In late January 2012, Verde Potash reported a preliminary economic assessment (PEA) for production of conventional potash (KCl) at its Cerrado Verde project in Minas Gerais state, Brazil. The report focuses on a production scenario starting at 0.6 million mt/y of KCL and building to 3 million mt/y. Capex for the initial 0.6-million-mt/y phase is estimated at $654.1 million; capex for the 3-million-mt/y phase is estimated at $2.37 billion, including capex for the initial phase. Current planning is based on a 30-year mine life.
The PEA calls for start of phase 1 production in 2015. Phase 2 production of 1.6 million mt/y of KCl would be achieved in 2019, and phase 3 production of 3 million mt/y of KCl would be achieved in 2024. Operating costs for the initial five years of operation are estimated at $273.70/mt of KCl.
The company is also studying a second production scenario, with production starting at 1 million mt/y of KCL and building to 4 million mt/y. Results of this study were expected to be available with a matter of weeks.
Verde Potash is a fertilizer exploration and development company that was founded and is led by Brazilians. It is listed on the Toronto Stock Exchange. Its Cerrado Verde project is based on high-grade potash rock outcrops that are amenable to strip mining.
The company expects to complete a definitive feasibility study for the project by year-end 2012.