South Harz Potash announces the execution of MOU for Ohmgebirge project

South Harz Potash Ltd is has announced the execution of a non-binding memorandum of understanding (MoU) with NDH-E/DEUSA International GmbH (Deusa), the owner of the neighbouring property to South Harz’s Ohmgebirge potash development (Ohmgebirge) in Thuringia, Germany.

The MoU contemplates ongoing collaboration between the parties that allows South Harz to utilise access to Deusa’s Bernterode shaft infrastructure to advance the Ohmgebirge pre-feasibility study (PFS) and spatial planning application on a brownfield pathway basis. The MoU also grants binding exclusivity to South Harz until 31 March 2024 to advance discussions towards a definitive commercial agreement with Deusa on long-term shaft and infrastructure access and utilisation.

The MoU and targeted long-term access agreement with Deusa enables South Harz to progress a development layout for Ohmgebirge which is based on utilisation of the existing Bernterode #2 shaft through widening, followed by installation of a pocketlift conveyor and personnel/material cage. Brownfield development delivers substantial time and capital cost advantages versus a greenfield construction option. In the past 18 months, the industry globally has been impacted by rising costs. The arrangement with Deusa is expected to result in substantial capital cost advantages to South Harz, offsetting potential inflationary capital cost escalation when compared to a greenfield project development.

Whilst work will continue unabated on the PFS, the Company is focussed on working with Deusa to achieve the optimal engineering, environmental and economic outcome for the project. To allow for optimised and fulsome inclusion of the targeted Bernterode brownfield development pathway in all planning and evaluation activities, the Ohmgebirge PFS is now scheduled for delivery in early 2Q24. This timing also coincides with anticipated approval of the spatial planning permit.

South Harz Managing Director and CEO, Luis da Silva, commented: “The execution of this partnership MoU with Deusa continues to demonstrate the strong capacity of the world class Ohmgebirge project to leverage existing regional infrastructure and a genuine brownfield development pathway. The Bernterode infrastructure is located close to the Ohmgebirge tenement boundary and proximal to some of the thickest sections of the Ohmgebirge deposit. Its utilisation in the development of Ohmgebirge offers substantial physical, cost and time benefits to South Harz and its shareholders.

I would like to take this opportunity to thank Deusa for their cooperation and approach over the journey to date. The signing of this MoU is a landmark milestone for both parties. We look forward to building on this collaboration with Deusa and its people in advancing towards definitive commercial arrangements and delivering superior environmental, social and financial outcomes for both parties.

I also look forward to providing further updates as key Ohmgebirge milestones are progressively delivered in coming months, including submission of the spatial planning application and completion of the PFS.”

Read the article online at: https://www.worldfertilizer.com/potash/02112023/south-harz-potash-announces-the-execution-of-mou-for-ohmgebirge-project/