Vancouver-Potash One said last week that a pre-feasibility study (PFS) of its Legacy potash project in Saskatchewan gives it a value of US$4.47 billion. This is an estimated net present value after tax at a 10 percent discount rate. The PFS estimates are based on estimated capital and operating costs for a 2.5 million mt/y potash solution mine, a financial model based on 100 percent equity, and future potash prices. The initial mine life is 40 years. Estimated capital cost is $1.877 billion, including allowances for contingency, risk, and escalation. The estimated after-tax and royalty internal rate of return is 30.1 percent. “The PFS study estimates confirm our view that the Legacy project has the potential to become a high quality, long-life potash solution mine with robust economics,” said Paul Matysek, Potash One president and CEO. “We have a sizeable resource, a best in class technical team and a strategic plan for international capital investment. By utilizing proven solution mining technology, we believe that Potash One will develop a scalable, low risk mining operation which could see its first production as early as Q4 2013.”
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