New feasibility study outlines 70-year potash mine for Karnalyte
Canada's Karnalyte Resources has unveiled an updated feasibility study for its Wynyard project in central Saskatchewan, outlining a 70-year mine life and positive economics that could underpin one of North America’s longest-running potash operations.
The study, prepared by Wood Canada, ERCOSPLAN, RESPEC and March Consulting, supports a total planned output of 142.2 million tonnes of potash, or 2.175 million tonnes a year, as well as 7 million tonnes of hydromagnesite across the life of the mine.
The Wynyard project, located 175 km east of Saskatoon, is positioned to deliver “stable, derisked long-term returns”, supported by a secured offtake agreement and access to established regional infrastructure.
CEO Danielle Favreau said the updated study confirms the expected strength and longevity of its Wynyard deposit. “Our disciplined focus on efficiency and growth has positioned us to advance the project toward successful development as we invest in operational planning."
She added that the operation was designed to provide resilient, long-term cash flow backed by robust resources, reserves and market fundamentals.
“Supported by robust estimated mineral resources and mineral reserves, planned potash production capacity, and a secured offtake agreement with our strategic partner, the Wynyard project is designed to deliver stable returns and reliable future cash flow. As potash is essential to global food security, our competitive cost structure and positive market fundamentals, backed by strong price forecasts, provide a solid platform for long-term value creation.”
The feasibility study outlines an after-tax net present value of C$2.04 billion at an 8% discount rate and an after-tax internal rate of return of 12.5%. Payback is estimated at 8.8 years.
Initial capital costs are forecast at C$4.19 billion, comprising C$3.96 billion for the three-phase potash processing operation and C$231 million for the hydromagnesite facility. Sustaining capital over the 70-year mine life is estimated at C$7.62-billion.
Operating costs are expected to be C$134.01/t for potash and C$318.04/t for hydromagnesite.
The project’s offtake agreement with major shareholder Gujarat State Fertilisers and Chemicals covers 350 000 t/y from Phase 1, increasing to 600 000 t/y in Phase 2, with the option to lift volumes to 1 million tonnes a year in Phase 3.
Long-term potash pricing assumptions range from $438/t to $516/t depending on product and location, while hydromagnesite prices are projected at $740/t for natural material and $1 409/t for synthetic product.
Measured resources stand at 1.16 billion tonnes grading 47.9% carnallite and 6.1% sylvite, while indicated resources total 1.79 billion tonnes and inferred resources 3.9 billion tonnes across the Patience Lake, Belle Plaine and Esterhazy members.
The deposit’s ability to support both potash and magnesium-based products positions the project to diversify into additional magnesium chemicals, pending further evaluation.
The project is expected to create about 244 permanent operating jobs and 1 100 construction roles.
Karnalyte will submit an amendment to its 2013 environmental approval to incorporate future expansion phases and maintain compliance with provincial requirements.
