WPX Executes Crown Subsurface Mineral Lease, Files Scoping Study Executive Summary

Vancouver, November 1, 2010 - WESTERN POTASH CORP., (the “Company”) (TSX Venture: WPX) is pleased to announce that the Province of Saskatchewan has granted the Company a subsurface mineral lease on its 100% owned Milestone property in southern Saskatchewan.  The lease was granted by Special Agreement under Section 4(b) of The Crown Minerals Act, and contains more than 87, 500 acres of Crown held mineral leases.

The renewable, twenty one year lease was granted by Ministerial order and provides the Company with the full and exclusive power and right to mine Crown owned subsurface minerals, including potash, contained within the lease area, subject to the provisions outlined by The Saskatchewan Subsurface Mineral Regulations, 1960.  The granting of this lease is one of the key steps towards the development of the Milestone Potash Project.

The Company is also pleased to announce that further to its news release dated September 20, 2010, it has filed today with the Canadian securities regulators, a summary (the "Summary") of the work and results of the Milestone Potash Project Scoping Study (the “Study”) dated September 2010. The Study was prepared exclusively for Western Potash by AMEC Americas Limited (“AMEC”). The Study was based on, and supported by the, “NI 43-101 Technical KP 408 and KP 409, Saskatchewan”, dated July 12, 2010, and filed on SEDAR on July 16, 2010 (the “Report”) prepared by Agapito Associates Inc. and was reported in the Company’s news release dated June 3, 2010.  The Summary was compiled by Western Potash Corp., and will be available on SEDAR at www.sedar.com on November 2, 2010 and also on the Company's website at www.westernpotash.com.

This Study confirmed that the Milestone resource shows significant positive economics and that the asset is of sufficient size and grade to support solution mining for more than forty years at a production rate of 2.5Mt/yr. 

Highlights of the Study include:

Initial Mine Life

 40 years

Annual Potash Production (Primary and Secondary)

 2.5 Mt/yr  KCl

Total Estimated Project Capital Cost

 CAD$2.51 Bn

Project Unit Operating Costs

 CAD$ 62.90/t

Estimated Net Present Value (NPV10)

 CAD$5.22 Bn

 Estimated After-Tax and Royalty IRR

 27.3%

After-Tax Payback Period

 7.3 years

  • High formation temperatures at Milestone (60 to 65¡C) reduce operating costs by 8.5%  when compared with other solution mining projects in Saskatchewan that access lower (50 to 55¡C) fo­­­­­rmation temperatures. 
  • Long Term Potash Gate Price: The CRU Group provided yearly potash price estimates for the 2015 to 2025 period.  The resulting average price of $US 511/t was then assumed for the 2025 to 2055 period.
  • Other assumptions: Assumes a flat US$ exchange rate. Construction is assumed to take place over a two year period, production beginning in project year three. CAPEX based on 100% equity. Tax and royalties were calculated using a flat rate of CAD$28.90/t.
  • Since the analysis is based on a cash flow estimate, it should be expected that actual financial results may vary from these predictions. An accuracy assessment of the cost estimates was completed as part of this study and is estimated to be ±35%.

The Study recommends immediate commencement of a Pre-Feasibility study based on the attractive economic assessment presented.

The 100% owned Milestone property, comprising 500 square kilometers, is located 30 kilometers southeast of Regina, and southeast of Mosaic’s Belle Plaine Mine, one of the largest producing potash solution mines in the world.

Western Potash Corp. is a mineral exploration company engaged in the evaluation, exploration and development of potash mineral properties in Western Canada.  The Company intends to define and develop a world-class potash deposit in an ecologically sustainable, economically efficient and socially responsible manner.

The in-house qualified persons for the purposes of NI 43-101 guidelines are J. Patricio Varas, P. Geo and Dean Pekeski, P. Geo, both of whom have reviewed and approved the contents of this news release.

For more information on Western Potash Corp.’s projects, please visit the Company’s website at: www.westernpotash.com

ON BEHALF OF THE BOARD OF DIRECTORS

“J. Patricio Varas”
J. Patricio Varas
President and CEO

This news release contains Forward Looking Statements regarding our intentions and plans. Forward looking statements in this news release include: that the Province of Saskatchewan has granted the Company a subsurface mineral lease on its Milestone property in southern Saskatchewan; that the lease was granted by Special Agreement under Section 4(b) of The Crown Minerals Act, and contains more than 87, 500 acres of Crown held mineral leases: that the renewable, twenty one year lease was granted by Ministerial order and provides the Company with the full and exclusive power and right to mine Crown owned subsurface minerals, including potash, subject to the provisions outlined by The Saskatchewan Subsurface Mineral Regulations, 1960; that the granting of this lease is one of the key steps towards the development of the Milestone Potash Project; that the company has filed today with the Canadian securities regulators, a summary (the "Summary") of the work and results of the Milestone Potash Project Scoping Study (“the Study”) dated September 2010; that the Study was based on and supported by, the NI 43-101 Technical report on KP 408 and KP 409, Saskatchewan”, dated July 12, 2010 and filed on SEDAR on July 16, 2010 (the “Report”) prepared by Agapito Associates Inc.; That the Summary report was compiled by Western Potash Corp., and will be available on SEDAR on November 2, 2010 and on the Company's website; that the Study confirmed that the Milestone resource shows significant positive economics and that the asset is of sufficient size and grade to support solution mining for more than forty years at a production rate of 2.5Mt/yr; that highlights of the Study include: a Total Estimated Project Capital Cost of CAD$2.51 Bn , a Project Unit Operating Costs of CAD$ 62.90/t, an Estimated Net Present Value (NPV10) of CAD$5.22 Bn, an Estimated after-tax and royalty IRR of 27.3% , an After-tax payback period of 7.3 years; that high formation temperatures at Milestone (60 to 65 0C) reduce operating costs by 8.5% when compared with other solution mining projects in Saskatchewan accessing lower (50 to 55 0C) formation temperatures; that the CRU Group provided average yearly potash price estimates for the period from 2015 through 2025; that the study assumes a flat US$ exchange rate; that construction is assumed to take place over a two year period; that production is assumed to begin in project year three; that the CAPEX was based on 100% equity; that Tax and royalties were calculated using a flat rate of CAD$28.90/t; that since the analysis is based on a cash flow estimate, it should be expected that actual financial results may vary from these predictions; that an accuracy assessment of the cost estimates was completed as part of this study and is estimated to be ±35%; that the Study recommends immediate commencement of a pre-feasibility study based on the attractive economic assessment presented.  It is the Company’s policy not to update forward-looking statements other than as required by applicable securities laws and regulations. Various factors may prevent or delay our plans, including but not limited to, contractor availability and performance, weather, access, mineral prices and success and failure of the exploration and development carried out at various stages of the program.  Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company.  

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

 

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