Stonegate Agricom Ltd.’s recently completed pre-feasibility study concludes that 10 million tons of concentrate-quality phosphate can be extracted from an underground mine on a lower zone of its Paris Hills project in Southeast Idaho. Compiled by Agapito Associates of Grand Junction, Colo., the study projects the mine’s life would extend 14 years, reaching more than 800,000 tons in the third year and more than one million tons in the fifth year.
Acquired by Toronto-based Stonegate in 2009, the mine property encompasses about 2,490 acres in Bear Lake County. The property is approximately two miles from the small towns of Paris and Bloomington, 12 miles from rail transportation, and close to power lines and a major highway.
The Paris Hills Phosphate Project is wholly owned and under development by Idaho-based Paris Hills Agricom Inc., a Stonegate subsidiary.
The study estimates that developing the total project would require $134.3 million, including a contingency of $16.1 million and working capital of $6.5 million. The cash operating cost would be $72.99 per ton of saleable product, with an assumed average product price of $160 per ton.
Total life-of-mine capital expenditures are estimated at $238.7 million, including $24.1 million for contingency, $149.2 million initial project capital expenditure to the end of the third year of production, and $89.5 million of sustaining capital expenditures for the rest of the mine’s life.
Of total capital costs, about 68 percent would be related to underground equipment and facilities, and the balance for surface equipment and facilities.
“With the completion of our work on the Paris Hills pre-feasibility study, Stonegate has achieved a major milestone in the development of our high-grade phosphate deposit in Idaho,” said Mark Ashcroft, president and chief executive officer.
Ashcroft said the study’s results show the mine would have competitive operating costs and would be well-positioned to supply phosphate rock to North American fertilizer producers and/or Asian fertilizer producers via U.S. West Coast ports. He said that the project has an important advantage because of the lower zone’s high-grade concentrate quality – ranging as high as 32 percent phosphorus pentoxide – and that it can be shipped directly without incurring the operating costs associated with a processing plant typically required at phosphate mines.
He added that the deposit’s phosphate could be used successfully as a concentrate to make phosphoric acid, diammonium phosphate (DAP), and monoammonium phosphate (MAP).
“Additional engineering work, laboratory testing and project analysis are under way, and Stonegate expects to achieve its previously announced objective of completing a bankable feasibility study by the end of 2012,” said Ashcroft.
The latest study’s estimates are based on assay results for drill core obtained from definition drilling between September 2010 and February 2012. Stonegate plans additional drilling on property. An updated compliant estimate for both the lower and upper zones is expected to be published in the second half of 2012.
Transportation costs to potential customers would be about $11 per ton by truck in Idaho, and $21 per ton by truck to Montpelier, Idaho, and then by rail to the U.S. West Coast ports in Washington or Oregon.
Stonegate also is developing the Mantaro Phosphate Project in Peru.
