TORONTO (miningweekly.com) – Potash junior Karnalyte Resources on Wednesday officially opened the contractors’ office at its Karnalyte property, near Wynyard, Saskatchewan, in anticipation for construction activities to start.
CFO Ron Love told Mining Weekly Online the company was now gearing up for serious construction activities of its $2-billion project to start and ground-clearing activities was already taking place.
He said the $2-billion project involves the construction of a facility that would initially produce 625 000 t/y of potash, increasing to 2.12-million tons of potash per year over the mine’s expected 70 year life.
The property holds 155-million tons of proven and probable reserves, with significant upside potential to increase.
The development project would be undertaken in a staged approach, with the first phase of development expected to total C$600-million.
“We have a number of projects nearing completion that would enable us to start with the full cons6truction by the first quarter of 2013,” he said telephonically.
Love pointed out that while brine tests were still being carried out on the Wynyard resource engineering, procurement and construction management (EPCM) was simultaneously being undertaken by Foster Wheeler Canada, which was contracted in September to provide EPCM services for the project.
He added that the company had filed for environmental approval about a month ago and that all projects were expected concluded and approved by the first quarter of the New Year, ready for full-scale construction.
“The next step is to raise financing for the project, which would consist of a mixture of debt and equity financing, preferably on a 60 to 40 ratio, to preserve our shareholders value,” he said.
The company in July examined the feasibility of adding a magnesium product facility to the potash project and concluded that magnesium chloride brine at a 32% concentration and 104 000 t/y of hydromagnesite, a form of basic magnesium carbonate, at 99% purity could be produced from the by-product of producing potassium chloride (KCl).
The construction of the $156-million facility is dependent on the development of the initial 625 000 t/y potash facility, which would use carnallite and sylvinite as sources of KCl and magnesium.
The company’s shares listed on the Toronto-bourse rose by 5.94% on Wednesday to close at C$8.20 apiece.
Edited by: Creamer Media Reporter