TORONTO (miningweekly.com) – Canadian potash project developer Potash Ridge on Friday reported that a subsidiary of the company had signed a nonbinding memorandum of understanding (MoU) regarding a potential offtake and marketing arrangement with a third-party marketer for the sulphuric acid output from its Blawn Mountain project, near Milford, Utah.
Under the terms of the arrangement, Potash Ridge would grant either exclusive marketing rights or offtake for all of its sulphuric acid output to the marketer, on such terms and conditions as might be agreed upon by both parties and subject to executing a definitive agreement.
“We are delighted to have entered into this arrangement with a highly regarded, third-party sulphuric acid marketer. This arrangement represents yet another significant step in executing the commercial aspects of the project and reflects the robust demand and growth for sulphuric acid in the US,” president and CEO Guy Bentinck said.
Meanwhile, Potash Ridge in August announced that it had signed a MoU with Tetra Tech for a long-term, strategic relationship to develop the Blawn Mountain project.
Under the terms of the agreement, Tetra Tech would undertake to perform the feasibility study on the project. The company expected to start the feasibility study later this year, subject to successfully raising more cash.
The MoU also appointed Tetra Tech the engineering, procurement and construction management contractor for the project on a right of first offer basis. The MoU also contemplated Tetra Tech participating in build, own and operate arrangements for various infrastructure assets, which might include, but not be limited to, the water treatment plant and sulphuric acid plant.
A prefeasibility study completed late last year estimated that the Blawn Mountain project had an after-tax net present value of $1-billion, when using a 10% discount rate and an estimated unlevered internal rate of return of 20.5%.
The project would produce about 645 000 t/y of sulphate of potash over its 40-year life. The operation would also produce about 1.4-million tons of sulphuric acid a year.
Over the life of the project, it would produce a total of 26.4-million tons of sulphate of potash and 59-million tons of sulphuric acid.