can be processed to generate approximately 520 tonnes of SOP. Harvesting trials are ongoing providing input into harvest equipment selection and overall full scale harvest planning. Salt harvesting can commence on the engineered,1mm HDPE-lined off lake ponds after deposition of a mm protective salt layer. This takes 3-6 months to develop, representing a significant time saving of at least 12 months to first SOP production in comparison to utilising lake or clay based pond surfaces. Brine concentration curves have performed consistently as the trials have scaled up from early pilot scale and bench top studies. Time required to achieve steady state operations is approximately six months, depending on seasonal effects (temperature and humidity). Kalium Lakes Limited (KLL) is pleased to provide an update on its Large Scale Pilot Evaporation trials at the 100% owned Beyondie Sulphate Of Potash Project (BSOPP). The pilot trials commenced construction in June 2017 with first brine entering the system in August These pilot ponds have been run continuously and form the basis of pond design for the Bankable Feasibility Study (BFS). Page 1 of 7

2 Recent harvest trials are now providing detailed data about the salts, brines and techniques required to efficiently run the future operation. Managing Director, Brett Hazelden, commented: These Large Scale Pilot Evaporation Ponds cover around five MCGs in total size and have proved invaluable in testing every facet of a fully operational potash evaporation pond process. It has enabled Kalium Lakes to assess pump and pipe requirements from bores and trenches, determine pond design parameters to achieve a fully gravity fed system, observe brine evaporation behaviour and measure salt crystallisation and growth, test harvesting techniques and identify maintenance requirements. These are the largest scale pilot pond trials in Australia, which provide government agencies, investors and prospective debt financiers with a high level of certainty on scale up parameters that are being included in the Bankable Feasibility Study, Mr Hazelden said. A short video showing some of the harvest trials can viewed on the Company s website by using this link. Large Scale Pilot Evaporation Pond Program The Large Scale Pilot Evaporation Pond program reflects KLL s development strategy, where a staged development approach is preceded by a pilot program to verify current assumptions and operational parameters along with production of bulk samples for marketing purposes. This trial program is based at the Beyondie, 10 Mile and Sunshine areas of the BSOPP. The pilot ponds have been operated on a continuous basis (not batch) as recommended by KLL s key consultants K-UTEC, DRA and DSB International. The process involves pumping brine from a bore and/or trench into a concentration pond which evaporates water prior to reaching the salting point (refer to figure 1). At this point brine is gravity fed (not pumped) to the next series of ponds where the sodium salts crystallise out of solution. The brine is again gravity fed to the series of ponds where potassium salts commence crystallising out of solution. Finally, a residual magnesium bittern remains, representing only 1-2% of the original brine volume pumped into the concentrator pond. This residual brine has been the subject of magnesium product investigations and pilot trials. Importantly all the ponds are tiered so that the brine can flow via gravity, without the need for pumping between ponds. Page 2 of 7

3 Figure 1: Indicative Evaporation Pond Profile The Large Scale Pilot Evaporation Pond program has provided a detailed understanding of the following parameters, which are being optimised as part of the Bankable Feasibility Study currently underway and due for completion in Q3 2018: Layout and number of ponds Dimensions of ponds to optimise flow path Optimum brine depth within ponds Differential evaporation rates as the brine density increases Brine concentration profile and phase chemistry over seasonal and diurnal ranges Brine entrainment in salt floors Pond floor and liner requirements Harvest equipment and plans Pond start-up procedure Time required to achieve steady state operations Operations and maintenance requirements Page 3 of 7

4 The current large scale evaporation trial has been run continuously over the last seven months and follows two previous smaller scale pilot trials, all of which were utilised to inform the BFS design parameters. The Kalium Lakes pilot program has spanned more than two years and covered all seasons providing an invaluable data set. A summary of high level observations and commentary is provided below: 164 million litres of brine have been pumped since pump testing began, of which 83 million litres of brine have been pumped into the trial ponds. More than 10,000 tonnes of salts have been produced so far, including 3,160 tonnes of mixed potassium salts that can be processed to generate approximately 520 tonnes of SOP. Salt growth in each of the ponds varies in thickness from 95mm to 305mm during the seven month trial period, which is an average of 0.52mm to 2.28mm per day salt growth. It should be noted that ponds were progressively brought online during a number of months as seen in the time series photos (below). Importantly the harvested potassium salts contain ~7.5% K2O, accordingly, to achieve 1 tonne of SOP product requires ~7 tonnes of harvested mixed potassium salts which are then treated in the purification plant to remove residual sodium, magnesium and chloride salts. Salt harvesting can commence on the engineered,1mm HDPE-lined off lake ponds after deposition of a mm protective salt layer. It will take 3-6 months to develop this layer, after which all other salts above this level will be harvestable.. This is a significant time saving when compared to other salt and potash brine operations around the world which are located on salt lakes or clay pans and require around 400mm of salt to form a trafficable surface on top of which your harvestable salts will be located. As a bench marking exercise, Dampier Salt crystallises mm of salt growth per annum which would appear to be similar to the KLL pilot scale trials on an annualised basis, when taking into account seasonal factors. Therefore to crystallise 400mm of salts would require ~18 months, with a further period to generate sufficient harvestable salt depths. Entrainment of potassium bearing brine is between 10-30% of the salt bed itself and as such needs to be treated as recovery loss or alternative recovered by drainage through harvesting of the sodium chloride salts. KLL s basis of design is to harvest sodium chloride salts to release entrained brine and also avoid costly pond wall lifts which would need to occur if the sodium chloride salt was left in the ponds. Due to Kalium Lakes low Na:K ratio, less sodium chloride salt is produced reducing harvesting requirements. All ponds require a free board design ~ 270mm for a significant 1:100 rainfall event. The brine concentration curves developed; theoretically, in the laboratory and during the initial pilot scale trials have been replicated in the large scale pilot evaporation pond trials. Differential evaporation rates occur as the brine concentration increases. This means fresh brine evaporates at a significantly faster rate compared to the last potassium mixed salt pond. This requires the evaporation pond design basis to allow for an increasing ratio of pond area to brine to achieve the targeted production rate. KLL included this in the Pre-Feasibility Study. Harvesting trials have been ongoing during March as seen in the below photos. Harvest equipment selection, pond harvest intervals and an overall full scale harvesting plan is being prepared on the back of these results for the BFS. A pond start-up procedure has been developed based on the initial start-up of the pilot ponds. Time required to achieve steady state operations is approximately six months, depending on seasonal effects (temperature and humidity). Page 4 of 7

