Crystal Peak Minerals Inc., Toronto, is upbeat after revealing the results of a recently completed feasibility study of its Sevier Playa Sulfate of Potash (SOP) Project, located in southwestern Utah. “We are very pleased with the results of this study,” said John Mansanti, CEO, Jan. 11. “Through extensive fieldwork, comprehensive hydrologic modeling and analysis, bench scale and pilot test work, and thousands of hours of engineering, we have arrived at a study that demonstrates strong and robust fundamentals. This report captures the exciting potential for our project.”
The study forecasts average annual SOP production over the 30-year life of the project of approximately 298,000 mt/y, and proven and probable produced mineral reserves of 6.171 million mt of SOP. Total capital costs are put at $412 million.
Crystal Peak believes it can market the approximately 300,000 mt/y capacity while maintaining an international price premium for the product over muriate of potash (MOP). The company plans to sell most of its product into U.S. markets. The company noted that SOP historically exhibits a premium over MOP – recently more than 50 percent. The company used a starting price of $630/mt for SOP.
The economic analysis in the study is based upon the following assumptions: 100 percent equity; construction beginning January 2019, completed 2022; SOP production ramp-up over three years, from first production of 27,500 mt in 2022 to full capacity of at least 337,500 mt in 2025; production continues at full capacity until 2040; production declines annually to 223,110 mt by 2050; operating costs and revenues based on product delivery to (e.g., MOP) or shipment from (SOP) Crystal Peak’s rail loadout facility; effective tax rate of approximately 15.6 percent; annual production royalties estimated at 5.61 percent of gross revenue, less allowable reagent costs; and post-performance tax credit from the State of Utah of approximately $112.5 million.
The company envisages adding MOP to the process to increase SOP production.
The feasibility study, prepared by Novopro Projects Inc., Norwest Corp., and CH2M HILL Engineers Inc., was only for SOP. Since there are other associated minerals present, the company anticipates completing a study in early 2018 that will consider extraction and production of magnesium chloride, calcium sulfate, and other potentially valuable products.