Chinese offtake partner intends to invest $20m – Prospect Global
TORONTO (miningweekly.com) – Denver-based potash project developer Prospect Global Resources on Thursday announced that its Chinese offtake partner, Sichuan Chemical Industry Holding Co, had issued the company with a letter of intent to invest up to $20-million to help the development of the Holbrook project.
The two companies inked a potash supply accord in 2012.
“Sichuan has been looking for ways to deepen its cooperation with Prospect. We look forward to working with the company in order to bring its Holbrook basic project to completion and Sichuan will continue to pursue additional avenues of cooperation going forward,” Sichuan Chemical president Xiaojun Chen said in a statement.
Terms of the Sichuan investment were still to be agreed to and would be subject to final approval by the Sichuan provincial government and affiliates.
Prospect 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.
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