Junior fertilizer project developer Karnalyte Resources Inc., Saskatoon, said on March 19 both of its fertilizer projects in Saskatchewan – the Proteos Nitrogen Project and the Wynward Potash Project – are still under consideration.
In 2020, Karnalyte completed the preparation of a pre-feasibility study of Proteus and continued to prepare Wynyard for development.
Proteos is a proposed regional-scale nitrogen fertilizer plant to be located in central Saskatchewan, with a nameplate capacity of 700 mt/d ammonia and 1,200 mt/d urea. The primary target market is local, independent wholesalers within a ~400-kilometre radius of Saskatoon, with a secondary target market of Midwest U.S. wholesalers near the Canadian border.
Karnalyte said while the Proteus prefeasibility study completed in 2020 is not sufficient to conclusively arrive at a project execution decision, it allows the company to determine whether the project should remain in consideration as part of the company’s future business strategy.
The prefeasibility study’s key conclusions included: the preliminary economic viability of the project approached company benchmarks; potential market growth of urea in Saskatchewan to approximately 2.64 million mt, up from current demand estimates of approximately 1.2 million mt, based on Government of Saskatchewan information; and the project’s implementation is expected to require three years following the preparation of a detailed project report and assuming a positive investment decision and commencement of construction by Karnalyte.
Karnalyte is encouraged by the results of the prefeasibility study, and similar to potash, nitrogen fertilizer prices have also been on a rally in recent months due to a supply/demand gap in the U.S. because of an increase in cropland planted areas and an increase in demand from China. Karnalyte will continue to seek strategic partners for Proteos and consider it with discipline and caution due to the significant capital expenditures required to move the project forward.
While the company was encouraged by the recent uptick in potash prices in the U.S., it said those for India and China were only slightly higher. It said it will continue to monitor the potash situation.
In 2021, the company plans to complete the strategic review that was initiated in 2020 and solidify a strategic direction for the company. It expects to announce the results of this review once the market sounding phase of the project is complete. It will also be necessary in 2021 for the company to spend time and financial resources in dealing with various court actions commenced against it (GM Feb. 5, p. 32).