South Harz Raises A$2.2M, Progresses Sollstedt Mine Deal and Project Funding
South Harz Potash Limited has made significant strides in acquiring the Sollstedt mine and secured approximately A$2.2 million in new equity, positioning itself to advance the Ohmgebirge project amid a strengthening potash market.
- Progress on Sollstedt mine acquisition with exclusivity until February 2025
- Raised A$2.2 million through equity placements including director participation
- Engaged Cutfield Freeman & Co for project development funding and strategic partnerships
- Ongoing project optimisation with Valleyspring consultancy and regulatory permitting advances
- Deferred creditor payments to extend funding runway and reduce overhead costs
Strategic Acquisition Progress
South Harz Potash Limited (ASX:SHP) has reported notable progress in its December 2024 quarterly activities, centering on the acquisition of the Sollstedt mine property from Deusa International GmbH. The company is deep into due diligence and negotiating detailed terms, with a binding exclusivity period secured until 28 February 2025. Sollstedt’s substantial existing shaft infrastructure and underground workings present a valuable brownfield opportunity to complement South Harz’s flagship Ohmgebirge project.
Capital Raising and Financial Position
During the quarter, South Harz successfully raised approximately A$2.2 million in new equity from both existing and new sophisticated investors. This capital raising included a placement of over 45 million shares to directors following shareholder approval at the November AGM, reflecting strong internal confidence. Despite the capital injection, the company’s cash balance stood at a modest A$621,000 at quarter-end, underscoring the importance of ongoing funding initiatives.
Funding Pathways and Strategic Partnerships
Post-quarter, South Harz appointed specialist mining finance advisor Cutfield Freeman & Co to explore project development funding pathways. This move signals a proactive approach to securing strategic partnerships and advancing the Ohmgebirge project to the definitive feasibility stage and beyond. The company’s focus on identifying partners aligns with its broader strategy to enhance project economics and leverage regional infrastructure advantages.
Project Optimisation and Regulatory Progress
South Harz engaged Valleyspring Pty Ltd to conduct a desktop review of value engineering opportunities, including a staged development model utilizing the Sollstedt shafts. This optimisation work is expected to conclude in the March 2025 quarter. Meanwhile, regulatory permitting is advancing, with Stage 2 preparatory activities underway following the earlier grant of the Spatial Planning Assessment. Environmental baseline studies have been completed to support the forthcoming Environmental Impact Assessment.
Operational and Stakeholder Developments
The company continues to reduce overhead expenditure and has deferred creditor payments totaling approximately €785,000, extending repayment terms to the end of 2026 with interest. This financial prudence creates a two-year window to focus on project development. Engagement with German stakeholders remains robust, with positive feedback from investor site visits and constructive dialogues with newly elected local government officials, reinforcing community and political support.
Bottom Line?
South Harz’s strategic moves and capital management set the stage for critical developments in the Ohmgebirge project’s next phase.
Questions in the middle?
- Will the Sollstedt acquisition close successfully before the exclusivity deadline?
- How will South Harz secure sufficient funding beyond the current capital raise to sustain development?
- What impact will German regulatory and community engagement have on project timelines?
