Western Potash files resource on Milestone

When it comes to location it doesn’t get much better than this. Western Potash Corp.’s (WPX-V) Milestone property in Saskatchewan is 35 km southeast of one of the largest producing potash solution mines in the world, Mosaic’s (MOS-N) Belle Plaine operation.

The 500-sq-km Milestone property just 25 km southeast of Regina also happens to adjoin both Vale‘s (VALE-N) Regina potash property and potash permits held by BHP Billiton (BHP-N).

With real estate like that, Western Potash was confident that Milestone’s salt beds would deliver a solid National Instrument 43-101 resource estimate.

The maiden estimate released today has defined an indicated resource of 32 million tonnes grading an average of 28.37% KCL or potassium chloride, a metal halide salt made up of potassium and chlorine.

In the inferred category Milestone has estimated resources of 230.3 million tonnes grading an average of 28.45% KCL.

The company forecasts it will be able to move the indicated resources into the measured and indicated category early in the second quarter of the calendar year.

Western Potash believes Milestone offers competitive advantages including that it is amenable to solution mining. That method has lower capital costs, reduced engineering risks and a shorter timeline to production, the company notes on its website. Solution mining is also scalable, which means production can be scaled to demand.

In addition Milestone has a minimum formation temperature of 62 degrees Celsius, a key factor in the economics of solution mining. A solution mine, that can access a higher formation temperature, will produce more potassium chloride in solution as the solubility of potassium increases with temperature, offering savings in capital, energy and processing costs, the company says.

The news sent the junior up 4¢ or 8.5% to 51¢ per share with 2 million shares changing hands.

Over the last year Western Potash has traded in a range of 22.5¢-84¢ per share and has 103 million shares outstanding.