TORONTO (miningweekly.com) – Colorado-based Prospect Global Resources on Wednesday said it had started Phase 4 drilling on its flagship potash project in the Holbrook basin, in Arizona, with the aim of drilling 16 to 17 holes to convert more inferred resources to the measured and indicated categories.
The drilling programme would also provide the core samples needed to complete the remaining rock mechanic and metallurgical testwork required to complete a definitive feasibility study (DFS).
Major global drilling firms Boart Longyear and Major Drilling would perform the drilling.
Prospect Global said starting the drilling programme was a critical step towards completing the DFS, adding that the company was on track to release an updated National Instrument 43-101-compliant resource report by the end of the year.
The company recently released a prefeasibility study (PFS) for its flagship potash project, which promised a potential net present value of $1.4-billion and a 27% after-tax internal rate of return.
The PFS estimated the $825-million project would produce about 1.42-million tons a year at a cost of $115/t over the initial 26-year mine life. The project is located in a favourable mining jurisdiction with established infrastructure.
Prospect Global executive vice-chairperson Chad Brownstein said the company was fortunate to have an uncomplicated and straightforward venture, underscoring the project as being the best positioned in the low-cost junior segment.
The company is now working towards completing a bankable feasibility study by the third quarter of 2014, with first production from the project slated for 2018.