TORONTO (miningweekly.com) – Phosphate project developer Stonegate Agricom plans to resume permitting activities for its proposed Paris Hills underground phosphate mine, in south-east Idaho, after groundwater testing conducted during the summer confirmed previous groundwater pumping assumptions used in the 2012 feasibility study.

The company in January temporarily halted permitting activities owing to financial constraints after third-party consultants, which were appointed to finalise the groundwater model for permitting applications, had provided a range of estimates of expected groundwater flow rates into the planned underground mining area. This would require the company to undertake more testing and analysis that might include additional engineering work.

Stonegate now planned to resume permitting activities that included updating the groundwater model with the latest testing data, before submitting a permit application.

"The news on the testing is very good because it confirms the third-party consultant's groundwater pumping assumptions for the Lower Phosphate zone. We can now put the delay caused by the uncertainty over the groundwater estimates behind us and we can proceed as we had previously planned to submit permitting applications,” chairperson and CEO Ian McDonald said, noting that the company now expected to receive the final permits for the Lower Zone mine in 2016.

He explained that Paris Hills’ Lower zone, as confirmed in the feasibility study, had an advantage over competing mines owing to its high average reserve grade of 29.5% phosphorus pentoxide (P₂O₅), which was within the range of phosphate rock concentrate grades of 28% to 32% P₂O₅ from sedimentary deposits that were typically bought by fertiliser manufacturers.

“This allows us to direct ship the Lower Zone phosphate material without any beneficiation or processing. Our situation is unique in the US, since other phosphate deposits have average grades ranging from 10% to 23% P₂O₅ and require additional capital expenditures for beneficiation plants to produce a concentrate," McDonald advised.   

Meanwhile, in parallel with permitting work planned in the months ahead, Stonegate would aim to reduce overall operating costs by further exploring possible ways of optimising the Lower Zone mine plan through changes to mine sequencing, staff scheduling and crushing, among other factors.

Also, the company intended to proceed with feasibility work for Paris Hills' Upper Phosphate zone, focusing on the mineable portion of its 60.3-million tonnes of 22.7% P₂O₅ measured and indicated resources for direct shipment to beneficiation plants elsewhere. This work was expected to be complete early in 2016.

To pay for the planned activities in future, Stonegate proposed to raise more funds this year.

FEASIBILITY
In December 2012, Agricom published results of a feasibility study for developing an underground mine in the Lower Phosphate zone of its fully owned Paris Hills phosphate project, placing a $477.5-million net present value on the project.

The Lower Phosphate zone's high grade was an important advantage for the project, as the mined material would be concentrate quality and could be shipped directly without incurring the capital or operating costs associated with a processing plant.

The feasibility study focused only on the horizontal limb of the Lower Phosphate zone and the results did not include the potential of the Upper Phosphate zone horizontal limb, for which an estimate of mineral resources was published in August. It also did not include the potential of the upturned limb, which was regarded as an exploration target.

The project, which could be constructed for $121-million, was expected to produce phosphate concentrate at a rate of 904 000 t/y, requiring no beneficiation.

Production and reserves over the expected 19-year life-of-mine (LoM) were stated to be 16.7-million tons of direct-ship, concentrate-quality phosphate rock with an average LoM grade of 29.5% P₂O₅.

Production was expected to be about 320 000 t in the first year and to ramp up to commercial production levels of 740 000 t in the second year and 885 000 t in the third year.

The study also found that the mine would produce phosphate at a cash operating cost of $69.49/t of concentrate free-on-board and that the expected sale price of $165/t could be achieved.

The mine was expected to achieve a pretax internal rate of return of 45.9%.

According to the feasibility study, initial production was expected to start late in 2014.