Issue link: http://resourceworld.uberflip.com/i/113113
MINING Western Potash expects commercial production at Milestone Project to commence in 2016 According to the Government of Saskatchewan, ���Saskatchewan is the world���s largest producer of potash, a mineral critical to the fertilizer that global crops need. Our mines account for roughly 30% of world potash production, and potash companies have announced $13.2 billion worth of expansions to their existing mines by 2020.��� And Saskatchewan���s potash industry is still growing. A new mine, Western Potash Corp���s [WPX-TSX; AHE-FSE] proposed Milestone solution mine, expected to be in production in 2106, has an estimated capacity to contribute an additional 2.8 Mt/yr to world production according to a positive Feasibility Study (FS) completed by Western Potash in December 2102. The study, conducted by AMEC Americas Limited, confirms that ���the deposit is of sufficient size and grade to support potash solution mining for more than 40 years.��� The company states that, ���the potash reserves in Saskatchewan are massive. By conservative estimates, Saskatchewan could supply world demand at current levels for several hundred years.��� The Milestone Project is situated about 30 km southeast of Regina and 80 km southeast of Mosaic���s Belle Plaine Mining Lease. Mosaic claims to be the world���s largest combined producer of potash and phosphates. According to the company, ���As commercial mining is initiated, the geological information from the ongoing well field drilling will be used to further define and expand the mineral reserves and resources. The project���s reserves and resources have the potential to support an ongoing mining operation well into the MARCH 2013 by Kathrine Moore next century.��� The Milestone FS reports that, ���the resulting after-tax project Net Present Value (NPV) is CDN $2.44B, with an Internal Rate of Return (IRR) of 18.6% assuming a nominal discount rate of 10%. On a before tax basis, the project yields an NPV of CDN $3.6B and an IRR of 21%.��� The study includes, ���all facilities required to operate a potash solution mine: cavern and well field layout, two-train multiple effect evaporization-crystallization plant, dry processing plant, product storage, load out and all other necessary site infrastructure. This design can accommodate future production expansion.��� On February 5, 2013, Western Potash announced the commencement of the Environmental Assessment Process which they expect to be completed in the first quarter of 2013. Western Potash submitted the environmental impact study (EIS) to the Saskatchewan Ministry of Environment (MOE) in late January 2013.��The EIS has been available for public review and comment, since February 4, 2013.��The company states that, ���all major technical and execution project risks have now been mitigated. Non-technical project risks, such as environment and political concerns remain low.��� The project has excellent access to infrastructure: utilities, services; power, natural gas, water and rail connections are readily available.�� Western Potash has raised over CDN $100 million from institutional and retail investors, including the IPO in May 2008 to fund the project. Construction and mine development is expected to begin in 2013. n www.resourceworld.com 45