What’s been keeping you busy since we last spoke in April (2012)?
Over the past five months, the company has moved through some important stages. In June, the City of Regina approved the Key Commercial Terms that will see a large portion of the city’s treated sewage effluent routed to our Milestone mine site. At the beginning of September, we submitted an Environmental Impact Statement (EIS) for the proposed Milestone mine to the Saskatchewan Ministry of Environment.
Securing a sustainable recycled water source and the submission of our EIS are essential steps in de-risking the building of the Milestone potash solution mine.
Can you describe your company and say what it does?
Western Potash Corp. (TSX: T.WPX, Stock Forum) is a potash company focused on building Canada's most efficient potash solution mine.
We are currently working toward the completion of a Positive Feasibility Study at our Milestone potash project in Saskatchewan.
What distinguishes Western Potash from other companies in your space?
Can you explain why you have chosen to work in Western Canada?
The Milestone potash project hosts a world-class potash resource. Our NI 43 101 Technical Report reflects a resource of: 66.6 million tonnes of Measured Resource (contained KCl), 186.9 million tonnes of Indicated Resource, and 708.2 million tonnes of Inferred Resource.
Because we are proposing a solution mine we have a number of distinct advantages, most important is a significantly lower Capex than conventional mines.
Saskatchewan is home to the largest potash reserves in the world. This is where we wanted to be. Saskatchewan is a potash mining friendly jurisdiction and, in my opinion, the lowest risk area in the world in which to produce potash.
What is your flagship project? What stage is the project at?
When we last spoke you were working towards completing your Feasibility Study on the Milestone property, as part of your goal to build an efficient potash mine. Can you provide us with an update?
Our flagship project is called the Milestone project. It is located approximately 30 km southeast of Regina and 80 km southeast of Mosaic’s Belle Plaine Mining Lease. We are currently working on completing our Feasibility Study on that project after having positive results from a Preliminary Feasibility Study we completed last fall. The Feasibility Study process is on schedule is a due before the end of the calendar year.
Can you explain the economics of the project?
The Preliminary Feasibility Study conducted by AMEC on the Milestone potash project showed a positive economic outlook. We are looking at a 2.8Mt/yr. mine for at least 40 years. Our Net Present Value is $4.14 billion and our payback period is five years.
In addition, AMEC engineering’s PFS has our OPEX (Operating Costs) as $62.35/tonne, which will allow us plenty of room to breathe should the global potash pricing environment become restrictive.
Are there other projects within the company that you want people to be aware of?
Our main focus is on the Milestone potash project in Saskatchewan.
What are the key challenges that you face in your business? How are you dealing with these challenges?
There are challenges surrounding raising money in these markets. However, we are fortunate to be involved in a project with a defined, world-class resource, supported by positive economics. We also have a strong and experienced management team to get it done.
What are the key goals for 2012 and going into 2013?
Our main focus is to complete our Feasibility Study, to finish our EIS processes and execute an agreement with a strategic partner, which will help fund the building of the potash solution mine on the Milestone property.
Who are the major shareholders of Western Potash?
Management holds approximately 14% of Western Potash Corp.
Why should investors be thinking of investing in Western Potash today?
Western Potash Corp. has the management team in place to take the Milestone potash property into production. The property hosts a world-class potash resource in a mining-friendly, low-risk jurisdiction. The project has a Net Present Value estimate of more than $4 billion. Today, as a result of the changing markets, our company is valued at just over $100 million. This is an opportunity to get involved in something exciting.
Is there anything else you would like to say?
The upcoming months will be exciting; we are looking forward to seeing our Feasibility Study results.
Disclosure: Western Potash is a Stockhouse client.