Monday 17th June 2019

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Posts tagged ‘Western Potash Corp (WPX)’

Western Potash VP of corporate finance Patrick Power explains how his company came to hold claims over a Rio Tinto “Tier 1” project in Saskatchewan

May 8th, 2014

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Generating opportunity

April 17th, 2014

Prospect generator Zimtu Capital works with multiple companies to minimize risk, maximize potential

by Greg Klein

Diamonds, gold, graphite.

Fluorspar, tantalum, niobium.

Potash, rare earths, silica sand and silver—the list goes on. They add up to a cornucopia of commodities, opportunities and risk. The projects range from early prospects to pre-development. Managing all that is the work of Zimtu Capital TSXV:ZC, a prospect generator whose business model differs not only from explorers but from other prospect generators.

It’s an approach not all investors are familiar with, according to director Ryan Fletcher. “But people who’ve been through the ups and downs of two or three market cycles understand it, invest in it and support it,” he tells ResourceClips.com.

The basic exploration model, Fletcher points out, involves finding a good prospect, building a team and diluting shares to raise money while searching for a discovery. “The potential can be huge but the odds are against you,” he says.

Prospect generator Zimtu Capital works with multiple companies to minimize risk, maximize potential

“The prospect generator takes a different approach, using a team that’s not only skilled in identifying opportunities but also in creating value either through joint ventures or by vending properties to other companies and getting an interest in shares, cash or royalties.”

The advantage to investors is exposure to multiple projects, companies and commodities. “But you don’t have the expense of exploration, which is typically funded through dilution. Most prospect generators on average have a higher chance of success and they’re able to maintain their share structures.”

“We demonstrate that at Zimtu,” he continues. “We have an advantageous share structure of about 11.2 million shares. We generate projects, sometimes ourselves but typically with partners. Those partners are different firms, prospectors or other individuals who find properties for our team. We give our shareholders exposure to those prospects but we also help build companies, sometimes seeding them. And in doing that, we give our shareholders early exposure that they couldn’t otherwise get.”

“That’s one thing that distinguishes us from other prospect generators,” Fletcher emphasizes. “We’re very creative and flexible in how we get involved. Sometimes we’re involved as a seed shareholder. Normally the public is cut out of the pre-IPO or seed stage. Zimtu can provide exposure to opportunities that usually exclude the public.”

The company also generates revenue from management, marketing and corporate development services for issuers, he adds.

Another Zimtu distinction is the company’s long-term vision for its holdings. “We get involved early but stay on for a successful outcome like a merger, acquisition, takeover or production. That’s a multi-year process to support and sustain a company.”

Altogether Zimtu has a stake in nearly 50 companies, although its core holdings number about a dozen. Fletcher cites two of them to provide different examples of how Zimtu helps support companies.

Western Potash TSX:WPX began with a group who saw opportunity in the fertilizer market but needed money to acquire their first project in Manitoba. “So Zimtu wrote a seed check for around $200,000, others came in and about a year later it IPO’d for $20 million at a dollar,” he says. “The first project didn’t get the results they wanted, but then they moved into Saskatchewan. They’ve taken their Milestone potash project all the way to full feasibility. It’s fully permitted and they’ve brought on CBC (Canada) Holding Corp as an equity and offtake partner. Western’s board and team have evolved as the company has developed. Western operates independently but we collaborate a lot. The company’s been about as successful as you can get—the next thing they need to be ultimately successful is to have someone fund them to production or take them over.”

More recently Zimtu has backed Lakeland Resources’ (TSXV:LK) foray into the Athabasca Basin. “When we started it was trading at three cents. The concept was to get into uranium while it’s undervalued. Lakeland transformed its board, added an expert advisory team, raised $4 million in the last 12 months and acquired 16 properties. We’ve seen Western develop over the last five years and Lakeland will be a lot different five years from now.”

We get involved early but stay on for a successful outcome like a merger, acquisition, takeover or production.—Zimtu Capital director
Ryan Fletcher

The relationships are reciprocal. Zimtu benefits from the experience and expertise of the companies it helps build. Zimtu also has “well over a decade-long relationship” with Dahrouge Geological Consulting, a group that’s been involved in several high-profile discoveries. “Sometimes they manage projects within our portfolio, sometimes we generate targets together with them,” explains Fletcher. “We also have relationships with independent prospectors and geologists and other consulting firms. But certainly the strongest and longest has been with Dahrouge.”

