Western Potash announced on July 2 the results of a positive preliminary economic assessment (PEA) for development of a pilot-scale solution mining operation to start potash production at its Milestone property 30 km southeast of Regina, Saskatchewan. The company initiated the PEA for a pilot-scale start when it found that financing was not available to develop the large-tonnage operation described in its 2012 Milestone feasibility study.

Subsequent to announcing the results of the Milestone PEA, Western Potash reported on July 6 that Beijing Tairui Innovation Capital Management Ltd. had agreed to acquire a 51% interest in Western Potash through purchase of shares valued at about C$80 million. Proceeds from the investment will be used to develop the Milestone pilot-scale operation. The transaction was expected to close by the end of August.

The 2012 Milestone feasibility study had considered a project producing 2.8 million mt/y of KCl. Capital costs to develop such a project were estimated at C$2.91 billion. Operating costs were estimated at C$62.28/mt at full production capacity.

The pilot-scale PEA envisions simultaneous operation of three pilot production caverns. Horizontally drilled wells will inject a NaCl-saturated brine into the potash formation at a temperature higher than the in-situ rock formation temperatures. KCl will be selectively dissolved, leaving behind a lattice of NaCl. The KCl-rich brines will be pumped through production wells to a surface crystallization facility.

The PEA is based on a measured resource of 7.17 million mt grading 39.5% KCl, an indicated resource of 11.56 million mt grading 39% KCl, and an inferred resource of 1.77 million mt grading 39% KCl. A cutoff grade of 15.8% KCl was used to define the top and bottom of the target resource.

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