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Western Resources board approves Milestone Potash Project three-phase development plan and Phase I early works

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World Fertilizer,

Western Resources Corp. has announced that its board of directors has approved a three-phase development plan for the Milestone Potash Project and the Phase I early works.

Through an assessment of the overall global potash market and the progress the project has achieved to date, the management presented a three-phase development plan for the full scale 2.8 million tpy Milestone Potash Project to the board. The feasibility study for this project was completed in 2012, and environment approval was granted in 2013.

The plan includes the Phase I project at an annual capacity of 146 000 t of granular potash by applying a ‘horizontal cavern development + selective mining solution + crystal pond recovery’ technique. Then, Phase II and III, each at a capacity of 1.4 million tpy of potash, will continue to use the same innovative mining methodology to provide improved economics based on the proven mining experience gained from Phase I.

According to the statement, management believes that the progress that has been reached so far fully supports initiation of the Phase I Project early works this year. The progress includes a letter of intent that the company has signed with a Chinese policy bank for a $60 million credit facility to finance the Milestone Phase I Project with certain conditions. In addition to this, the company claims that it has also entered into a non-binding memorandum of understanding (MoU) with a senior North American agriculture industry player to transport and offtake 100% of the Phase I Project potash production to the North American market.

In June 2017, the Phase I Project received updated environmental approval under Saskatchewan’s Environmental Assessment Act. In addition to this, in August 2017, it completed an amended development agreement with the rural municipality of Lajord. Western Resources claims that this project is continuing to receive strong support from the local community, businesses and governments. The innovative mining technique of horizontal drilling with selective solution mining has been further optimised with the help of Agapito Associates – a leader in selective horizontal dissolution.

The first stage of the Phase I Project will include hauling aggregates to the site, site preparation, development of a groundwater source well, utility works and haul road designs, etc. This stage is scheduled for completion this year, with the board having approved a $13.58 million budget for the early works in the meeting. Since Phase I requires an addition of a compaction system to meet with the new market requirements, the final engineering of Phase I will be completed by early next year, together with CAPEX and OPEX updates. Given the successful results of the groundwater source well and early works, Western Resources claims that it is expecting formal sanction of the Phase I Project in 2Q19.

According to the statement, management also presented the board with updates on the real estate project investments, the combined budget actual to variances for the first six months of the 2018 fiscal year, as well as the company’s overall stock option plans.

The Chairman of Western Resources, James Moore, said: “The board is very pleased with the progress achieved on the Milestone Project since the Plan of Arrangement completed last year. Western would like to thank all management and staff who, over the past decade, have helped the project reach this stage. Phase I will witness more progress in 2018, and with further confirmation of financing, marketing and technical design, I believe the project will advance to formal construction by May 2019.”

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