IC Potash Announces Successful Ochoa Potash Project Preliminary Economic Assessment
05 1월 2011 - 9:00PM
PR Newswire (Canada)
TORONTO, Jan. 5 /CNW/ -- TORONTO, Jan. 5 /CNW/ - IC Potash Corp.
("ICP" or the "Company") (TSXV: ICP) announced today the successful
conclusion of the updated Preliminary Economic Assessment of the
Company's 100%-owned Ochoa Sulphate of Potash ("SOP") Project (the
"Preliminary Economic Assessment" or "PEA") located in south east
New Mexico, and prepared by Gustavson Associates of Lakewood,
Colorado ("Gustavson"). "This independent report is a major
achievement for IC Potash," Mr. Sidney Himmel stated. "The updated
PEA attributes an estimated net present value to the Ochoa Project
of US$1.4 Billion using a pre-tax discount rate of 10%, and $2.1
billion using a rate of 8%. The projected values are based on
the estimated capital cost of $662 million and projected production
cost of $164 per ton of SOP. The PEA provides robust
economics for the Ochoa Project with operations producing
660,000 tons of SOP per year. Our mission is to develop a
long-life, low cost mine, which will produce Sulphate of Potash,
the premium quality potash of the world, and the PEA
indicates that the Company's New Mexico Ochoa potash asset is
positioned to become one of the world's lowest cost producers of
Sulphate of Potash." Recommendations and Conclusions This
Preliminary Economic Assessment indicates that the Ochoa Sulphate
of Potash project is economically viable and Gustavon recommends
continued development of the project including: -- The
completion of a prefeasibility study; -- The commencement of
environmental and permitting work; and -- The obtaining of a
sufficient bulk sample of ore for pilot scale metallurgical testing
and process optimization. Dr. George Poling, Chairman of the Board
of Directors of IC Potash Corp., stated: "My compliments to our
world class team for the timely execution of this critical
milestone. We are now well financed to carry out all
recommended work, and prepared to evaluate strategic development
opportunities moving forward with the Ochoa Project, including the
possibility of establishing marketing partnerships with
international fertilizer companies." Economic Analysis The
National Instrument 43-101 Compliant Preliminary Economic
Assessment projects a base case production level of 660,000 tons
per year of Sulphate Potash ("SOP"), a mine life of 40 years with a
capital cost of $662 million, and operating cost per ton of
$164. All dollars are expressed in United States
currency. The base case production level data is summarized
as follows: -- Internal rate of Return of 25% on a pre-tax basis
based on a 100% equity case; -- Net Present Value of US $1.4
billion using a pre-tax discount rate of 10% and no debt; -- Net
Present Value of US$2.1 billion using a pre-tax discount rate of 8%
and no debt; -- Operating production cost of US$164 per ton of SOP;
-- Capital cost of $662 million which includes a general
contingency of $97 million and engineering and procurement and
management costs of $48 million; -- Underground mining at a rate
sufficient to produce 3.29 million tons of ore per year; -- Average
mining extraction rate of 85%; -- Average metallurgical recovery of
85% -- Mine life of 40 years; -- The Sulphate of Potash sales price
forecasts were provided by CRU, formerly known as British Sulphur
Consultants. CRU is the leading business consultancy for the
fertilizer industries; -- SOP prices for 2015 were forecast at $508
per short ton and subsequently varied for projected macroeconomic
trends and anticipated changes in Sulphate of Potash supply and
demand; -- While the project has the potential to produce Sulphate
of Potash and other fertilizer minerals such as Magnesium Sulphate,
the study included only Sulphate of Potash as this fertilizer
mineral is readily marketable in a very robust market. Economic
Impact of Resource Expansion As provided in the press release of
December 15, 2010, there is now 700 million tons of potash resource
in the measured and indicated resource category. The detailed
potash resource is provided in the table below. In addition,
there is a further resource of 300 million tons of potash in the
inferred resource category.
