Kalium Lakes Limited ACN 613 656 643 (KLL or Kalium Lakes) and unlisted, emerging magnesium producer EcoMag Limited (EcoMag) have signed a term sheet (Term Sheet) committing both companies to jointly undertake a feasibility study to evaluate the commercial extraction of magnesium from residual brines produced at the Beyondie Sulphate of Potash Project (BSOPP), for sale into international speciality chemical markets.
On confirmation that the extraction of magnesium is financially viable, the parties propose to negotiate a formal joint venture arrangement. KLL has already identified 8.52 Mt1 of existing Magnesium (Mg) JORC defined Mineral Resource.
The Term Sheet follows successful pilot scale trials by EcoMag of the residual brines from the BSOPP's pilot evaporation ponds during 2018 and 2019. The trials utilised a high magnesium content (up to 9%) feed brine to produce 99.5% pure hydrated magnesium carbonate (HMC) with relatively low levels of impurities and an overall recovery rate in excess of 95%.
As a result, the potential Joint Venture is proposed to extract very high purity HMC as a precursor compound to producing magnesium oxides and hydroxides, which have current market prices between US$1,000 and US$2,000 per tonne.
Kalium Lakes' Managing Director, Brett Hazelden, commented: 'Maximising shareholder value has resulted in our team continually investigating solutions to take full advantage of the resource at Beyondie. We see strong synergies with our Sulphate of Potash core business if we can leverage the technical expertise of EcoMag to extract and sell a magnesium product from our residual brine stream.
'The proposed Joint Venture would utilise our base infrastructure, including a gas pipeline, gas power station, accommodation village, access road and airstrip that has been constructed with Northern Australia Infrastructure Facility support.
EcoMag's Chief Executive Officer, Tony Crimmins, said: 'The magnesium extraction will involve a separate, secondary process. We will recycle the residual brines from the potash evaporation ponds to produce a material that is sold for use in cleaning up the environment, both air and water, as well as in additional environmentally friendly products.'
During the time that the Term Sheet is in place (being 12 months), EcoMag has agreed it will not enter into any arrangements with any other producers or prospective producers of potash within Western Australia in relation to the production of any of these products and Kalium Lakes has agreed not to enter into arrangements with any other entity to produce the products.
The Beyondie SOP Project has already been granted Major Project Status by the Australian Federal Government, reflecting its national strategic significance to Australia.
Magnesium has been identified by the Australian Federal Government as one of six critical minerals important for industrial progress and emerging technologies. In August 2019, The Department of Industry, Innovation and Science published its 'Outlook for selected Critical Minerals' offering significant potential for Australia, including magnesium (alongside niobium, rare earth elements, cobalt, antimony and tungsten) and noting projections of strong demand across the globe for decades to come, particularly in agriculture, construction, environmental and industrial applications.
About EcoMag Limited
EcoMag Limited is an unlisted Australian public company established in 2015 to produce and sell a range of specialty chemicals derived from magnesium extracted from brines (hypersaline water). The company utilises a process co-invented by EcoMag Chief Technology Officer, Professor Tam Tran and subsequently developed, piloted and optimised by EcoMag to extract high purity magnesium compounds from subterranean brines and the waste bitterns generated as a by-product by salt producers (including common sea-salt and potassium salts). Magnesium oxides and organics are used in a range of high-value environmental, agricultural, construction, industrial and pharmaceutical applications. EcoMag continues to invest in an expanding portfolio of advanced magnesium materials in collaboration with research institutions in Australia and overseas.
Headquartered in Sydney where it operates a boutique scale processing plant, with an engineering and approvals office in Perth, EcoMag has completed a feasibility study regarding the construction and operation of a plant capable of producing 80,000 tonnes per year of high purity hydrated magnesium carbonate and is evaluating a number of potential brine sources and locations.
EcoMag Direct Specialty Chemicals offers reagent quality magnesium chemicals to universities, corporate laboratories, testing facilities and other research organisations in Australia, with plans to expand to overseas sales over time. EcoMag also has a strategic collaboration in place with ASX listed Abundant Produce Limited (ASX: ABT) regarding the development, prototyping, testing and sale of magnesium based over-the-counter therapies offering natural, non-opioid relief from muscle and joint pain, headaches and migraines, and a range of skin disorders including psoriasis, eczema and rosacea.
Forward-Looking Information
Certain information in this document refers to the intentions of Kalium Lakes, but these are not intended to be forecasts, forward looking statements or statements about the future matters for the purposes of the Corporations Act or any other applicable law. The occurrence of the events in the future are subject to risk, uncertainties and other actions that may cause Kalium Lakes' actual results, performance or achievements to differ from those referred to in this document. Accordingly Kalium Lakes and its affiliates and their directors, officers, employees and agents do not give any assurance or guarantee that the occurrence of these events referred to in the document will actually occur as contemplated.
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