The Northern Australia Infrastructure Facility (NAIF) has made an Investment Decision to provide a debt financing facility of $140 million to assist the development of Australian Potash Limited’s (APC) Lake Wells Sulphate of Potash (SOP) Project, near Laverton in Western Australia.
NAIF’s decision follows a comprehensive process of due diligence involving the project’s Independent Technical and Market Experts.
The NAIF facility is the first major step in the financing pathway for the development of Lake Wells and is one tranche of a multi-tranche debt facility. The NAIF loan facility will have a 17-year tenor.
Export Finance Australia is in the process of progressing their due diligence and credit assessment to potentially provide a tranche of the senior debt facility.
A club structure of commercial banks is also being formalised with an investment decision on providing the final tranche of the senior debt facility expected through the balance of H2 FY21.
The NAIF facility is subject to commercial and project conditions precedent including the conclusion of the responsible Federal Minister’s consideration period as outlined in the NAIF Act 2016 and the State having notified NAIF that it agrees to the investment decision.
APC’s flagship Lake Wells SOP Project is located approximately 500 kilometres northeast of Kalgoorlie, in Western Australia’s north-Eastern Goldfields and comprises granted mining leases and exploration licences covering a total of over 1,200 square kilometres.
APC highlights that the project is a long-life operation of more than 30 years and will be a low capital and high margin SOP producer. The project is the lowest carbon dioxide emitting SOP project development in Australia, with a certified organic product and a high-penetration hybrid renewable power solution.
APC Managing Director and CEO, Matt Shackleton, said he is pleased with the first major step in financing the development. The company now turns its attention to closing out the balance of the development financing pathway, and to moving into the pre-mobilisation phase for the development of the project.
“We now look forward to delivering the results of the FEED study and announcing a FID.”
Key terms of NAIF’s facility:
Facility Amount: $140 million towards the construction and ramp-up of the Lake Wells Sulphate of Potash Project.
Tenor: 17 years.
Amortisation: Interest only until such time as other tranches are repaid. Principal and interest thereafter.
Security: Comprehensive senior security package over assets and rights of the Lake Wells Sulphate of Potash, pari passu with other tranches of the senior secured facility.
Conditions Precedent to Financial Close: The NAIF facility is subject to facility documents being entered into between the parties and satisfaction of customary conditions precedents. These include, but are not limited to:
(i) Conclusion of the Federal Minister’s consideration period as outlined in the NAIF Act 2016;
(ii) Finalisation of the State’s consideration of the Project and its agreement for the approved funds to be advanced;
(iii) All relevant approvals in place to develop the LSOP; and
(iv) Evidence of the balance of development funding being secured.