In late March Zimtu created a new advisory board with three initial appointments: mine developer and metallurgist Michel Robert, project generation and exploration geologist Ian Graham and project management and exploration specialist Jenna Hardy. “They’ve always been supporters of our organization and believers in what we do,” Fletcher says. “They’re experts in their fields, which basically cover everything from the beginning of exploration through to production. We wanted to formalize the relationship by bringing them on as advisers.”

In a venture market that offers potentially high return at the cost of high risk, Fletcher sees a compelling case for Zimtu. “You get exposure to diverse companies, projects and areas of the market that you normally wouldn’t get as an independent investor,” he says. “If you invest in Zimtu you’re not investing in one commodity, one jurisdiction, one stage of project. You’ve got more chances of upside and more chances to protect you on the downside.”

Disclaimer: Zimtu Capital Corp, Western Potash Corp and Lakeland Resources Inc are clients of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in those companies.

Who owns Rio’s Tier 1 project?

April 10th, 2014

It’s a world-class resource, says a Rio/Russian JV. But part of it’s held by Western Potash

by Greg Klein

It’s a world-class resource, says a Rio/Russian JV. But part of it’s held by Western Potash

 

Rio Tinto NYE:RIO rates the southeastern Saskatchewan potash project “Tier 1,” one of eight such discoveries the global giant has made over the past 10 years. Last month’s announcement sparked media interest in KP 405, the company’s joint venture with North Atlantic Potash, a subsidiary of one of the world’s largest mineral fertilizer producers. But how much of KP 405’s resource—if it can be called a resource—does the JV actually control? North Atlantic hasn’t responded and Rio’s not talking, but next-door neighbour Western Potash TSX:WPX certainly is. The company maintains it owns rights to a sizeable portion of KP 405.

Western Potash holds the adjacent Milestone project, which reached full feasibility in December 2012 and final environmental approval in April 2013. Western Potash also holds rights to roughly a third of KP 405’s freehold land in what VP of corporate finance Patrick Power calls “a checkerboard pattern.” According to an April 10 news release, Western Potash has leased freehold potash mineral rights for 100% of 20,523 hectares on 46 parcels of land, and less than 100% on 3,588 hectares on 49 parcels, for a total of 24,111 hectares within KP 405. The leases run for 10 years from their execution date with an optional 10-year extension.

“It’s happened before with companies, usually smaller, not Rio Tinto-sized companies,” Power tells ResourceClips.com. “They forget that when you’re granted Crown ground in this part of the world, you still need rights to the freehold. It’s on a checkerboard basis. It’s almost impossible to mine that without having an agreement with us or taking us over. Those are the two options they have. The other is to back away.”

It’s a world-class resource, says a Rio/Russian JV. But part of it’s held by Western Potash

The Rio Tinto/North Atlantic “Tier 1” project
is overlain by Western Potash holdings.

A Saskatchewan government official says, “I wouldn’t be surprised to hear that one potash company owns mineral rights in another potash company’s area.” Executive director of Lands and Mineral Tenure for Saskatchewan’s Ministry of the Economy Doug MacKnight explains, “When the land was first being settled the railway got some mineral rights, the Hudson’s Bay Company got some mineral rights and the early homesteaders got some mineral rights. Throughout southern Saskatchewan about 15% to 20% of the mineral rights are privately owned, but it’s not an even distribution.”

“Especially in that area of Saskatchewan, you’re going to get a mix of Crown and freehold ownership and it’s not in a contiguous block. It’s in a checkerboard pattern. So it would not surprise me in the least that one company could hold the potash rights from the Crown in a township and other private owners may have a variety of private rights.”

But if Rio and North Atlantic don’t hold all of KP 405, do they have a resource? North Atlantic, a subsidiary of Russian fertilizer giant JS Acron, announced KP 405’s “world-class potash resource” in early December. That report wasn’t distributed in Canada or Australia but in March Rio released its 2013 Strategic Report listing eight Tier 1 discoveries since 2004. That’s when KP 405 came to the attention of Canadian and Australian media.

North Atlantic outlines its “resource” as an inferred 1.4 billion tonnes of potash averaging 31% potassium chloride (KCl). The company doesn’t refer to an NI 43-101 report, although a “resource summary” states that a qualified person “has certified that the report contains all substantive information that would be required to be included in a 43-101 report.” Anyone wanting further details must sign a non-disclosure agreement for “access to the original exploration data and resources report,” North Atlantic states.

Making what might be considered a rather bold statement for an inferred category, North Atlantic also states “the current resource could support an operation for many years.”

