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Western Potash has brought in one of the big guns in the mining industry to develop its Milestone potash project in Saskatchewan, Canada.
The Vancouver-based company (TSX:WPX) said this week that it has hired Richard Lock, P.Eng., as project director to develop Milestone, a billion-tonne deposit that Western plans to mine using the solution method, where steam is injected into the potash deposit to dissolve the mineral.
Lock, a 24-year veteran of the mining industry, has developed diamond, oilsands and copper mines. He began his career with De Beers-Anglo American in South Africa, then later joined Rio Tinto’s Diavik diamond project in Canada’s Northwest Territories, where he took the project into production. Lock also managed the design and construction of a bitumen recovery plant for Canadian oilsands mining giant Canadian Natural Resources. Most recently, he worked at BHP/ Rio Tinto’s Resolution copper project in Arizona, where he was responsible for pre-feasibility studies and on-site activities including multiple shaft-sinking for exploration. The project hosts the third largest copper orebody in the world and would produce a quarter of U.S. copper supply.
Patricio Varas, President & CEO of Western Potash Corp., commented: “We are delighted to have Richard join our project development team. Richard is a mine builder. He is a highly experienced mining professional with the skill set necessary to move a project of this scope through the feasibility process. Richard’s depth of experience and proven track record in all phases of engineering and construction are key ingredients that will help Western effectively execute on all our project processes. This appointment to the Milestone Project sends a clear signal that the company is effectively assembling a world class team, dedicated to bringing a world class Potash project to production. Those of our management team that have worked with Richard at Diavik and Resolution relish the opportunity to work together to deliver the newest independent potash mine in Saskatchewan.”
Western Potash, with a market cap of $219 million, has been trading this week at between $1.36 and $1.41 a share.
MINING.com reported last November that Western Potash has failed to catch fire with investors despite upping its projected capacity of the Milestone project by 12% to 2.8 million tonnes per year, lowering its capex and opex cost projections, and talk of a possible takeover:
Scotia Capital commented that state-owned entities from Brazil, India and China could be interested in Western Potash to secure supply outside of Canpotex and Russian producers which together control around 57% of global supply.Analyst Marc Davis writes the project’s “independent” status is of significant strategic value since Canpotex, the marketing and distribution arm of Saskatchewan’s three dominant potash producers is notorious for demanding lofty prices.
Western Potash may also be actively looking for a big partner as going it alone on the $2.7 billion project would probably be too much to bite off. Western Potash executives maintain the takeover talk is premature and that the company wants to build Milestone on its own.
According to Western Potash’s pre-feasiblity study it can mine for $91 per tonne using the solution mining method – potash contract prices are currently around $476/tonne. Commercial production is set for 2016 with full operating capacity will be reached six year later with a life of mine of 40 years.
