IC Potash Corp. has announced that the results of an independent Canadian National Instrument 43-101 compliant (NI 43-101) Preliminary Economic Assessment (PEA) for its Ochoa Polyhalite Project (the Project) located in Eddy and Lea counties, New Mexico, USA have been received.
Golder Associates Inc. (Golder) compiled the PEA in its entirety with reliance on other experts for the following: CRU Strategies – Market Studies and commodity pricing, INTERA Geoscience and Engineering Solutions – Permitting and Environmental, and Upstream Resources – Product Development.
The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves, and there is no certainty that the PEA will be realised.
The Mineral Resource estimates presented in the PEA supersede the Mineral Resource estimate for the Project presented in the 2014 Feasibility Study.
“The PEA and our new polyhalite strategy represents the important de-risking phase for the Ochoa project. This body of work and all recent positive developments for the Ochoa project enables ICP to focus on a more aggressive path for project finance and continue our work with various industry groups. We are very excited about the results of the PEA and look forward to taking the Ochoa project to the next stage of project development,” commented Mehdi Azodi, President and CEO.
The Company is progressing the Project in the short-term through a Feasibility Study currently being compiled by Cementation USA that has an expected completion date of the end of February 2017.
IC Potash has revised the Project to consider direct application of polyhalite as a crop nutrient product rather than producing Sulphate of Potash through a chemical processing plant. The resulting Project has a reduced capital cost, a shorter ramp-up time and improved financial metrics.
- Updated Mineral Resource estimate of 330 million t of high grade polyhalite (89.3% by weight).
- A proposed production schedule extracting up to 2 million tpy of polyhalite for approximately 38 years of steady state production at an average grade of 90% polyhalite. Initial production is estimated to begin in 2019.
- Initial capital expenditure of US$368 million that includes a 15% contingency on direct capital items.
- Estimated initial Polyhalite product netback revenue of US$162/short ton sold and a Life of Mine average of US$203/short t.
- Total estimated operating costs of US$44/short t mined, processed, and shipped to a local distribution point.
- An after tax, all equity project NPV of US$1197 million at an 8% real discount rate and an IRR of 28%, with payback in 2.6 years.
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