Kalium Lakes (ASX:KLL) has agreed on revised arrangements with engineering and design firm Ebtec in relation to the company’s sulphate of potash (SOP) purification plant at its Beyondie SOP Mine.
The company reports new arrangements provide for a settlement and release of potential claims from either party in relation to the existing EPS services agreement for the design and engineering of Kalium Lakes’ SOP Plant, which also incorporates Kalium Lakes receiving supply and title to the 2 heat exchangers recently added to the SOP Plant
As part of the arrangement, Kalium Lakes and Ebtec have also entered into the services agreement for continued technical services by Ebtec, both on-site and from Germany, in order to achieve the production ramp up at Beyondie.
Addressing the agreement, Ebtec Managing Partner Markus Pfänder says: “This agreement builds on our work to date with a defined pathway forward. We remain confident in achieving the SOP plant’s design parameters and continue to work very closely with Kalium Lakes to ensure the success of Beyondie.”
The settlement arrangement is in lieu of the performance guarantees provided by Ebtec for the operation of the SOP plant and includes a two-way release from any claims in connection with the original EPS services agreement for the design, engineering, supply, and commissioning of equipment for the SOP Plant at Beyondie.
Under the terms of the settlement arrangement reached Kalium Lakes has received a net cash amount of about €1.74 million ($2.8 million) from Ebtec. In order to facilitate this receipt, the company’s senior lenders, Northern Australia Infrastructure Facility (NAIF) and KfW IPEX Bank, have approved a drawdown of the remaining part of KfW Facility A of about €1.217 million. This, under the original EPS Services agreement, was to be used for final payments to Ebtec but as part of the settlement arrangement has been received by Ebtec and paid on to Kalium Lakes.
“We are focused on our production ramp up and achieving nameplate capacity of the Beyondie SOP Plant as soon as possible…”
Addressing the agreements, Kalium Lakes’ acting Chief Executive Officer Jason Morin adds: “We are focused on our production ramp up and achieving nameplate capacity of the Beyondie SOP Plant as soon as possible, and now with commercial clarity in our relationship with Ebtec both parties will continue to drive towards that goal.”
Kalium Lakes reports performance incentives to Ebtec have also been revised, with €250,000 set aside from the KfW Facility A drawdown and to be placed into escrow, payable to Ebtec upon the SOP Plant achieving a simplified performance test, being the SOP production output equivalent to the minimum performance specification set out in the original EPS Services agreement.
This escrowed €250,000 is separate from the net €1.74 million cash settlement received by Kalium Lakes. Furthermore, jus over 17.677 million performance rights will today (24 July 2023) be issued to Ebtec, which are convertible into fully paid ordinary shares in Kalium Lakes for nil consideration upon the SOP plant achieving the simplified performance test.
Write to Adam Orlando at Mining.com.au
Images: Kalium Lakes Ltd
