Canada Potash Ridge agrees on long-term lease for Utah project

25 March 2014 22:41 Source:ICIS News

HOUSTON (ICIS)--Canadian fertilizer producer Potash Ridge announced on Tuesday it has exercised its option to convert its exploration agreement into a long-term mining lease for its Utah sulfate of potash (SOP) project.

Toronto-based Potash Ridge’s flagship project is the Blawn Mountain Project in southwestern Utah. The goal is the production of significant amounts of SOP, which is premium-priced fertilizer used with special crops and soil types.

The producer and its landlord, the Utah State School and Institutional Trust Lands Administration (SITLA), initially had entered a three-year exploration agreement in April 2011 and provided Potash Ridge with the right to convert to the mining lease at a cost of $1.02m on or before 31 March 2014.

Potash Ridge officials said the company has agreed with SITLA to provide the agency an initial payment of $200,000 followed by five equal semiannual payments of $164,000 starting in March 2015.

The lease has an initial term of 10 years but company officials said the lease could remain in effect as long as the operation is producing at a profitable level and that the agreement is another step in helping advance the project to an operational status.

“By entering into the mining lease we have secured the long-term rights to develop and operate the Blawn Mountain Project. The agreement reached with SITLA demonstrates the strong relationship and support the corporation has developed with SITLA and the State of Utah,” said Guy Bentinck, Potash Ridge CEO.

The company is projecting annual SOP production of 645,000 tonnes when at full capacity and anticipated an average of 1.4m tons of sulphuric acid will be produced at the site per year. The SOP will be marketed domestically and globally, while sulphuric acid will be marketed to existing phosphate producers as well as to regional copper and gold miners.

Potash Ridge said construction is scheduled to begin in late 2015 with production starting in 2017. Initial capital cost for the project has been calculated at $1.1bn with the company anticipating possibly spending approximately $641m for infrastructure and utility upgrades.

 

By Mark Milam