TORONTO (miningweekly.com) – Canadian potash project developer Potash Ridge on Friday said that its application for water rights at its flagship Blawn Mountain sulphate of potash (SOP) project near Milford, Utah, had been granted, a critical step to advance the project toward construction in 2015.

The TSX-listed firm's subsidiary Utah Alunite Corp jointly applied with the Utah School and Institutional Trust Lands Administration (SITLA) to the Utah State Engineer, the Natural Resources Department and the Water Rights Division in August 2012 to allot water rights to the company in the Wah Wah Valley, near the project site.

Potash Ridge said that the approved water rights would meet the requirements of the project as outlined in the prefeasibility study, published late in 2013.

The water rights were approved for an initial term of 20 years, subject to certain conditions, with the term being eligible for additional extensions so long as the project continued in operation.

“We are extremely pleased to have secured these water rights which represent a significant milestone in the development of the project. I would like to thank SITLA for their support throughout this important regulatory process. We are continuing to move the project forward in our efforts to develop the project into an anticipated future source of SOP production,” Potash Ridge president and CEO Guy Bentinck said.

Because the project is located on SITLA lands, Utah's public education system stands to gain substantial revenue over the life of the mineral lease.

The Blawn Mountain project has an estimated 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 SOP 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 SOP and 59-million tons of sulphuric acid.

In the last six months, the company’s TSX-listed stock had doubled in value to end at C$0.295 on Friday.