TORONTO, July 19, 2017 /CNW/ - Potash Ridge Corporation ("Potash Ridge" or the "Corporation") (TSX: PRK), a near term producer of premium fertilizer in North America, today announced a restructuring of its executive management team. Effective immediately, Andrew Squires becomes President and Chief Operating Officer, Ross Phillips will assume the role of Vice President, Corporate Development and Chief Commercial Officer, and Guy Bentinck will continue as Chief Executive Officer. Mr. Squires brings over three decades of international resource development experience in the energy and natural resources industries.
In addition, R. Bruce Duncan and Arthur Roth have been named Chairman and Vice Chairman of the Board of Directors, respectively.
"These changes strengthen the leadership team and will provide additional resources for the development of the Valleyfield and Blawn Mountain projects," stated Bruce Duncan, Chairman.
Potash Ridge is also pleased to provide a corporate update on the first half of 2017 and provide guidance into the second half of 2017.
The Corporation continues to make significant progress in advancing both the Valleyfield Mannheim potassium sulphate ("SOP") project in Quebec and its flagship Blawn Mountain SOP and alumina project in Utah.
Demand for SOP remains very strong globally, in particular in North America, where consumers continue to experience supply shortages. North American SOP prices exceeded US$640/tonne in Q1 2017. Potash Ridge is developing two near-term, North American-based SOP projects into a market where there is currently only one domestic producer.
The Corporation recently announced additional leadership strength and skill sets with the appointments of Mr. R. Bruce Duncan, Mr. Arthur J. Roth and Mr. Andrew Squires as Directors. Mr. Duncan has over 30 years experience in the capital markets and brokerage industry, including eight years with Gordon Capital Corporation. Mr. Roth's career spans 50 years, focused predominately in the fertilizer and chemical industry, with extensive experience in project management, logistics and distribution. Companies that Mr. Roth has held significant positions with include IC Potash, Helm Fertilizer, Amax Chemicals, and International Minerals and Chemicals.
"We are currently focused on bringing Valleyfield into production. With a fixed capital cost, known and proven process, and significant commercial agreements in place, we have a clear path to construction, production and cash flow in the near term for Valleyfield," said Guy Bentinck, Chief Executive Officer. "Additionally, it is our strong belief that Blawn Mountain has the ability to become a world class disruptive global producer in the SOP sector with its excellent project economics, including long resource life and low production cost. Recent interest in our by-product alumina has the potential to enhance the robust economics at Blawn Mountain."
Potash Ridge achieved significant milestones in advancing its wholly-owned Blawn Mountain SOP Project during the first half of 2017, including:
- Secured unencumbered mining lease rights for the Blawn Mountain Project with the final instalment of US$0.7 million being made in June 2017 to the Utah School and Institutional Trust Lands Administration pursuant to the terms of converting its Exploration and Option Agreement for the Blawn Mountain property into a Mining Lease; and
- Published an updated NI 43-101 compliant pre-feasibility report in April 2017, which included the following:
- Expected to be the lowest cost producer of SOP in North America: average net cash operating costs after by-product sulphuric acid credits of $177/ton of SOP (exclusive of royalties), which includes approximately $40/ton in transportation costs;
- Projected after-tax net present value of $482 million using a 10% discount rate, with no terminal value added to the NPV, which assumes no extension to life of operations;
- Unlevered after-tax internal rate of return of 20.1%, based on assumed price of $675/ton for SOP and $115/ton for sulphuric acid in 2020 and 2% inflation;
- Proven and probable mineral reserves of 153 million tons which support a 46-year project life;
- 19.4 million tons of measured and indicated alumina resources, which represents potential upside for the project as these resources are not currently incorporated in the project economics;
- An average of 255,000 tons of SOP per annum during first 10 years of operation after ramp-up; life of mine average of 232,000 tons of SOP per annum;
- Flexible process capable of producing both crystalline soluble and granular potassium sulphate to meet market conditions;
- Installed potassium sulphate capital cost of $456 million; and
- Potential economics upside with:
- Expansion of initial production rate;
- Possible monetization of the residual waste material given its high concentrations of alumina.
