Keras Resources plc, London, on Jan. 22 announced the signing of a five-year 50:50 Joint Venture Agreement between its wholly owned organic phosphate subsidiary, Falcon Isle Resources Corp. (FIR), Salt Lake City, and PhoSul LLC, Sugar City, Idaho, an organic soil enhancement fertilizer company with granulator operations in Idaho.
The jv includes the construction and commissioning, funded by Phosul, of FIR’s five ton per hour granulator plant near Delta, Utah. The plant will produce a PhoSul® granulate comprising 80% of FIR’s organic rock phosphate from its Diamond Creek mine in Utah. FIR will sell mesh rock phosphate to the jv, estimated at 11,000 tons per year at its cost of production. It said this would be an approximate 200% increase on FIR’s 2023 sales of 4,606 tons.
To facilitate the expansion in processing capacity, FIR has agreed to acquire an 8.4 acre property with 77,000 square feet of recently constructed undercover warehouse infrastructure for $700,000 from Western Ag Credit. The facility was constructed within the past 10 years.
The property is located in the farming town of Sutherland, eight miles north of Delta, Utah, and approximately 80 miles southwest of the Spanish Fork operations. FIR will continue to produce its current dry phosphate products as well as the new PhoSul® JV granulates at the Delta facility. Commissioning of the plant is expected by the end of April 2024.
Keras said it believes the current operations in Spanish Fork will, over the next few years, come under increasing pressure from residential development. As a result, Keras has been assessing the option to move operating facilities. It said the consummation of the jv was the catalyst for the move and provided the financial security required for both the acquisition and funding.
Keras also noted that the new warehouse size at 77,000 square feet, which has Agricultural Industrial zoning and a Conditional Use Permit already approved, more than doubles Spanish Fork’s 33,000 square feet.
Keras noted that Burningham Enterprises Group, FIR’s mining and logistics contractors, have mining and processing operations in the Delta area, which facilitates reduced back-haul trucking rates from the Diamond Creek mine to the new Delta headquarters. It said this largely mitigates the increased trucking distance from Diamond Creek to Delta compared to Spanish Fork, but Delta is considerably closer to the company’s end markets in the Western US.
Keras said the transition from Spanish Fork to Delta will begin immediately and is expected to be completed around the end of April 2024.