South Harz Potash has secured binding commitments for a placement of A$1.03m ($670,000), with a further A$2.97m proposed through a rights issue.

The combined equity raise of up to A$4m is aimed at advancing the development of brownfield Ohmgebirge potash project and the acquisition of the Sollstedt mine in Germany.

The placement includes an investment by South Harz directors, with a total of 40,116,690 shares allocated to them.

The placement terms stipulate the issuance of 103,000,000 shares at A$0.01 each, amounting to A$1.03m before costs.

Of these, 40,116,690 shares are director placement shares, pending shareholder approval, and the remaining 62,883,310 shares will be issued under the company’s existing Australian Securities Exchange (ASX) Listing Rule 7.1A placement capacity on 8 August 2024.

Martin Place Securities has been appointed as the lead manager and bookrunner for the placement and rights issue.

The funds raised will support due diligence for the acquisition of the Sollstedt mine property in Germany from Deusa International, as well as undertake value engineering, and optimisation studies for the Ohmgebirge Potash Development.

It will also be used by South Harz Potash for evaluating strategic alternatives for a definitive feasibility study and as general working capital.

South Harz executive chairman Len Jubber said: “Following the recent favourable Spatial Planning Assessment, we are well positioned to advance Ohmgebirge in a cost-effective manner, optimising its potential into a strengthening potash market.”

South Harz’ flagship project is located in the South Harz Potash District region of Germany.

The South Harz project has a JORC (2012) mineral resource estimate of 5.1 billion tonnes at 10.6% potassium oxide (K2O) of inferred resources and 258 million tonnes at 13.2% K2O of indicated resources.