The Kumpupintil Lake (“KP”) Potash Project is located in the Little Sandy Desert, Western Australia, approximately 300 km east of Newman and some 540 km south-east of Port Hedland. Access is via the existing Talawana Track, the historic track completed in 1963 by the so-called Gunbarrel Road Construction Party. 

The Project is made up of >3,000 km2 of granted tenements covering Kumpupintil Lake, a large salt lake with cultural significance to the Martu People, who hold exclusive Native Title Rights over the area.

The Project will provide communities with long-term training, development, employment and small business opportunities over it’s lifetime.

The Project’s Mineral Resource Estimate, carried out in 2015 and updated in 2017, makes it one of the largest high-grade brine SOP resources in the world outside of China. 

Progress to-date

Reward completed a scoping study for the Project early in 2015 and the encouraging results prompted the Company to proceed with additional metallurgical testwork, further operational trials and ongoing environmental impact assessments (the first fauna and flora studies actually commenced as early as 2012).

This phase of Project assessment allowed Reward’s Project team to accurately define the estimated capital and operating costs for the Project by obtaining competitive, detailed quotes on critical areas such as infrastructure development, pond construction, halite and crude potash harvesting and product logistics.

A detailed Pre-Feasibility Study (PFS) was completed in May 2018 by CPC Project Design and subsequently updated with further enhancements later that year. The results of the PFS vindicated Reward’s confidence in progressing the Project, as the results demonstrated that Kumpupintil Lake could become one of the largest, longest life brine SOP producers in the world outside of China.

Apart from the PFS a number of other milestones have been accomplished in recent years, including:

  • The completion of a major infill drilling program at the end of 2018, with pumping trials now required to finalise a resource update;
  • All environmental studies required to support the environmental approval processes at state and federal level have been completed;
  • State environmental approval was achieved in June 2020;
  • Commonwealth environmental approval under the EPBC Act is entering its final phase;
  • Alternative flowsheets and operational strategies continue to be assessed internally.

Project Advantages

Despite the road distance to port, Kumpupintil Lake’s Western Australian location is a key advantage as it is critical for long-life resource projects to be located in stable mining jurisdictions.

The choice of Port Hedland as the Project’s preferred export port is also important, as it places its product within easy reach of the major SOP growth markets of South-East Asia and (in the future) India. The east coast of Africa, Europe and even the west coast of the USA, are also not discounted as potential markets for Kumpupintil Lake’s environmentally sustainable, premium quality, organically certifiable sulphate of potash fertiliser which will be produced predominantly by using abundant, renewable solar energy.

There is also the potential to produce other products as the brine contains excess sulphate and a similar amount of magnesium (to potassium) as well as an abundance of sodium chloride (salt).

The results of the PFS demonstrated conclusively that the Project has the potential to be both technically robust and commercially attractive with sustainable margins, despite the application of the industry’s most conservative economic assumptions. In summary, the PFS demonstrated:

  • A shallow, trench-only operation would exploit less than 10% of the total current drainable resource over a 20-year timeframe;
  • An annual production rate of 400,000 tonnes with potential to significantly extend the life-of-mine given the size of the resource;
  • Total capital A$451M including indirects and owners’ costs as well as a A$60M contingency and A$46M in pre-production working capital;
  • Life of mine All-in Sustaining Cost (“AISC”) of A$376/tonne SOP FOB Port Hedland using quad road trains to transport product from site;
  • Cash Cost of A$335/tonne SOP FOB Port Hedland – lowest quartile cost when compared to existing global SOP producers;
  • An attractive EBITDA of 44.6%, which delivers a Post-tax NPV of $292.8M, discounted at a real rate of 8%;
  • LOM revenue approaching $6 billion with a payback period of 5.7 years;
  • Societal benefits of approximately $964M, made up of:
    • Royalties of $63.2M to the Martu traditional owners;
    • State Royalties of $225M; and
    • $676M in nominal corporate tax payments to the Commonwealth; as well as
    • The creation of 200 direct long-term jobs (excluding product haulage and ship loading), with a significant number of site personnel expected to come from the nearby indigenous communities.

Multiple value improvement opportunities continue to be investigated, such as by-product production, flowsheet enhancements and alternative operational strategies.