Western Resources Corp., Vancouver, B.C., said on July 27 it plans to refocus on subsidiary Western Potash Corp.’s Milestone Potash Phase 1 and gradually phase out of the company’s real estate investments in order to improve its financial position and complete the potash project. The company said it began selling off its real estate earlier this year, and hopes to have the sales completed by the end of the third quarter.
Since suspending construction of the potash project in May 2020 (GM May 15, 2020), Western said it has continued advancing and optimizing its mining operations, which it said is key to securing the remaining project financing required to complete the balance of plant construction.
From April 28, 2020, when hot mining started (GM May 1, 2020), until its suspension on May 28, 2021, Western said it has accumulated extensive experience and collected valuable mining data relevant to the application of its solution mining technology. After analysis of the data, and with the help of solution mining experts, Western is developing an optimized solution mining plan.
The new plan is to focus on the increase of solution mining efficiency and life span of the mining caverns. Western has engaged a third-party engineering firm to review the operation plans and update its National Instrument 43-101 technical report.
The updated report will also include an anticipated increase in the project’s mine life from 12 to 40 years. Key findings of the report are expected to be released by mid-October 2021.
As for financing, Western thanked all the contractors and suppliers for their understanding and support, and said a majority of key creditors have agreed to extend Western’s payment deadlines, which enables it to focus on obtaining the investments necessary to secure project financing.
The company hopes to complete financing by end of this year, which is expected to allow Western to pay off outstanding creditors, and to restart mining operations and project construction.
As of May 2020, Western reported that Milestone Phase 1 was already 83 percent complete in the overall status, and had completed engineering, procurement, and construction of infrastructure, crystallization pond, electrical distribution systems, brine heating, and pumping systems to support operation of commercial solution mining.
In 2019, Western reported that Archer Daniels Midland Co. (ADM) had entered into a binding offtake agreement for 100 percent of the potash production (146,000 mt/y) from Milestone Phase 1 (GM Sept. 27, 2019).