IC Potash Announces Filing of Feasibility Study for the Ochoa Sulphate of Potash Project
March 10 2014 - 6:00AM
Marketwired Canada
IC Potash Corp. (TSX: ICP) (OTCQX: ICPTF) ("ICP" or the "Company") is pleased to
announce the filing of the "NI 43-101 Technical Report, Ochoa Project
Feasibility Study, Lea County, New Mexico, USA" (the "Report") on SEDAR
(www.sedar.com). The Report is also filed on the Company website
(www.icpotash.com). The date of the Report is March 7, 2014, with an effective
date of January 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 (the "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 funding for bridge engineering
while also seeking full funding of the Ochoa Project. The Report also recommends
that the Company move to implementation by commencing engineering, procurement,
and construction management ("EPCM") activities and completing the environmental
permitting.
Mr. Sidney Himmel, CEO 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 Q2 2014 and continuing through Q2 2017,
followed by 50 years of operation. Sulphate of Potash ("SOP") production
in 2017 is estimated at 48% 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 Q2 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 super section 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%.
-- 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 +/-15%.
-- The after-tax Net Present Value ("NPV") is US$612 million using an after
tax discount rate of 10% and no debt. The after-tax internal rate of
return is 16%. The after-tax NPV is US$1.019 billion, using an after-tax
discount rate of 8% 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% by weight polyhalite. Mineral Resources that are
not Mineral Reserves do not have demonstrated economic viability. Mineral
Resources are summarized in the table below:
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 (pcf).
(2) Bed thickness cutoff 4.0 ft, composite grade cutoff 65.0% 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 percent negligible for all resource classifications.
============================================================================
The Company released the details of a feasibility study on January 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% 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. These
Reserves are shown below:
Ochoa Project Mineral Reserves, (effective date January 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 cutoff 4.0 ft, composite grade cutoff 66.0% polyhalite,
includes out-of-seam dilution.
(2) Average in-situ bulk density of 173.5 pcf.
(3) No inferred tons mined
(4) Areal recovery (mined area) inside 50 Year Mine Plan boundary
Note: Gypsum weight percent 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 mineable, 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 Deepak Malhotra, Ph.D. and
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 ("NI 43-101") and an advisor to the Company.
The Report authors are Gary Skaggs, P.E., P.Eng.; Leo Gilbride, P.E.; Tom
Vandergrift, P.E.; Susan Patton, Ph.D., P.E.; Vanessa Santos, PG; Lawrence
Berthelet, P.Eng., MBA; and Jack Nagy, P. Eng., each an independent Qualified
Person within the meaning of NI 43-101.
About IC Potash Corp.
ICP has demonstrated a low-cost method to produce Sulphate of Potash ("SOP")
from its 100%-owned Ochoa polyhalite deposit in southeast New Mexico. The
Company intends to become a primary, long-term producer of SOP. The global
market for SOP is 5.5 million tons per year, with producers benefiting from
substantial price premiums over regular potash, known as muriate of potash. SOP
is a non-chloride potash fertilizer widely used in the horticultural industry
and for high value crops, such as fruits, vegetables, tobacco and potatoes. It
is applicable for soils where there are substantial agricultural activity, high
soil salinity, and in arid regions. The Ochoa Project has access to excellent
local labor resources, low-cost electricity and natural gas, water, rail lines,
and the Port of Galveston, Texas. ICP's land holdings consist of nearly 90,000
acres of federal subsurface potassium prospecting permits and State of New
Mexico potassium mining leases. For more information, please visit
www.icpotash.com.
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
and other factors which may cause the actual results, performance or
achievements of ICP to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Forward-looking statements include statements that use
forward-looking terminology such as "may", "will", "expect", "anticipate",
"believe", "continue", "potential" or the negative thereof or other variations
thereof or comparable terminology. Such forward-looking statements include,
without limitation, reserve estimates, ICP's expected position as one of the
lowest cost producers of SOP in the world, the timing of receipt and publication
of ICP's environmental permits, the sufficiency of ICP's cash balances, the
timing of production, and other statements that are not historical facts. 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, the uncertainty of obtaining additional financing, and risks
associated with turning reserves into product. 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
FOR MORE INFORMATION, PLEASE CONTACT:
Mr. Mehdi Azodi
Investor Relations Director
Phone: 416-779-3268
E-mail: mazodi@icpotash.com
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