The document adds, “The mineral tenure is secured as both Crown rights and agreements with freehold owners of mineral rights.”

Western Potash, however, has produced a map showing otherwise. Power speculates that Rio didn’t learn about the mixed ownership until after it teamed up with North Atlantic in 2011. “Rio’s been drilling on quarter sections that they own, literally metres from our properties.” But the minerals below can hardly be mined in quarter sections, he points out.

MacKnight emphasizes that mixed ownership doesn’t prevent mining. “You just have to deal with the owners. If you want to produce it you have to negotiate it…. Historically it has not been an impediment. Everybody’s interested in seeing mines built.”

By press time Rio’s principal adviser for media relations Bruce Tobin and North Atlantic CEO David Waugh had not replied to interview requests.

Disclaimer: Western Potash Corp is a client of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in Western Potash.

Potash in perspective

February 21st, 2014

The long-term outlook and an advanced-stage project bring Asian interest to Western Potash

by Greg Klein

The long-term outlook and an advanced-stage project bring Asian interest to Western Potash

As the world’s population grows, arable land shrinks, causing greater demand for fertilizer.

 

It’s an opportunity best characterized as “a marathon, not a sprint.” That’s how Western Potash TSX:WPX VP of corporate development John Costigan refers to his company’s Milestone project. The high-grade potash solution mine proposed for southern Saskatchewan achieved full feasibility in December 2012 and final environmental approval last April. Then came tumultuous times, with what Costigan calls the “Russian-Belarusian debacle” that took down the commodity’s price. Now, with solid Asian investment and indications of a market revival, the advanced-stage project might be seen as an early-stage opportunity emerging anew.

Understandably, enthusiasm for potash plunged with the price following Uralkali’s breakup with cartel partner Belaruskali last summer. Late last year, however, JP Morgan pronounced a more optimistic outlook for 2014. By January analysts were saying prices might have bottomed in the Chinese contracts signed by Uralkali and Canpotex, the marketing arm of PotashCorp TSX:POT, Agrium TSX:AGU and Mosaic NYE:MOS.

More recent news suggests funding’s picking up. On February 18 Verde Potash TSX:NPK reported significant progress in its application for US$105 million in loans, grants and investment from the Brazilian government for the company’s Cerrado Verde project. Six days earlier came news that fertilizer giant ICL was buying a $25-million stake in Allana Potash TSX:AAA, with potential up to $84 million, along with an offtake agreement for the company’s Danakhil project in Ethiopia. Last June Western got a $31.98-million cash injection from a Chinese joint venture.

The attraction was the full-feas, fully permitted Milestone. The operation calls for solution mining, in which water is pumped into underground caverns and then retrieved as potash-rich brine. A relatively simple but highly effective technique, solution mining would allow Western to build the greenfield operation in about 40 months.

The long-term outlook and an advanced-stage project bring Asian interest to Western Potash

Just 60 kilometres away the same approach is being taken by the giant K+S Group. Now under construction, the Legacy project is scheduled to begin potash solution mining in 2016.

Milestone benefits from Saskatchewan’s mining-friendly policies and rich infrastructure. Two continental railways pass through the 35,400-hectare property, as do roads, power and gas lines. An agreement with the city of Regina, 30 kilometres away, provides a supply of treated waste water to extract the potash—enough water, in fact, to flush out 2.8 million tonnes per year for the mine’s projected 40-year life.

Those benefits have already attracted a $31.98-million investment from CBC (Canada) Holding Corp, a JV comprised of fertilizer producer China BlueChemical and Benewood Holdings, a subsidiary of the Hong Kong investment firm Guoxin International Investment Corp. The deal comes with a 20-year offtake agreement for the lesser of 30% of Milestone’s production or a million tonnes a year.

With a 19.9% stake in Western, CBCHC plays an active role in the strategic alliance. One China BlueChemical appointee serves on Western’s board and another acts as an observer. The alliance has struck two six-person committees, one to study Milestone’s technical, construction and procurement details and another to recommend financing strategies, meet potential financiers and evaluate proposals.

The alliance brings technical synergies. It also offers potential financial flexibility that could help the junior put together the $2.91-billion capex—a considerable sum but substantially less than K+S is spending 60 kilometres away. One possible Milestone scenario could involve Chinese investment banks which, Costigan points out, can structure finance agreements with a 3:1 debt-to-equity ratio. With one or more additional partners, Western could make the transition to a potash producer.

