Potash West is upbeat about its WA potash project, which is estimated to cost up to $880 million to develop a minimum 39-year operation.
The Belmont-based explorer today released the results from its scoping study into its Dandaragan Trough project, located 150km north of Perth.
The study confirmed the technical and financial viability of the project and presented two development options, one producing 2.4 million tonnes per annum (mtpa) over a 60-year mine life and the other a 4mtpa rate over a 39-year mine life.
At the lesser rate of production, the study pegged capital costs at $650 million, with operating costs at $77 a tonne and revenue at $205/t. The net present value was booked at $808 million, with an internal rate of return of 21 per cent.
Net present value for the 4mtpa production rate was estimated at $1.16 billion, with an internal rate of return of 20.7 per cent. Capital costs were estimated at $880 million with operating costs at $72/t while revenue was at $184/t.
Managing director Patrick McManus the company would now progress through to a definitive feasibility study.
“We believe we are in a position to capitalise on the long-term dynamic of increasing demand for high quality materials feeding the food supply and agricultural industries,” he said.
Shares in Potash West closed up 0.5c to 27c today.