TORONTO (miningweekly.com) – TSX-V-listed EPM Mining Ventures on Thursday said a prefeasibility study (PFS) probing the potential to produce sulphate of potash (SOP) from its Sevier Playa project, in south-western Utah, was progressing apace, and was expected to be complete by midyear.

The PFS, being undertaken by consulting engineers CH2M Hill as well as Agapito Associates (AAI), would provide the foundation for the company's definitive feasibility study (DFS), which was also expected to be completed by late-2013.

The PFS would build upon the preliminary economic assessment (PEA) filed in November 2012, that had indicated potential SOP production of 300 000 metric tonnes over a 30-year mine life. The PEA calculated an estimated after-tax net present value of $629.7-million, when using an 8% discount rate, and an estimated after-tax internal rate of return of 24% on the project.

"Significant work has been completed and we are very satisfied with the progress we are making to advance our PFS and environmental permitting. All efforts are moving along well, so we remain on track and look forward to completing our studies on schedule," EPM CEO Lance D'Ambrosio said in a statement.

EPM had completed an eighteen-hole sonic drilling programme designed to provide additional hydrogeologic information and to finalise the data required to convert its resources into reserves.

The drilling programme, conducted between mid-February and late-March, was supervised by CH2 and AAI, with support from drilling services provider Boart Longyear. Hydrology testing began in early April and is currently under way.

CH2M has made significant progress in design, engineering and process work for the PFS. This included completing geotechnical drilling in the proposed plant site area, adding nine additional hydrology wells to the regional hydrology network; undertaking utility site surveys; refining process alternatives based on a thermodynamic model developed by equipment manufacturer Swenson Technology; organising testwork to validate the results of the model; and undertaking bench-scale evaporation testing with Hazen Research.

AAI was also advancing its work on the Sevier Playa system, having design and oversight of the hydrogeological and hydrophysical field-testing programme. The company was also developing hydrogeologic models for the system, with the ultimate objective of transitioning resources to reserves.

The firm was also charged with reviewing and characterising drilling logs and physical and chemical data; evaluating trench sidewall stability; and starting capital expenditure trade-offs and evaluations.

EPM said it was examining potential optimisations and improvements to the project, to potentially reduce project risks, refine capital and operating costs, and potentially allow for an earlier plant commissioning date.

The company added it was also moving forward with environmental permitting, including the mining plan with the US Bureau of Land Management (BLM) and Utah Division of Oil, Gas and Mining; the environmental-impact statement with the BLM; the 404 permit with the Army Corps of Engineers; the Air Approval Order with the Utah Division of Air Quality; and water appropriation with the Utah State Engineer.

Meanwhile, EPM had also commissioned the Parthenon Group to undertake an extensive analysis of the SOP market, the potential opportunity it held for EPM, and the necessary distribution strategies to be employed. Besides the US, extensive research efforts were under way in Brazil, China and India, using Parthenon's Mumbai and Shanghai offices.

The study is expected to be complete by the end of the month.

The company’s stock climbed by 6.67% to 32 Canadian cents apiece early on Thursday afternoon.