The company already has mining expertise, most notably with project director Richard Lock. In fact his career has been based on projects much more challenging than a southern Saskatchewan solution mine. While with Rio Tinto NYE:RIO, Lock took the Northwest Territories’ Diavik diamond mine from exploration to production. Among other accomplishments, he also acted as project director for Arizona’s Resolution project, now in pre-feasibility and potentially North America’s largest copper mine.

As for potential partners, discussions have picked up, Costigan says. “There’s renewed interest now. People think the market has settled. If we see prices rise, there’ll be even greater interest.”

The commodity’s long-term fundamentals remain strong, he says. Nothing’s stopping population growth. Meanwhile the global decline of arable land calls for ever-higher crop yields.

“Look at the growth in Chinese potash consumption—it’s definitely why our partners came in,” Costigan says. “They recognize they’re going to see big increases in their consumption. China’s ramping up their domestic supplies, they’re in Thailand, Africa, Kazakhstan. But when you look at the projects out there, there’s nothing that compares with Milestone for volume, quality, cost, location, infrastructure and political stability. There’s nothing that compares globally.”

Athabasca Basin and beyond

June 22nd, 2013

Uranium news from Saskatchewan and elsewhere for June 15 to 21, 2013

by Greg Klein

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NexGen drills Radio, prepares for Rook 1 geophysics

No longer virgin territory, NexGen Energy’s TSXV:NXE eastside Athabasca Basin Radio property is now undergoing its first-ever drill program. In a June 20 release, the company said a 4,000-metre campaign had begun on its flagship project adjacent to and about two kilometres on trend from Rio Tinto’s Roughrider deposit, which hosts 17.2 million pounds uranium oxide (U3O8) indicated and 40.7 million pounds inferred.

The program will test interpreted geophysical anomalies along strike with the Roughrider deposits through the interpreted shear zone towards Radio’s centre, NexGen stated. Drilling began three weeks ahead of schedule and, depending on ground conditions, could continue to late July. NexGen holds a 70% earn-in on the 847-hectare property, with an option to earn the other 30% subject to a 2% NSR.

Also on NexGen’s agenda is a soon-to-begin DC resistivity survey on the southern part of Rook 1, adjacent to the northeast of, and along strike with, the Patterson Lake South project of Alpha Minerals TSXV:AMW and Fission Uranium TSXV:FCU. Repeated high-grade, near-surface results from the 50/50 joint venture drew other explorers into the PLS area near the Basin’s southwestern rim. NexGen’s survey is intended to identify targets for a 1,500-metre program planned to begin in August.

Two conductive anomalies found on Aldrin Resource’s Triple M

At another project adjacent to PLS, ongoing airborne geophysics have so far found two conductive anomalies on Aldrin Resource’s TSXV:ALN Triple M property. In a June 18 announcement, the company interpreted the anomalies as “parallel basement conductive trends analogous to conductors associated with” the Fission/Alpha discovery.

Triple M’s conductive trends are two kilometres and 3.5 kilometres long. The latter “closely parallels a magnetic linear suggesting a basement fault and has localized anomalous conductivity along the entire trend. The two-kilometre conductor trend has sharp magnetic contacts flanking the strong conductive centre,” Aldrin stated. Similar features are found at PLS and most of the Basin’s high-grade uranium mineralization, the company added.

The VTEM magnetic and electromagnetic survey continues, a joint operation that’s flying contiguous PLS-area properties held by Aldrin, Athabasca Nuclear TSXV:ASC, Forum Uranium TSXV:FDC and Skyharbour Resources TSXV:SYH. Lucky Strike Resources TSXV:LKY and Noka Resources TSXV:NX each hold a 25% earn-in option on Skyharbour’s properties.

On June 12 Aldrin announced it was adding infill lines to increase the resolution of its survey from 200-metre to 100-metre spacing. The company holds a 70% option on the 12,001-hectare Triple M property.

Fission plans summer program for North Shore property in Alberta

Uranium news from Saskatchewan and elsewhere

On the Alberta side of the Basin, Fission Uranium’s North Shore
property has a summer program that includes geophysics,
prospecting and radon surveys.

Saying “there are still many underexplored areas of the Athabasca Basin,” Fission announced plans for its North Shore property on June 17. Located in Alberta on the Basin’s northwestern edge, the project was waiting completion of the Lower Athabasca Regional Plan, a provincial environmental and land use study. This summer’s program now includes a high-resolution airborne radiometric survey as well as ground prospecting, geophysics and radon surveys.

