The HELM offtake contains commercial terms and clauses customary to this type of agreement
Australian Potash is pleased to advise signing of the fourth binding term sheet in the Offtake Program with Tier 1 partner HELM AG (HELM) for the supply of 30,000 tonnes per annum (tpa) of premium K-Brite sulphate of potash from the Lake Wells Sulphate of Potash Project (LSOP).
Managing Director and CEO, Matt Shackleton, commented: “This agreement with Tier 1 international chemicals and fertiliser distributor HELM AG is a defining moment for Australian Potash and the K-BriteTM brand. Our Lake Wells product will be distributed into the lucrative and expanding European fertiliser market through HELM’s dominant brand and market leading position.
“HELM’s clear strategic direction is to expand their value in brand across the world’s major fertiliser markets, and the marketing and distributorship of SOP forms an integral piece in their offering. It is enormously gratifying that APC’s K-Brite brand will be central to that program on the European continent.
“The APC team are progressing rapidly along the Approvals Pathway, with firm dates now agreed with the EPA, and the Financing Program, with parties, including NAIF, moving into due diligence. To that point, and notably, more than 85% of the DFS projected output is now under contracted sale.
“This quarter will be a very active period for the Company and the we look forward to providing updates presently on the development of the Lake Wells SOP project.”
The HELM offtake contains commercial terms and clauses customary to this type of agreement, including the following key terms:
• Pricing based on the market price minus traditional ‘net back’ costs including a marketing fee and ‘flow through’ shipping, storage and handling costs (Net Realised Price)
• Binding agreement to take-or-pay 30,000 tpa of K-BriteTM over an initial 10-year term
• K-BriteTM sales and distribution rights on an exclusive basis to European jurisdictions
• Subject to the finalisation of long-form documentation by 15 September 2020, and the board of APC making a final investment decision by 31 March 2021
Source: Company Press Release