_________________________________________________________________
|5 foot minimum |Measured |Indicated |Measured and Indicated|
|thickness | | | |
|_________________|___________|____________|______________________|
|Tons |239,000,000|462,000, 000|700,000,000 | | | | | |
|_________________|___________|____________|______________________|
|Grade Polyhalite |82.7% |82.4% |82.5% | | | | | |
|_________________|___________|____________|______________________|
|Equivalent Grade|23.4% |23.4% |23.4% | |K2SO4 | | | |
|_________________|___________|____________|______________________|
|6 foot minimum |Measured |Indicated |Measured and Indicated|
|thickness | | | |
|_________________|___________|____________|______________________|
|Tons |41,000,000 |47,000,000 |88,000,000 | | | | | |
|_________________|___________|____________|______________________|
|Grade Polyhalite |86.1% |84.1% |85.0% | | | | | |
|_________________|___________|____________|______________________|
|Equivalent Grade |24.4% |23.8% |24.1% | |K2SO4 | | | |
|_________________|___________|____________|______________________|
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. The objective of the
upcoming pre-feasibility study is to demonstrated economic
viability. Base Case of 660,000 tons per year production,
operating costs:
_______________________________________________________ | |Cost Per
Ton Of|Cost Per ton of SOP| | | | | |Area of Operations |Feedstock
|Product | | | | | | |(US$) |(US$) |
|___________________|_______________|___________________| |Mining
|$12.36 |$61.39 | | | | |
|___________________|_______________|___________________|
|Processing |$19.76 |$98.11 | | | | |
|___________________|_______________|___________________| |G&A
|$ 0.95 |$ 4.72 | | | | |
|___________________|_______________|___________________| |Total
|$33.07 |$164.22 | | | | |
|___________________|_______________|___________________| Chief
Operating Officer Randy Foote commented, "We recently reported a
NI-43-101 compliant mineral resource which included, at a five foot
minimum thickness cut-off, 239 million tons of measured resource of
polyhalite, and 462 million tons of indicated resource. It is
this resource which we intend to convert to Sulphate of Potash at a
very low cost of production. Thus this project has the
potential to have a life far in excess of the forty year mine life
which was used in the financial economic model. The Company
is intent on moving quickly to develop this project." The
Preliminary Economic Assessment also considered a production
scenario of 1,000,000 tons of annual Sulphate of Potash
production. The capital cost for such a production level
would be $813 million. Assuming a 40 year mine life and the
same projected SOP prices as for the base case, the Internal Rate
of Return would be 30% and the Net Present Value would be $2.5
billion using a pre-tax discount rate of 10% and US$3.6 billion
using a pre-tax discount rate of 8%. The NI-43-101 Technical Report
for Preliminary Economic Assessment and the resource will be
published on the System for Electronic Document Analysis and
Retrieval ("SEDAR") no later than January 28, 2011. SEDAR is the
mandatory document filing and retrieval system for Canadian public
companies. SEDAR is operated by the Canadian Securities
Administrators, a coordinating body comprising the 13 Canadian
provincial and territorial securities commissions. Qualified
Persons Report All scientific and technical disclosures in this
press release have been prepared under the supervision of William J
Crowl, a consultant to IC Potash who is a Qualified Person within
the meaning of National Instrument 43-101. The Qualified Persons in
respect of the Preliminary Economic Assessment were William J.
Crowl, R.G., Donald E. Hulse, P.E., Terre A. Lane, MAusIMM, Deepak
Malhotra, MAusIMM. Consulting geologists, chemical engineers,
and chemists in respect of the work included Dr. Patrick
Okita, Donial Felton, B.Sc., Richard Chastain, B.Sc., and
Thomas Neuman, M.Sc. About IC Potash Corp. IC Potash intends
to become a primary producer of Sulphate of Potash ("SOP") by
mining its 100%-owned Polyhalite Ochoa property in New Mexico. SOP
is a non-chloride based potash fertilizer that sells at a
substantial premium over the price of Muriate of Potash ("MOP"),
the most widely used fertilizer in the world. Typically SOP sells
at a premium of 50% to MOP. ICP is focused on being the lowest cost
producer of SOP in the world. The SOP market is six million tonnes
per year and is a significant fertilizer in the fruit, vegetable,
tobacco, potato, and horticultural industries, and for agriculture
in saline and dry soils. SOP is also applicable in soils
where there is substantial agriculture activity with varieties of
crops. ICP's Ochoa property consists of over 100,000 acres of
federal subsurface potassium prospecting permits and State of New
Mexico Potassium mining leases. Forward-Looking Statements
Certain information set forth in this news release may contain
forward-looking statements that involve substantial known and
unknown risks and uncertainties. These forward-looking statements
are subject to numerous risks and uncertainties, certain of which
are beyond the control of ICP, including, but not limited to, risks
associated with mineral exploration and mining activities, the
impact of general economic conditions, industry conditions,
dependence upon regulatory approvals, and the uncertainty of
obtaining additional financing. Readers are cautioned that the
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on
forward-looking statements. NEITHER THE TSX VENTURE EXCHANGE
NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN
THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY
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pplease visit a href="http://www.icpotash.com"www.icpotash.com/a or
contact: Sidney Himmel, 1-416-624-3781/p
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