The 55,160-hectare property features several anomalous uranium showings in boulders and outcrop, including sandstone boulders grading up to 1.39% U3O8, the company stated.

Lakeland appoints David Hodge and Ryan Fletcher directors

Lakeland Resources TSXV:LK announced two appointments to its board of directors June 21. With over 17 years’ experience managing and financing publicly traded companies, David Hodge is president of project generator Zimtu Capital TSXV:ZC and a director of Western Potash TSX:WPX, Commerce Resources TSXV:CCE and Pasinex Resources CNSX:PSE. His approach emphasizes team-building, consultation and leadership, as well as a reliance on expert advice.

Ryan Fletcher serves as president/CEO/director of Montan Capital TSXV:MO.P and as a director of Zimtu. He’s been responsible for identifying and sourcing projects, structuring companies and investments, raising capital, business development and marketing.

The newcomers replace Robert Duess and Daniel Wilson, whom Lakeland thanked for their contributions. The company holds nine Basin properties totalling over 100,000 hectares.

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Western Potash gets $31.9-million investment, 20-year off-take agreement

June 2nd, 2013

by Greg Klein | June 2, 2013

A Chinese joint venture has agreed to invest $31,979,022 into Western Potash TSX:WPX and sign a 20-year off-take agreement, the company announced June 2. Under the deal, the JV gets a 19.9% interest in Western and agrees to buy or designate a buyer to purchase the lesser of 30% or one million tonnes of potash annually for 20 years from Western’s Milestone project in southern Saskatchewan. Milestone achieved full feasibility in December and environmental assessment approval in April.

Our strategic alliance with China Blue and Guoxin will provide Western with access to project financing, technical expertise in large-scale project construction and marketing channels for future potash sales.—Patricio Varas, CEO of
Western Potash

The JV, CBC (Canada) Holding Corp, is comprised of China BlueChemical Ltd and Benewood Holdings Corp. China Blue is a majority-owned subsidiary of China National Offshore Oil Corp, China’s largest offshore oil and gas producer. Benewood is a wholly owned subsidiary of Guoxin International Investment Corp, a Hong Kong investment firm.

Under the agreement, CBCHC buys 45,040,876 newly issued shares at $0.71, a 15% premium over the 20-day volume-weighted moving average. CBCHC may also nominate a director to Western’s board. The parties expect to close the agreement by June 14.

In a statement accompanying the news release Western CEO Patricio Varas said, “Our strategic alliance with China Blue and Guoxin will provide Western with access to project financing, technical expertise in large-scale project construction and marketing channels for future potash sales.”

Milestone’s full feasibility study, released in December, used a 10% discount rate to calculate a pre-tax net present value of $3.6 billion and a 21% internal rate of return. The after-tax NPV came to $2.44 billion with an 18.6% IRR. The initial capex was $2.91 billion for a solution mining operation that would produce 2.8 million tonnes of potassium chloride annually for 40 years. Payback was estimated at 5.6 years.

Solution mining involves pumping water into underground caverns, then extracting a potash-rich brine. Western has a 45-year agreement with the city of Regina, 30 kilometres away, to supply Milestone with treated effluent.

Saskatchewan’s Ministry of Environment issued the project an environmental assessment approval in April.

Read more about Western Potash here.

Western Potash VP of corporate development John Costigan

May 24th, 2013

…Read More

In pursuit of potash

May 16th, 2013

The market looks favourably on early-stage Pacific, advanced-stage Western Potash

by Greg Klein

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Just the stuff to develop bigger and healthier crops, potash complements a world growing in population and appetite. Two contrasting companies pursuing the commodity are Western Potash TSX:WPX, the most advanced junior in the space, and Pacific Potash TSXV:PP, with a very big but early-stage property optioned from Western. Those differences aside, both companies have seen a general upturn in share price over the last month.

Pacific Potash TSXV:PP chart for the month ending May 16, 2013

Pacific Potash TSXV:PP chart
for the month ending May 16, 2013.

Pacific’s V.P. of corporate communications Mike Blady largely attributes his company’s stock performance to a $2.25-million financing announced in April. The money will fund exploration on the Amazonas project in the Brazilian potash basin of the same name, a region that’s being compared in size and geology to Saskatchewan’s prolific potash region.

With 796,000 hectares, Pacific holds a substantial chunk of property. Even so, it’s been trimmed from its original size of over 1.5 million hectares. Last September the company dropped claims to the south that involved indigenous communities, protected forests or inaccessible terrain. Much of the remaining land had already been cleared. A 43-101 technical report followed in November.

