Mr. Sidney Himmel reports
IC POTASH ANNOUNCES FILING OF FEASIBILITY STUDY FOR THE OCHOA SULPHATE OF POTASH PROJECT
IC Potash Corp. has filed the "NI 43-101 Technical Report, Ochoa Project Feasibility Study, Lea County, New Mexico, USA," on SEDAR. The report is also filed on the company website. The date of the report is March 7, 2014, with an effective date of Jan. 9, 2014. It was prepared by qualified persons from Agapito Associates Inc. and SNC-Lavalin Inc. All dollar amounts in this press release are U.S. dollars and all tons are short tons. The report includes a summary of the Ochoa project, including geology and mineralization, exploration and drilling, resources and reserves, mining methods, mineral processing and metallurgical testing, infrastructure, hydrology, environmental permitting, marketing, capital costs, operating costs, project economics, and conclusions and recommendations. The report recommends that ICP immediately seek financing for bridge engineering while also seeking full financing of the Ochoa project. The report also recommends that the company move to implementation by commencing engineering, procurement, and construction management activities and completing the environmental permitting.
Sidney Himmel, chief executive officer of ICP, stated, "The completion and filing of this report, and the recommendations of its authors, allows the company to progress to obtain financing and project partners to advance towards construction and production."
Highlights from the report include:
- The financial model covers approximately three years of construction and commissioning beginning in the second quarter of 2014 and continuing through the second quarter of 2017, followed by 50 years of operation.
- Sulphate of potash production in 2017 is estimated at 48 per cent of annual capacity, with full capacity expected in 2018.
- The company remains on schedule to receive a record of decision on its environmental impact statement in the second quarter of 2014, which will allow construction to commence as planned.
- The ore bed will be accessed via a 25-foot-diameter, two-compartment mine ventilation and service shaft, and a 12,000-foot-long slope.
- Room-and-pillar mining and dual split supersection mining methods are expected to be used to extract ore from the deposit at a nominal rate of 3.7 million tons per year. The plant is designed to operate 7,912 hours annually and employ approximately 400 people at full production.
- The company has full right to appropriate non-potable water from the Capitan Reef aquifer for mining and industrial use.
- Average K2O process recovery is estimated to be 82 per cent. Steady-state annual production at full capacity is expected to be 714,400 tons of SOP. The product mix is projected to be 229,400 tons of standard SOP, 385,000 tons of granular SOP and 100,000 tons of soluble SOP.
- Steady-state operating production cost is estimated to be $195 per ton of SOP.
- The capital cost of the project is estimated to be $1,018-million, with an accuracy of plus or minus 15 per cent. The after-tax net present value is $612-million (U.S.) using an after-tax discount rate of 10 per cent and no debt. The after-tax internal rate of return is 16 per cent. The after-tax NPV is $1.019-billion (U.S.), using an after-tax discount rate of 8 per cent and no debt. Payback period from the commencement of production is expected to be 5.4 years after tax.
- The report identifies measured and indicated resources of 1,017.8 million tons at an average grade of 83.9 per cent by weight polyhalite. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
OCHOA PROJECT MINERAL RESOURCES (EFFECTIVE DATE MAY 31, 2013)
Average Resource In-place
thickness area tons(1,2,3) Polyhalite
(ft) (acres) (millions) (wt %)
Measured(4) 5.2 26,166 511.7 84.5
Indicated(5) 5.0 26,698 506.0 83.3
--- ------ ------- ----
Total M+I 5.1 52,865 1,017.8 83.9
Inferred(6) 4.8 15,634 284.0 82.6
Equivalent
K2SO4 Anhydrite Halite Magnesite
(wt %) (wt %) (wt %) (wt %)
Measured(4) 24.4 4.02 3.27 7.94
Indicated(5) 24.1 4.00 3.30 8.61
--- ------ ------- ----
Total M+I 24.2 4.01 3.28 8.27
Inferred(6) 23.9 4.11 3.37 8.82
(1) Average in situ bulk density of 173.5 pounds per cubic foot.
(2) Bed thickness cut-off four feet, composite grade cut-off 65.0 per cent
polyhalite, excludes out-of-seam dilution.
(3) Mineral resource includes mineral reserves.
(4) Measured resource located within 0.75-mile radius from an exploration
core hole.
(5) Indicated resource located between 0.75-mile and 1.5-mile radius from
an exploration core hole.
(6) Inferred resource located between 1.5-mile and 3.0-mile radius from
an exploration core hole.
Note: Gypsum weight per cent negligible for all resource classifications.
The company released the details of a feasibility study on Jan. 23, 2014. The report outlines a detailed 50-year mine plan as well as calculated proven and probable mineral reserves based on the project's measured and indicated mineral resources. Contained within the mine plan are approximately 182.4 million tons of proven and probable reserves grading 78.05 per cent by weight polyhalite. Measured and indicated mineral resources become proven and probable mineral reserves once it has been determined that the resources are economic for extraction.
OCHOA PROJECT MINERAL RESERVES (EFFECTIVE DATE JAN. 9, 2014)
50-year
Average mine plan
mined mined area ROM mined Mining
thickness(1) (million tons (2,3) recovery(4) Polyhalite
(ft) ft(2) (millions) (%) (wt %)
Proven 5.9 246 125.0 47.1% 78.42
Probable 5.9 113 57.4 64.8% 77.20
--- --- ----- ----- -----
Total P+P 5.9 359 182.4 51.5% 78.05
Equivalent
K2S04 Anhydrite Halite Magnesite
(wt %) (wt %) (wt %) (wt %)
Proven 22.66 11.29 3.66 7.79
Probable 22.31 11.60 3.65 8.30
----- ----- ---- ----
Total P+P 22.55 11.39 3.66 8.08
(1) Bed thickness cut-off four feet, composite grade cut-off 66.0 per cent
polyhalite, includes out-of-seam dilution.
(2) Average in situ bulk density of 173.5 pounds per cubic foot.
(3) No inferred tons mined.
(4) Areal recovery (mined area) inside 50-year mine plan boundary.
Note: Gypsum weight per cent negligible for all resource classifications.
Mineral reserves are included in mineral resources.
Measured and indicated mineral resources exist to the north, east and west of the 50-year mine plan boundary, and there is a reasonable expectation that those resources will be economically minable, which would allow for an extension of mining operations beyond 50 years.
Qualified persons report
All scientific and technical disclosures in this press release have been prepared under the supervision of and approved by Dr. Deepak Malhotra, PhD, registered SME member, president of Resource Development Inc., a qualified person within the meaning of National Instrument 43-101, Standards of Disclosure for Mineral Projects, and an adviser to the company. The report authors are Gary Skaggs, PE, PEng, Leo Gilbride, PE, Tom Vandergrift, PE, Dr. Susan Patton, PhD, PE, Vanessa Santos, PG, Lawrence Berthelet, PEng, MBA, and Jack Nagy, PEng, each an independent qualified person within the meaning of National Instrument 43-101.
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