Western Resources Corp. is pleased to announce that the board of directors approved a three-phase development plan for the Milestone Potash Project and the Phase I early works, at a meeting held on April 19, 2018.
Through an assessment of the overall global potash market situation and the progress the project has achieved to date, the management presented to the board a three-phase development plan for the full-scale 2.8 million tonnes per annum capacity Milestone Potash Project (for which a Feasibility Study was completed in 2012 and Environmental Approval was obtained in 2013). The plan includes the Phase I Project at an annual capacity of 146,000 tonnes of granular potash by applying a “horizontal cavern development + selective solution mining + crystal pond recovery” technique. Then, Phase II & III, each at annual capacity of 1.4 million tonnes of potash, will continue to utilise the same innovative mining methodology to provide improved economics based on the proven mining experience gained from Phase I.
Management believes the progress achieved to date fully supports initiation of the Phase I Project early works this year. The progress includes a Letter of Intent that the company has signed with a Chinese policy bank for a $60 million credit facility to finance the Milestone Phase I Project with certain conditions. The company has also entered into a non-binding Memorandum of Understanding (MOU) with a senior North American agriculture industry player to transport and off take 100 per cent of the Phase I Project potash production to the North American market.
In addition, the Phase I Project has received updated Environmental Approval under Saskatchewan’s Environmental Assessment Act in June 2017, and has completed an amended “Development Agreement” with the Rural Municipality of Lajord (“RM of Lajord”) in August 2017. The project continues to receive strong support from the local community, businesses, and governments. The innovative mining technique of horizontal drilling with selective solution mining has been further optimized with the help of the world leader in selective horizontal dissolution, Agapito Associates.
The first stage of the Phase I Project, to be completed in 2018, includes hauling aggregates to the site, site preparation, development of a groundwater source well for the Phase I Project, utility works and haul road designs, etc. The board has approved a budget of $13.58 million for the early works in the meeting. Since Phase I requires an addition of a compaction system to meet with the new market requirements, the final engineering of Phase I will be completed by early 2019, together with CAPEX and OPEX updates. Given the successful result of the groundwater source well and early works, the company anticipates formal sanction of the Phase I Project in Quarter 2 of 2019.
Management also presented the board with updates on the real estate projects investments, the combined budget actual to variances for the first six months of the 2018 fiscal year, as well as the company’s overall Stock Option plans.
Hon. James Moore, chairman of Western Resources commented: “The board is very pleased with the progress achieved on the Milestone Project since the Plan of Arrangement completed last year. Western would like to thank all management and staff who, over the past decade, have helped the project reach this stage. Phase I will witness more progress in 2018, and with further confirmation of financing, marketing and technical design, I believe the project will advance to formal construction by May 2019”.by