USGS releases first study to assess global earthquake risk to mineral supplies
Earthquakes have the potential to substantially affect mining operations, leading to supply chain disruptions that adversely affect the global economy.
Encanto Potash (TSX-V:EPO) stock gained 2% on Monday bringing its 2013 gains to 27% after the Saskatchewan junior released a positive pre-feasibility study for its Muskowekwan property in the south of the Canadian province.
Encanto, worth $72 million in Toronto, said the PFS confirms Muskowekwan can support a mine for over 50 years with a muriate of potash production rate of 2.8 million tonnes per annum.
“The initial CAPEX estimate for the plant is $2.86 billion and includes estimates for water supply, gas pipeline and a cogeneration plant and includes a contingency and escalation of $460 million,” said Vancouver-based Encanto.
Operating costs were estimated at $54.32/t at full production capacity with royalties and taxes adding another $64.76/t. Logistical costs are estimated at $50.50/t and sustaining capital costs were estimated at $32.21/t at full production and include well field extension, and tailings management.
Construction is envisaged for the second quarter of next year with start-up early 2017.
In January Encanto published details of an agreement with a Kuwaiti concern to raise $7 million and appointed two new directors. At the time details of a possible deal by Encanto with India’s Rashtriya Chemicals and Fertilizers Ltd. (RCF) also emerged.
The proposed agreement with the Indian concern calls for an offtake agreement for 2 million tonnes of potash at an 8% discount to market price – worth roughly $736 million a year.
A similar deal was inked by another potash junior – Karnalyte Resources – to provide India with the fertilizer ingredient from a proposed new mine in the Canadian province the week before.