Potash Ridge also made significant progress this year in developing its wholly-owned Valleyfield SOP project, including:
- Secured a lump-sum engineering, procurement and construction contract with SNC-Lavalin for the construction of Valleyfield;
- Secured an off-take agreement with a leading integrated agriculture organization for up to 25% of the annual production of SOP;
- Signed off-take and funding arrangement with Jones-Hamilton Co., a leading U.S.-based chemicals company, whereby Jones-Hamilton will fund the hydrochloric acid equipment for Valleyfield and exclusively sell 100% of the hydrochloric acid production from Valleyfield;
- Agreed to a five-year contract with a major North American chemical company for 100% of Valleyfield's sulphuric acid requirements; and
- Engaged Novopro Products Inc. to act as lead Owner's Engineer to advance the project through final engineering and construction completion.
Focus for Second Half of 2017
Over the next six months, Potash Ridge will focus on:
- Securing a financing package for Valleyfield that is expected to include both debt and equity components at the project level;
- Continuing to advance discussions with SOP off-take partners for Valleyfield and Blawn Mountain;
- Completing detailed engineering for Valleyfield;
- Obtaining requisite environmental permits for Valleyfield;
- Obtaining commercial agreements with parties interested in Blawn Mountain's alumina resource;
- Completing additional metallurgical testing;
- Advancing the technical and commercial aspects of the alumina resource to incorporate the alumina in the economics of a NI 43-101 compliant report; and
- Obtaining a fixed price EPC contract for the development of Blawn Mountain.
About Potash Ridge
Potash Ridge's strategy is to become the premier producer of SOP in North America. The Corporation owns two SOP projects: the Valleyfield Project in Quebec that plans to produce SOP through the Mannheim Process; and the Blawn Mountain Project in Utah that plans to produce SOP by mining and processing alunite bearing rock. Potash Ridge has a highly qualified management team and board of directors with significant financial, project management and operational experience with a proven track record of taking projects into production.
This press release contains forward-looking statements, which reflect the Corporation's expectations regarding future growth, results of operations, performance and business prospects. These forward-looking statements include statements related to advancing the Valleyfield Project and may also include statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may", "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "guidance" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These statements are not historical facts but instead represent the Corporation's expectations, estimates and projections regarding future events. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the state of the equity capital markets; the receipt of any required approvals for the private placement; the future financial or operating performance of the Corporation and its subsidiaries and its mineral projects; the anticipated results of exploration activities; the estimation of mineral resources; the realization of mineral resource estimates; capital, development, operating and exploration expenditures; costs and timing of the development of the Corporation's mineral projects; timing of future exploration; requirements for additional capital; climate conditions; government regulation of mining operations; anticipated results of economic and technical studies; environmental matters; receipt of the necessary permits, approvals and licenses in connection with exploration and development activities; appropriation of the necessary water rights and water sources; changes in commodity prices; recruiting and retaining key employees; construction delays; litigation; competition in the mining industry; reclamation expenses; reliability of historical exploration work; reliance on historical information acquired by the Corporation; optimization of technology to be employed by the Corporation; title disputes or claims and other similar matters.
If any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained herein. Such assumptions include, but are not limited to, the following: that general business, economic, competitive, political and social uncertainties remain favorable; that agriculture fertilizers are expected to be a major driver in increasing yields to address demand for premium produce, such as fruits and vegetables, as well as diversified protein rich diets necessitating grains and other animal feed; that actual results of exploration activities justify further studies and development of the Corporation's mineral projects; that the future prices of minerals remain at levels that justify the exploration and future development and operation of the Corporation's mineral projects; that there is no failure of plant, equipment or processes to operate as anticipated; that accidents, labour disputes and other risks of the mining industry do not occur; that there are no unanticipated delays in obtaining governmental approvals or financing or in the completion of future studies, development or construction activities; that the actual costs of exploration and studies remain within budgeted amounts; that regulatory and legal requirements required for exploration or development activities do not change in any adverse manner; that input cost assumptions do not change in any adverse manner, as well as those factors discussed in the section entitled "Risk Factors" in the Corporation's Annual Information Form (AIF) for the year-ended December 31, 2016 found on sedar.com. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
SOURCE Potash Ridge Corporation
For further information: Ross Phillips, VP, Corporate Development and Chief Commercial Officer, Tel: 416-362-8640 ext. 103, [email protected]