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Potash Ridge Corporation (TSX:PRK,OTCQX:POTRF) announced an independent Prefeasibility Study for the Blawn Mountain Project in Utah. Highlights include proven & Probable mineral reserves of 426 million tons, after tax Net Present Value of $1.0 billion using a 10% discount rate, 40 year mine life, and total sales of 26 million tons of SOP over life of mine.
As quoted in the press release:
Key Highlights of the PFS (all figures denominated in U.S. dollars and U.S. short tons)
- Surface mine with conventional crushing, roasting, leaching and crystallization processes;
- An average of 770,000 tons of sulphate of potash (“SOP”) per annum during first 10 years of operation after ramp-up; life of mine average of 645,000 tons of SOP per annum;
- Proven & Probable mineral reserves of 426 million tons;
- Reserves support 40 year mine life, with potential to increase life of operations through exploration of two additional zones of known mineralization;
- Project after tax Net Present Value (“NPV”) of $1.0 billion using a 10% discount rate:
- Total sales of 26 million tons of SOP over life of mine;
- No terminal value added to the NPV, which assumes no extension to life of operations;
- Unlevered after tax internal rate of return (“IRR”) of 20.5%; payback period of 5 years after commencement of operations;
- Installed SOP capital cost of $1.1 billion;
- Strong cash flow generation with cash flow from operations of $234 million per annum excluding the two year ramp up period;;
- Approximately 28% of direct capital costs are supported by packaged quotes;
- Expect to be a low cost producer: average net cash operating costs after by-product sulphuric acid credits of $218 per ton of SOP (inclusive of royalties), $173 per ton (exclusive of royalties); no credit assumed for possible revenue from the sale of alumina material.
Potash Ridge CEO, Guy Bentinck,said:
The completion of the PFS is a major milestone in the development of the Project. We are extremely pleased with the results that demonstrate the technical and economic viability of the Project. The PFS highlights that we have a 40-year Project, entirely based on mineral reserves, with a technically sound and economically proven flow-sheet. The Project offers a unique opportunity for significant production of SOP in Utah, one of the most favourable mining jurisdictions in the world. In recent months the North American SOP market dynamics have demonstrated strong long-term fundamentals, resulting in increasing pricing premiums over MOP. Our intention is to move forward into the Feasibility Study stage early next year. We will also continue with strategic initiatives to pursue long-term partnerships and financing arrangements for the development and construction of the Project.
Click here to read the Potash Ridge Corporation (TSX:PRK,OTCQX:POTRF) press release
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