INSOLVENT Sulphate of Potash (SoP) fertiliser company SO4 is yet to answer queries by the Australian Securities Exchange (ASX) about the veracity of market information it released earlier this year.
With SO4 and its eight associated companies in voluntary administration as of last week and appointed receivers and managers KordaMentha seeking expressions of interest from prospective buyers for its almost-completed SoP fertiliser project at Lake Way near Wiluna, the ASX has released a query it sent on August 2 to former SO4 company secretary Matthew Worner.
An ASX spokesperson confirmed this week it was still awaiting an answer.
The formal query by ASX listings compliance manager Dave Allen asked SO4 to respond to 12 questions about statements it had made via the ASX since May 21 when it first asked for a temporary trading halt in its shares.
SO4 shares have not traded since a subsequent halt request on July 27.
One of the query questions related to a five cent dip in SO4's share price between May and July.
Other questions related to statements the Lake Way project would begin production of SoP fertiliser in June, with the first commercial sales "shortly thereafter" and statements that a $28 million institutional share placement in May had enable SO4 to access a final US$33m ($44m) tranche of a US$138m ($184m) syndicated debt funding facility which supposedly "significantly de-risked" the project.
The query also asked SO4 to elaborate on when it first became aware some of the announced ramp-up to production milestones would not be achieved on time and that it would need to raise additional funds this year to complete the $264m project at Lake Way.
As previously reported in Farm Weekly, SO4 announced on July 29 it would need to raise additional funds before the end of the year to "continue operations" at Lake Way.
It announced it would suspend its processing plant feed program for 10-14 weeks after an initial production run, to enable slower-than-expected harvest salts build-up at the end of its evaporation pond system which it said was likely to cut next financial year's proposed SoP fertiliser production almost in half.
SO4 also announced unexpected variability in the potassium levels in harvest salts would need to be addressed by changes to the "methodology" and that it had "declassified" some 29,000 tonnes of stockpiled harvest salts as "unsuitable" for fertiliser production.
That announcement was followed by a change of management of SO4 which, since its move to Lake Way in 2018, had been run by a team largely comprising former Fortescue Mining Group iron ore miners.
On August 12 SO4 announced Bruce Franzen had replaced Mr Worner as company secretary and on August 27 it announced Tony Swiericzuk had resigned as chief executive officer but would remain a director.
Mr Swiericzuk was replaced as CEO on September 13 by Isak Buitendag.
Earlier, on July 15, SO4 had announced a new chief financial officer in Stuart Fraser and on June 22 Rebecca Morgan was appointed a director to replace Bryn Jones who stepped down on May 4.
The company's latest financial report showed it raised $200.5m from six equity capital raisings, but had a net operating loss of $5.3m last financial year.
At one point earlier this year, it seemed SO4 would be the first of six Perth-based companies proposing to produce SoP fertiliser from potassium-rich remote salt-lake brine, to achieve commercial production and create a new export industry for Western Australia.
It seemed the 2018 gamble to move the prospective SoP project from Lake Wells, 160 kilometres north-east of Laverton where it shared the lake with another prospective SoP fertiliser producer Australian Potash, to Lake Way 15km south of Wiluna, would pay off with a production first and pick of the domestic and international SoP markets.
SO4 had fast-tracked its project at Lake Way by using potassium brine that had seeped into the former Williamson open-cut gold mine pit on the lake to set up its trial evaporation pond trains on existing mining leases held by Blackham Resources which operates as Wiluna Mining Corporation.
But the brine collected from beneath Lake Way by its own subsequent channels through the salt and its production evaporation ponds seems not to have produced the same consistency in harvest salts that had been available when dewatering the Williamson pit.
KordaMentha receivers and managers Richard Tucker and Craig Shepard said in an ASX statement on Wednesday last week they were "conducting an urgent assessment of (SO4's) financial position as operations continue as usual".
They will "commence a process to market the company and its assets for sale and recapitalisation opportunities in the coming weeks", the announcement said.
It was recommended "interested parties" should contact KordaMentha to lodge an expression of interest.
Kalium Lakes with its Beyondie project 160km south-east of Newman, now seems likely to be the first to produce commercial SoP fertiliser by processing salts harvested from evaporated salt-lake brine, before the end of this year.
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