Western Potash files updated technical report for Milestone, provides other updates

Western Potash Corp. (TSE:WPX) said Friday it has filed an updated NI 43-101 technical report summarizing a previously-announced preliminary feasibility study on its Milestone potash project in Saskatchewan, as well as announcing other updates.
The technical report includes an updated resource estimate, and a summary of the company’s pre-feasibility study announced in late October.
The company said the updated resource estimate slightly increases the Milestone recoverable potash resource to 66.6 million tonnes in the measured category, 186.9 million tonnes of indicated resource, and 708.2 million inferred tonnes.
The inferred resource around the Milestone project plant site land and associated infrastructure have been removed from the estimate, Western Potash added.
In October, the junior miner said an independent prefeasibility study (PFS) confirmed its 100 percent-owned Milestone potash property showed "significant positive economics".
The study, carried out by AMEC Americas, showed that the asset was of sufficient size and grade to support mining for more than forty years at a production rate of 2.8 million tonnes per year. The annual production rate can also be expanded through a higher level of capital expenditure, the company said.
An assessment of project economics, aassuming a discount rate of 10 percent, showed the resulting project net present value is C$4.14 billion, while the internal rate of return is 22.7 percent.
The initial capital expenditure estimate for the plant is $2.76 billion, including allowances for port infrastructure, a water supply pipeline, and off site railway. An allowance of $300 million for port infrastructure was excluded from the company’s scoping study completed in 2010. Unit operating costs were estimated to be $62.35 per tonne at full production capacity.
The company also reported Friday that environmental baseline data required for the preparation of the environmental impact study (EIS) for the project has been collected.
The EIS remains on schedule and on budget, with an anticipated submission date of the third quarter of 2012.
The Milestone property, comprising 500 square kilometres, is located 30 kilometres southeast of Regina, and southeast of Mosaic’s Belle Plaine Mine, one of the largest producing potash solution mines in the world.
In other news, Western Potash said it signed an agreement with Amarillo Gold Corp (CVE:AGC) to acquire potash mineral rights in Brazil.
Amarillo, through its Brazilian subsidiary, submitted applications on behalf of the company for 113 potash permits totaling 982,962 hectares within potash prospective portions of the Brazilian Amazon Basin, with permits having now been granted.