Junior miner Western Potash Corp., Regina, Sask., a unit of Western Resources Corp., Vancouver, B.C., announced on June 6 that it has entered into a lump-sum agreement with major Canadian construction firm Stuart Olson Prairie Construction, Calgary, to be the General Contractor for the construction of the company’s Milestone Phase I Potash Project, near Kronau, located 35 km southeast of Regina.
“The management and board of directors are very excited to partner with Stuart Olson to build this innovative and efficient new mine in Saskatchewan,” said Western Potash Chairman Bill Xue. “The project will benefit from the strength and experience of Stuart Olson, and we look forward to the next milestone, the start of production in mid-2020.”
Western Potash said the site is now ready for the start of full construction with Stuart Olson. It said preparation work has already been concluded, including an access road, site clearing and piling foundations, water well, water pipeline, and power infrastructure. The civil work of the crystallization pond has also been completed.
The company said Stuart Olson will begin mobilizing at the site this month. An anticipated maximum workforce of around 100 people is expected. Stuart Olson’s general contractor scope will include the construction of all above-ground facilities, including concrete, steel and pipework, installation of equipment, electrical and control system work, building work, and site finishing.
Phase 1 includes an annual capacity of 146,000 mt of granular potash, with a mine that the company said will be the “newest and most innovative, environmentally-friendly, and capital efficient new potash mine in Canada.” It said its advanced drilling techniques will initially target the high-grade potash bed by using selective dissolution, preferentially leaching potash to the surface.
The company said any salt is left underground, with no tailings pile, and that water consumption will be cut in half. The potash is then crystallized naturally in a pond, resulting in much lower energy consumption and a capital cost proportionately less than other solutions mines. Once Phase I is achieved, Phases II and III are much more aggressive, each with annual capacity goals of 1.4 million mt.
The company advanced major goals in 2018, including the financing and a nonbinding Memorandum of Understanding with a senior North American agriculture player for transportation and offtake (GM April 27, 2018). It later developed a nearby water well to supply Phase 1 that will use brackish water and not compete with the water needs of the local populace. The company also retained SNC-Lavalin, Toronto, for the final stage of project engineering.
This April, parent Western Resources completed a rights offering that brought in gross proceeds of C$11.2 million, which will be used for the project as well as general corporate purposes. Major stakeholders Tairui Mining Inc., a unit of Chinese investment firm Beijing Tairui Innovation Capital Management Ltd., as well as CBC (Canada) Holding Inc., a unit of China BlueChemical Ltd. and Benewood Holdings Corp. Ltd., were both major subscribers to the offering.
After its completion, Tairui’s Western Resources stake stood at 59.09 percent and CBC’s at 10.1 percent.