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Gensource Potash Corporation (TSXV:GSP) reported that the first engineering study for its Lazlo Project in Saskatchewan has been completed. The Study confirmed previous internal engingeering work, and contains an analysis of expected capital and operating costs to develop a model to be used for the preparation of a preliminary economic analysis in accordance with NI 43-101 standards. The Study was prepared by Innovare Technologies Ltd., in conjunction with ENGCOMP Engineering and Computing Professionals Inc. of Saskatoon.
As quoted in the press release:
The Study comprised analysis of expected capital and operating costs prepared internally in order to develop a model to be used for the preparation of a preliminary economic analysis in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101″). As the Study confirmed the Company’s previous internal engineering work, further field work (drilling and seismic) will be undertaken to confirm the resource in the project area. The results of the engineering and resource work will be combined and released as a Scoping Study (or Preliminary Economic Assessment) prepared in accordance with NI 43-101.
The Company is attempting to develop an economic small scale production model. The small size is of key importance:
It allows for vertical integration of the mine with a single market partner. To attempt a vertical integration strategy with the typical Saskatchewan potash project producing 3 million tonnes per year is simply not possible, andIt has the potential for lower capital expenditures which may be more readily financed in challenging capital markets for the resource industry.
Gensource Potash President & CEO, Mike Ferguson, said:
We are very pleased to have completed this study, on time and on budget. We are particularly pleased that the study has confirmed our initial assessment of the selective mining and innovative processing approaches we are undertaking. The potential ability to implement a small, economic mine, at a cost that may be financed in the current market context is a unique situation, and represents a strong foundation on which Gensource plans to move forward.
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