Utah sulfate potash mine to yield 26.4 million tons
Potash Ridge, a Canadian based exploration and development company, is heavily investing in a sulfate of potash (SOP) and alumina rich mining site in Utah known as the Blawn Mountain Project, and the corporation announced it has completed an independent pre-feasibility study that is highly positive for continued investment.
The operation is being planned to cover approximately 15,404 acres of state-owned land in a “mining friendly jurisdiction with established infrastructure nearby.”
Potash Ridge’s recent financial report shows that the corporation is investing heavily up front for a long-term positive return. The corporation had a third quarter loss of nearly $2 million, even larger than its third quarter loss of 2012; the recent loss was attributed to the “pre-feasibility study costs, permitting activities and metallurgical test work.”
The pre-feasibility study provided insight on potential operations. The expected surface mining operation could yield 770,000 tons of SOP per annum during the first 10 years of operation after a two-year ramp up. The estimate is for an average mining of 645,000 tons of SOP per annum over the 40-year lifetime of mining, although the “life of operations” could be increased with “two additional zones of known mineralization.”
“Over the life of the project, a total of 26.4 million tons of SOP and 59 million tons of sulphuric acid is planned to be produced,” the report noted.
Using its own projected selling price for potash and the co-product of sulfuric acid in the coming years, the pre-feasibility report suggests “cash flow from operations of $234 million per annum excluding the two-year ramp up period.”
Guy Bentinck, CEO, reportedly said, “In recent months, the North American SOP market dynamics have demonstrated strong long-term fundamentals.” This would suggest that the soft market for potash in the second half of 2013 and early 2014 is considered a small blip in projected prices.
The pre-feasibility study was based on the mining site construction commencing in late 2015. After construction and two-years of start-up, the mining operation would then be in full production with approximately 500 employees in 2019.
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