Western Potash Corp. has announced that its wholly owned subsidiary, Milestone Potash Corp. (MPC) has received the final engineering report on the proposed Milestone Pilot Plant Project. The report was compiled by Amec Foster Wheeler who was responsible for all site surface facilities, Agapito Associates Inc. (Agapito) who was responsible for mining, and Milestone Potash Corp. who was responsible for off-site utilities permitting and engagement. The co-ordination of all project interfaces was managed by Amec Foster Wheeler.
The purpose of the report is to develop a full scope of engineering and procurement services as well as a Class 3 (+/-10%) Capital Cost Estimate and Operating Cost estimate in advance of Western’s construction decision for the Pilot Project.
The pilot plant was designed to have an annual production capacity of 146 000 t of potash obtained through horizontal mining of the Prairie Evaporites. The solution mining plan is based on the concept of ‘selective solution mining’ where the solvent is near-saturated with sodium chloride and partially saturated with potassium chloride. Among the advantages of the selective solution mining method are a lower CAPEX and OPEX compared to conventional solution mining. In addition, the selective solution mining technique has a lower environmental impact, consumes less water than conventional solution mining and does not produce salt tailings.
The total cost (CAPEX) to design, construct and commission the Pilot Project as described in the report is CAN$88.3 million as expressed in 4Q16 Canadian Dollars ($CAD).
The OPEX estimate for the Pilot Project was developed by Amec Foster Wheeler in conjunction with the Company. The plant site OPEX is estimated to be CAN$82.39/t of product. This estimate does not include costs associated with product transportation and delivery from the site to the customer.
MPC is working towards optimising the project execution plan and continuing to minimise potential risks associated with the Pilot Project, including:
- Lower than expected potash prices. This has the most significant effect on project economics. Although ChinaBlue Chemical Ltd., one of Western’s major shareholders, has expressed its willingness to enter into negotiations for a purchase agreement under certain terms for all the Pilot Plant’s products, MPC is continuing to explore other options for product sales outside of the Chinese market.
- Pilot Project water supply. Western has a previously negotiated an agreement with the City of Regina to use treated effluent for a 2.8 million tpy conventional solution mine. Although the Company maintains this agreement, the Pilot Project requires substantially less water volumes and construction of a pipeline to transport effluent to the site is not cost effective. MPC therefore intends to secure groundwater from a local deep well for the Pilot Project, which is below any potable or agriculture ground sources and will not affect domestic or agricultural water safety.
- Agapito’s numerical cavern model showed that brine concentrations could be lower than anticipated in the later stages of cavern life. To maintain potash recovery rates, additional wells were planned and drilling costs updated in the sustaining CAPEX.However, actual hydrodynamic conditions in the caverns may be underestimated in the model. Currently, further experimental investigations of the mechanisms of dissolution by NaCl-saturated solvents are being undertaken by Agapito in an attempt to simulate actual mining conditions.
- Road restrictions reduce the ability to ship product off-site (such as spring road bans) resulting in the process plant being shut down for a portion of the year. MPC is developing contingency plans to minimize the risk associated with restricted product shipping due to road conditions. This includes on-site storage and conducting an annual plant maintenance shutdown during spring road bans.
Geoffrey Chang, Chairman of the Company, commented: “We are pleased to have completed all the engineering, which shows the technological and economic feasibility of applying innovative horizontal drilling methodology, selective solution mining and crystallisation pond techniques. We are very excited about the prospect of bringing this revolutionary new solution mining technology to Saskatchewan.”
Read the article online at: https://www.globalminingreview.com/exploration-development/05012017/western-potash-receives-final-engineering-report/