The southeast New Mexico site that has been discovered to contain huge deposits of polyhalite for the production of high-quality potash products is moving ahead, IC Potash Corporation reported with an end of 2012 report. The company is hopeful that all the regulatory hurdles can be jumped so that approval to start mine construction can begin by the end of the first quarter of 2014.
"Without question, 2012 has proven to be a very exciting year for our company during which time we accomplished several mission-critical operational goals and objectives. We have materially advanced development of our Ochoa Polyhalite Project and notably enhanced ICP's prospect of future leadership in the global market for superior-quality, high-performance specialty potash products, said Sidney Himmel, President and CEO of IC Potash Corp.
As 2012 began a pre-feasibility study for production at a yet to be established potash products mine in southeast New Mexico showed several positives, and progress toward opening a mine proceeded well during 2012. Project highlights from the pre-feasibility study included:
- Annual production at full capacity of 843,000 tons composed of 568,000 tons of sulphate of potash (SOP) and 275,000 tons of sulphate of potash magnesium (SOPM);
- Operating cost of $147 per ton of SOP and SOPM;
- Projected full-capacity capital cost of $706 million;
- 139 million tons of recoverable potash reserves in the proven and probable ore category within the ICP 40-year mine plan, and an additional 205 million tons of recoverable potash reserves in the mine plan area not included in the 40-year economic model;
- Underground mining rate varies with mine grade, with an average planned production rate of 3.5 million tons of ore per year, at an average concentration ratio of 4.15:1; and
- Average metallurgical recovery estimated at 90 percent.
Off-Take Agreement with Yara International ASA
"This past spring, Norway-based Yara International ASA, one of the world's leading chemical companies and the number-one global supplier of mineral fertilizers, made a $40-million equity investment in ICP at a premium to market price of $1.32 per common share. In addition, Yara committed to a 15-year off-take agreement to purchase 30 percent of all products produced by our Ochoa Polyhalite Project in New Mexico at fair market value,” noted Himmel.
In mid-summer, ICP announced the team of consultants who would conduct a feasibility study on the Ochoa Polyhalite Project that goes beyond the pre-feasibility study. ICP's feasibility study is expected to be completed on or before August 31, 2013.
Currently ICP is conducting geotechnical tests on Ochoa core samples to determine mine design criteria. The company submitted its geotechnical testing program work plan to the U.S. Bureau of Land Management and received approval in November to conduct geotechnical testing to provide data on subsurface soil, rock and groundwater conditions in key structure locations where the ICP mining and processing facilities will be constructed.
Environmental Permitting of Ochoa Polyhalite Project Site
"In early 2012, the U.S. Department of the Interior, Bureau of Land Management (BLM) commenced the formal public scoping process for the Ochoa Polyhalite Project in connection with ICP's preparation of the Environmental Impact Study (EIS) required by the BLM to make a decision regarding the award of permits for the construction and operation of ICP's proposed Polyhalite Mine and Processing Plant,” Himmel further explained.
In September, following a 30-day aquifer drawdown test conducted by feasibility study team members, ICP announced the successful completion of hydraulic optimization studies using two of the company's permitted groundwater supply wells at the Ochoa Polyhalite Project site. The studies demonstrated the desired pumping capacity of these two wells and confirmed the aquifer's suitability to provide the project with a high-yield, sustainable supply of non-potable, brackish water that will not compete with the surrounding communities' use of fresh water. The final regulatory assessment of the water supply and the proposed pumping plan is being evaluated by the BLM and the New Mexico Office of the State Engineer for permitting purposes, the company explained.
"Based on our current Project development schedule, we remain on pace to submit the draft EIS to the BLM for final review in late 2013. Notwithstanding any unforeseen delays, BLM clearance to proceed with construction of the mine and processing plant is expected to be granted prior to the end of March 2014,” said Himmel.
The CEO was also glad to report, "Last month, ICP successfully performed a batch scale test on five critical processing operations, effectively implementing end-to-end processing of polyhalite from its Ochoa Polyhalite Project, producing 52 percent K2O-grade SOP.”