TORONTO, ONTARIO--(Marketwired - March 18, 2014) - AgriMinco Corp. (TSX VENTURE:ANO) ("AgriMinco" or the "Company") is pleased to announce that following the completion of the maiden NI 43-101 compliant mineral resource estimate (the "MRE"), the operator of Danakil Holdings Limited, Plinian Capital LLP requested a preliminary investigation into the economic viable mining and processing options for the Danakil potash resources. The preliminary investigation was prepared by independent consultants K-UTEC Salt Technologies ("K-UTEC"), a German consulting firm with expertise in potash mining, and the results are published in Section 16 of the Technical and MRE Report, to be filed on SEDAR on or before March 27, 2014. The key findings of Section 16 of the report include:
-- The study selected solution mining as the method of choice, as the
Danakil resources are too deep for an open pit mining method (200-400
metres) and mining by conventional underground method was discounted due
to the weak Bischofitite Member located between the upper and lower
mineralised zones and the perceived risk of flooding.
-- The Bischofitite Member which separates the upper and lower mineralised
units is shown to develop mid-way across the deposit in an N-S
direction. In the west the Bischofitite is either non-existent to 10
metres thick and steadily increases in thickness to a maximum of 80
meters as the deposit deepens to the east.
-- Although the MgCl2 from the Bischofitite can be included in the
processing concept, its exploitation is considered uneconomic due to
high energy and water consumption and as such a 10 metre cut-off
thickness for the Bischofitite unit has been defined. As such two mining
methods were defined, SolMIn1 and SolMin2, at an annual rate of 2 Mt of
SOP. The transition from SolMin1 to SolMin2 mining method will be in
approximately year 14:
-- SolMin1 - solution mining of the south-west portion of the deposit
where the Bischofitite unit is less than 10 metres, where solution
mining will generate high caverns up to 30 metres, as the Sylvinite,
Carnallitite and Kainitite units will be mined at the same time.
-- SolMin2 - selective mining of the upper and lower mineralised units
where the Bischofitite exceeds 10 metres in thickness. This method
will simultaneously mine both the lower and upper mineralised units
through a triangular pillar cavern mining method. The next phase of
study is expected to generate the geotechnical data required to
maximize cavern design with the aim of producing robust productive
caverns by maximizing SOP production.Design of the solar evaporation ponds and the mining method, or combination thereof will allow flexibility in the final product mix. The tables below set out some of these options that include 100% SOP to a combination of SOP and MOP and the projected NPV and IRR associated with the options. Key assumptions of the preliminary study include:
Assumptions
Discount Rate: 10 & 12% scenarios
Accuracy: +/- 40%
Price of SOP :Price of MOP : US$ 600
US$ 350
Key Resource Highlights
Indicated Mineral Resource 708.8 Mt
KCl grade 19.4%
Inferred Mineral Resource 1,116.5 Mt
KCL grade 19.1%
Table 1 Investigated scenarios for the solution mining configuration
----------------------------------------------------------------------------
Code Mining Option Process Option Product
ktpa
----------------------------------------------------------------------------
A1 SolMin1 initially Solar 500 SOP
----------------------------------------------------------------------------
A2 SolMin 1 initially Solar 1000 SOP
----------------------------------------------------------------------------
A3 Solmin 1 initially Solar 2000 SOP
----------------------------------------------------------------------------
B1 SolMin 1 initially Solar 417 SOP
47 MOP
----------------------------------------------------------------------------
B2 SolMin 1 initially Solar 835 SOP
94 MOP
----------------------------------------------------------------------------
B3 SolMin 1 initially Solar 1,670 SOP
187 MOP
----------------------------------------------------------------------------
C1-1 SolMin 2 Solar 313 SOP
185 MOP
----------------------------------------------------------------------------
C1-2 SolMin2 Solar 626 SOP
370 MOP
----------------------------------------------------------------------------
C1-3 SolMin2 Solar 1,252 SOP
740 MOP
----------------------------------------------------------------------------
Table 2 Results of the cash flow calculation model for the variants A-1 to
C1-3
----------------------------------------------------------------------------
Code Initial IRR%
Capex NPV10 NPV12
US$ US$ US$
M M M
----------------------------------------------------------------------------
A1 459 664.45 506.51 32%
----------------------------------------------------------------------------
A2 804 1439.40 1,113.86 36%
----------------------------------------------------------------------------
A3 1,407 3,273.28 2,569.22 43%
----------------------------------------------------------------------------
B1 470 521.53 388.25 28%
----------------------------------------------------------------------------
B2 827 1,160.91 885.18 32%
----------------------------------------------------------------------------
B3 1,589 2,572.48 1,978.56 35%
----------------------------------------------------------------------------
C1-1 439 502.59 376.74 29%
----------------------------------------------------------------------------
C1-2 852 1,035.40 779.98 30%
----------------------------------------------------------------------------
C1-3 1,461 2,257.88 1,732.62 34%
----------------------------------------------------------------------------
Notes: 1. After-tax
2. Mineral resources that are not mineral reserves do not have
demonstrated economic viability
3. The preliminary assessment includes inferred mineral resources
that are considered too speculative geologically to have the
economic considerations applied to them that would enable them to
be categorized as mineral reserves, and there is no certainty
that the preliminary assessment will be realizedAgriMinco's CEO, Bruce Cumming comments, "Whilst the results are encouraging, they must be seen against the backdrop of uncertainty that the Company continues to face due to the difficulties experienced in attempting to raise additional finance and the existing debt burden the Company carries. We continue to focus our efforts on completion either of a capital raise or a corporate transaction. Under the terms of the JV agreement and the amendment thereto, AgriMinco was required to contribute 30% of expenditure in excess of the agreed free carry by April 7, 2014. In addition, the Company must also contribute 30% of the next fiscal year exploration budget. A failure to contribute will result in a dilution of the Company's interest. The operator has submitted budgets and costs for the historic overspend and a board meeting of the JV Company will be held on May 6, 2014 at which time cash call notices will be issued. The combined cash call for the first fiscal quarter and the historic excess is expected to be of the order of US$2m and the budget for the next twelve months, of which the Company must meet 30%, is expected to be US$20m."
Qualified Persons
The mineral resource estimate was completed by independent K-UTEC consultant Thomas Schicht, EurGeol, Assistant Head of Geophysics, K-UTEC Independent Salts Technologies, a Qualified Person under the National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
The Operator of the Joint Venture, Plinian Capital LLP and Circum Minerals Limited, the 70% Joint Venture Partner, have consented to the release of the information contained herein.
A copy of the NI 43-101 Technical Report will be available on the SEDAR website (
www.sedar.com) under AgriMinco's profile on or before March 27, 2014.
About AgriMinco
AgriMinco Corp. is a Canadian company based in Toronto, Ontario Canada. For more information regarding AgriMinco visit our website at
www.agriminco.com.
This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. All statements that address future activities, events or developments that the Company believes, expects or anticipates will or may occur are forward-looking information. Forward-looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to changes in general economic conditions or conditions in the financial markets. Such forward-looking information is based on a number of assumptions, including but not limited to, there being no significant decline in existing general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligations to update publicly or otherwise revise any forward-looking information, except as may be required by law. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the Company's filings with the Canadian securities regulators available on
www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.