Parts of the property might be remote but “there are several cities within our claim blocks, with 40,000 to 100,000 inhabitants,” Blady explains. “There are roads in and around the cities but the majority of the property is accessible by boat through tributaries of the Amazon River,” which he calls “the super-highway for commerce in most of Amazon state.”

The location offers an even greater advantage—an already huge domestic potash market with a faster rate of increase than anywhere else on the planet.

Pacific Potash hopes to begin drilling its Amazonas property in September or October

Pacific Potash hopes to begin drilling its
Amazonas property in September or October.

“Brazil has a very large agricultural sector but almost zero domestic production,” Blady points out. The country currently imports over 90% of its supply from places as distant as Canada, Russia and the Middle East, he says. Shipping costs add about $175 to $225 per tonne to the price, compared to an estimated $40 to $60 for shipping if a local mine were developed. Consequently “the government’s very supportive of these projects. Brazil’s trying to increase domestic production to 60% of demand by 2020. They’re very interested in seeing this basin get developed, which is great for a company like us.”

He adds, “In Brazil, agro-business is the fastest-growing industry and one of the government’s largest cash generators. It’s expected that Brazil will have the largest sustained growth in potash consumption over the next 50 to 100 years as it still has 20% of the world’s remaining arable land. Brazil is the number one growth market for fertilizer and potash. It’s growing even faster than China for potash consumption.”

That potential attracted Asian capital to Pacific’s recent $2.25-million financing. A first tranche of $1.25 million closed last month while another $1 million from Sino-Canada Natural Resources Fund is being held in trust until May 31. That’s the day shareholders decide whether to approve a change of control in which the fund would hold about 18.1% of Pacific’s outstanding shares and nominate a co-chairman and director.

Sino-Canada plans to invest more than $500 million over two years in Canadian natural resource companies.

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Western Potash VP of corporate development John Costigan on the Milestone potash project in Saskatchewan

December 12th, 2012

…Read More

Milestone attained

December 5th, 2012

Feasibility approaches for Western Potash’s southern Saskatchewan Milestone project

by Greg Klein

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A 45-year deal to buy treated effluent? At first glance, that hardly seems the kind of news to excite investor interest. But it’s essential to Western Potash’s TSX:WPX plan to use solution mining, one of the distinguishing features of the company’s Milestone potash project in southern Saskatchewan.

“If you compare the ramp-up period for a solution mine with a conventional mine, it’s staggering,” says Western Potash VP of corporate development John Costigan. “From construction to production takes about three years. For a conventional mine, that can take up to nine years. Consider the capital costs. Consider the cash flow. The payback comes an awful lot sooner.”

Feasibility approaches for Western Potash’s southern Saskatchewan Milestone project

About 95% of potash is used to make fertilizer,
helping to feed the world.

So last November’s water deal with the city of Regina marked another step forward for Milestone. The company expects a decision on its environmental impact statement in Q1 2013. Even sooner, Milestone’s feasibility study will hit the market.

The water plan calls for Western Potash to build a 30-kilometre pipeline from city to site. There, treated water will be injected into the mine and pumped out as potash-bearing brine. Evaporation, separation of salt and potash, and further refining will lead to the finished product. The deal gives Regina more than $200 million over 45 years. There’s a dual environmental benefit, too. Solution mining extracts less salt than conventional methods, resulting in a smaller surface footprint. And Regina won’t dump as much waste into its watershed. The plan would be more than sufficient to meet Milestone’s PEA-projected target of 2.8 million tonnes per annum for over 40 years.

The location is hardly obscure. Rival railways Canadian Pacific and Canadian National both cut through Milestone, offering access to ports and North American markets. Some of the world’s heavyweights live right next door. Milestone’s 35,400 hectares are bordered to the north and east by licences held by German fertilizer company K+S, BHP Billiton, Vale and a JV shared by Rio Tinto and North Atlantic Potash.

Two of those companies, however, might have cast a pall on potash. Last August Vale postponed construction of its $3-billion Kronau project to focus on the Carajas Mine in Brazil, the world’s largest iron ore mine. But Vale continues to work on Kronau’s environmental impact study. The same month BHP directors decided to review their $12-billion Jansen project, about 200 kilometres northwest of Milestone, even though work continues on the site. BHP has spent about $2 billion so far on Jansen, which would be the world’s largest potash mine.

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