Canadian fertiliser products company Karnalyte Resources is updating the National Instrument 43-101 technical report for its Wynyard potash project, in Saskatchewan, on the back of a strong outlook for the industry.
The company, which last year concluded a strategic review of its projects, had selected consulting and engineering group Wood as lead author of the update to the technical report.
The services of senior project adviser ProMine Project management and Brad Straub, who previously worked with majors BHP, Nutrien and Mosaic, have been retained to assist the company in its oversight and evaluation of the update to the technical report.
Karnalyte would complete an update for Wynard by the end of the second quarter, the company stated.
Following last year’s strategic review, Karnalyte had concluded that it needed a major industry partner to help overcome unfavourable market conditions, including low prices and low levels of interest from financial institutions.
However, conditions in the potash market are looking up, with analysts predicting that the events that caused the higher prices are not likely to change anytime soon. Russia and Belarus normally supply about 40% of the world’s potash. Sanctions on Belarus began in 2021 and early last month, Lithuania cancelled its rail contract with Belarus, cutting off the landlocked country from shipping its potash to the market.
The Russian invasion of Ukraine and resulting sanctions on potash and other trade from Russia had a severe impact on potash supply.
Canadian potash suppliers are clinching supply contracts with India and China of about $590/t – more than double the prices of the first quarter of last year, Karnalyte reported.
The Wynyard project entails Phase 1 production of 625 000 t/y of high-grade granular potash, and two subsequent phases of 750 000 t/y each, taking total production up to 2.125-million tons a year.
Regarding the nitrogen project that Karnalyte owns, the strategic review found that the project was a high risk without both an offtake agreement and a joint or independent capital investment. The nitrogen project is a proposed small-scale nitrogen fertiliser plant with a nameplate production capacity of about 700 t/d of ammonia and about 1 200 t/d of urea.
Karnalyte said that market conditions for nitrogen also improved significantly last year, partly owing to the market situation in potash and partly owing to global supply issues as a result of the pandemic, higher oil and gas prices and increased crop prices leading to incentive among producers to use fertilsers to increase yields.