Passport Potash Inc. (TSXV:PPI, OTCQX: PPRTF) announced a preliminary economic assessment for its Holbrook Basin potash project. According to the key findings of the PEA, the Holbrook project has a pre-tax IRR of over 30% and a pre-tax NPV of $3.25 Billion at 12% discount rate.
As quoted in the press release:
KEY FINANCIAL HIGHLIGHTS
- Pre-tax NPV@12% $3.25 billion USD
- Pre-tax IRR (30% income tax rate) 31.59%
- After-tax NPV@12% $2.19 billion USD
- After-tax IRR (30% income tax rate) 27.08%
- Estimated Total Capital Expenditures $1.949 billion USD
- Estimated Total Operating Expenditures (includes sustaining OPEX) $114/tonne KCl USD
- Payback Period (from start of production) 8 years
Passport Potash President and CEO Joshua Bleak said:
We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market. The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world. Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project.