The take-or-pay contract was signed with Sydney-based distributor Redox and involves pricing based on a "net realised price basis incentivising Redox to achieve the highest sales price in the market".

Australian Potash said discussions were well advanced with other offtake partners.

The company is also working on finding the funding for Lake Wells.

Australian Potash completed a definitive feasibility study last August that outlined a A$208 million development with a net present value of $665 million (pre-tax) and an internal rate of return of 25%.

Australian Potash shares were up 8% to 6.5c in morning trade, capitalising the company at $26 million.

That compares with ASX potash peers such as the $122 million-capitalised Salt Lake Potash, which last month said it had secured offtake agreements for 224,000t of the 245,000t it plans to produce at its Lake Way project.

Another peer, Kalium Lakes, is capitalised at about $200 million, with it having all of its first 10 years of production accounted-for.

However, Kalium is in a trading halt related to "an independent review of the company's capital expenditure costings and contingencies for its Beyondie project and future financing requirements", with the partly developed project previously expected to cost $216 million.