5 Actual Large Scale Pond Brine Concentration Curves versus Previous Assumptions and Testwork Page 5 of 7

6 Large Scale Pilot Evaporation Ponds August 2017 September 2017 September 2017 October 2017 November 2017 December 2017 Large Scale Pilot Evaporation Ponds January 2018 Page 6 of 7

7 Compliance Statement The information in this document that relates to Exploration Targets, Exploration Results, Mineral Resources, Ore Reserves and Production Targets have been extracted from the report(s) listed below. 3 October 2017: Pre-Feasibility Study with Maiden Ore Reserve Confirms Low Cost, Long Life and High Margin Beyondie SOP Project. (Including the attachment, JORC (2012) and NI Technical Report, compiled by German Potash Experts and Competent Persons, K-UTEC AG Salt Technologies (K-UTEC)). The report(s) are available to be viewed on the website at: Kalium Lakes confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources, Ore Reserve Estimates, Exploration Targets or Production Targets, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person s findings are presented have not been materially modified from the original market announcement. Cautionary Statement Regarding Forward-Looking Information Statements regarding plans with respect to the Company s mineral properties may contain forward looking statements. Statements in relation to future matters can only be made where the Company has a reasonable basis for making those statements. This announcement has been prepared in compliance with the current JORC Code 2012 Edition and the current ASX Listing Rules. The Company believes it has a reasonable basis for making the forward-looking statements on 3 October 2017, including any production targets, based on the information contained in the announcement and in particular the JORC 2012 and NI Technical Report. All statements, trend analysis and other information contained in this document relative to markets for Kalium Lakes, trends in resources, recoveries, production and anticipated expense levels, as well as other statements about anticipated future events or results constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as seek, anticipate, believe, plan, estimate, expect and intend and statements that an event or result may, will, should, could or might occur or be achieved and other similar expressions. Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward-looking statements. Forward-looking statements are based on estimates and opinions of management at the date the statements are made. Kalium Lakes does not undertake any obligation to update forward-looking statements even if circumstances or management s estimates or opinions should change. Investors should not place undue reliance on forward-looking statements. *** ENDS *** Corporate Profile (as at 21 March 2018) Kalium Lakes Limited is an exploration and development company, focused on developing the Beyondie Sulphate Of Potash Project in Western Australia with the aim of producing Sulphate of Potash (SOP) for the domestic and international markets. The Beyondie SOP Project comprises 15 granted exploration licences and a miscellaneous licence covering an area of approximately 2,400 square kilometres. This sub-surface brine deposit will supply an evaporation and processing operation located 160 kilometres south east of Newman. The results of the Pre-Feasibility Study, announced on 3 October 2017, confirmed that the Project is technically and financially robust. The Company is also a Joint Venture partner with BCI Minerals Limited (BCI) in the Carnegie Potash Project, a potash exploration project located approximately 220 kilometres north-east of Wiluna. Carnegie comprises one granted exploration licence and two exploration licence applications covering a total area of approximately 1,700 square kilometres. Kalium Lakes Limited ABN: ASX: KLL Ordinary Shares on Issue: 169,793,465 Board of Directors: Chief Financial Officer and Joint Company Secretary: Frederick Kotzee Mal Randall Non-Executive Chairman Brett Hazelden Managing Director Rudolph van Niekerk Executive Director Joint Company Secretary: Gareth Widger Brendan O Hara Non-Executive Director Contact Details: Share Registry: Kalium Lakes Limited Computershare Investor Services Pty Ltd Unit 1, 152 Balcatta Road Level 11, 172 St Georges Terrace BALCATTA WA 6021 Perth, WA 6000 Tel: (within Australia): PO Box 610 Tel: (outside Australia): BALCATTA, WA 6914 Tel: +61 (0) info@kaliumlakes.com.au Web: Page 7 of 7