Potash Ridge Corporation provided an update on its corporate activities. Potash Ridge's strategy is to become a premier producer of sulphate of potash ("SOP") in North America. The Corporation owns two SOP projects: the Valleyfield Project in Quebec ("Valleyfield") that plans to produce SOP through the Mannheim Process; and the Blawn Mountain Project in Utah ("Blawn Mountain") that plans to produce SOP by processing an alunite material.
SOP is the world's most popular low-chloride fertilizer. It is beneficial to soils and plants and is considered one of the world´s most important specialty potash fertilizers. Combining potassium and sulphur, SOP provides a high concentration of nutrients for plants. Its low chloride content makes it the ideal potash-based fertilizer for high value crops, and for soils at risk to salinity.
SOP improves crop yield and quality, increases resistance to drought, frost, pests and disease. SOP also improves a crop's nutritional value, taste and appearance and adds to durability during transportation and storage.
Global consumption of SOP is approximately 5,000,000 tonnes per year, and is expected to double over the next 4 years. The Company views it's North American target market as under-supplied, with only one domestic supplier currently serving the bulk of this market. SOP prices in North America are approximately U.S.$900 per tonne.
Following completion of a capital raise in November 2015, the Corporation engaged SNC-Lavalin to conduct a capital and operating expenditure budget study for Valleyfield. Valleyfield's strategy is to become the first sulphate of potash ("SOP") producer in North America utilizing the proven Mannheim process. The Mannheim process is used in Europe and Asia, and currently accounts for approximately 30% of the world's SOP supply.
SNC-Lavalin's engineering study will contemplate a first phase of construction of 40,000 tonnes per annum of SOP to an accuracy within +/- 30%. It is anticipated that SNC-Lavalin's engineering study will be finalized before the end of March 2016.
The Corporation has signed a Memorandum of Understanding with a third party for the offtake of its by-product hydrochloric acid ("HCL"), and is in discussions with the same company with respect to them building and operating the HCL processing facilities.
Following completion of SNC-Lavalin's engineering study, and subject to raising the necessary capital, the Corporation intends to work towards obtaining the required environmental permit, entering into SOP offtake arrangements, and ordering long lead-time equipment, with a target of beginning construction this year and commencing production in 2017.
The Corporation also remains focused on advancing Blawn Mountain. With all major permits already in place and a 40-year reserve life, Blawn Mountain expects to become one of the world's lowest cost producers of SOP once operational.
The Corporation is currently assessing the potential for commencing production at Blawn Mountain at a smaller scale than the 640,000 tons per annum production rate contemplated in the Prefeasibility 43-101 Technical Report issued on December 3, 2014. This includes assessing modification to the front end processing of the ore that could be possible as result of the lower production level, and that could potentially have a positive impact on capital and operating costs.
Subject to raising sufficient capital, the Corporation intends to undertake an engineering study to assess this phased approach.