TSX: WPX FSE: AHE
VANCOUVER, Jan. 11, 2016 /CNW/ - Western Potash
Corp. (WPX: TSX) (FSE: AHE) (the "Western", "the Company") is
pleased to provide the following update to shareholders.
2015 was a transformational year for Western. Shareholders
would be aware of the negative tone of much of the news in the
potash industry, highlighted by a declining price for the commodity
and signs of an over supplied market. Investors have now
experienced several years of difficult markets for most companies
in the mining industry with those in the potash and other
fertilizer businesses being no exception. It is not news that
one of the major challenges has been the scarcity of capital for
the development of projects, where only the most exceptional
projects have attracted significant amounts of capital. In
the face of this challenging environment and following a detailed
due diligence process, Western was pleased to announce a strategic
investment of CAD $80 Million from
the Chinese private equity firm Tairui Innovation Capital
Management Ltd., closing in September of 2015. Along with the
cash injection, Western was pleased to receive the additions at the
board level of Geoffrey Chang in the
position of Chairman of the Board, and Bill
Xue as a Director. Both individuals bring significant
experience in the financing, development and operation of resource
projects. For Western, the financing represents confirmation
of the extraordinary attributes of the Milestone Potash Project in
a financing environment where the race for development funding is
highly competitive.
Western made the decision to re-scope the Milestone Project in
2015 with the aim of investigating alternative methods of mining
the deposit. While traditional solution mining methods in
Saskatchewan have been successful
for many years, the Company understood that to follow such a path
would require a multi-billion dollar project finance package. With
the belief that a scalable approach was required, the Company
re-engaged its engineering consultants and delivered the "Scoping
Study for a Pilot Plant Scale Selective Solution Mining Operation"
in July of 2015. A scalable model will provide the Company
with the ability to develop the project in stages, starting with
the pilot plant but without the need for an initial capital
requirement in the billions. Project economics are
attractive in the current potash price environment with initial
start-up capital estimated to be in the range of the CAD
$80 Million invested by Tairui.
Western management and its engineers made use of the decades of
potash mining expertise available in Saskatchewan and considered technological
advancements currently in use in potash and salt mining operations
around the globe including the use of horizontal drilling.
Predominantly used in the oil and gas industry, horizontal drilling
is used effectively to mine potash in the Western United
States. Equally important for the Company is the reduction in
capital intensity per tonne of potash production at
Milestone. In a low price environment, the study outlines a
low operating cost project on an industry wide relative basis with
comparatively attractive capital requirement levels versus other
potash projects as the Milestone pilot plant scales up from a
projected annual production of 146,000 tonnes. Solution
mining operations provide the advantage of lower capital
expenditure requirements compared to typical conventional potash
mines.
Having confirmed Environmental Assessment Approval, the Company
is currently engaged in a series of technical meetings with
consulting engineers with the aim of being construction ready in
2016.
Western registered a project company, the Milestone Potash Corp.
in Saskatchewan as a wholly owned
subsidiary of Western Potash Corp. as the company transitions its
focus to construction of the pilot plant project.
In addition to ongoing community engagement initiatives, in
November of last year the Company met with representatives of the
Saskatchewan Ministry of the Economy in Regina. Discussions
were focused around an update of Western's progress, as well as job
creation in Saskatchewan and
ongoing adjustments to taxation for potash production in the
province.
During the latter half of the year, a settlement was reached
with UBS Securities Canada Inc. in the matter of a dispute over
financial advisory fees resulting from the engagement of UBS in
2013.
The Company instituted a Normal Course Issuer Bid share buyback
program in late October of 2015. Management feels that
overall market dynamics as well as potash industry fundamentals
have contributed to downward pressure in the share price of Western
Potash. Meanwhile the positive Company fundamentals are not
reflected in the price of the shares. To date a total of
1,353,000 shares have been purchased at an average cost of
$0.21 per share. The shares are
currently held in the Company's brokerage account.
Since inception and through the recent transformation, Western
senior management has remained fundamentally intact. This
continuity helps maintain a knowledge base and level of consistency
and familiarity with the project, the stakeholders and the province
of Saskatchewan. The Company prides itself on this level of
commitment to its people and its shareholders.
Shareholders are invited to visit the Company website at
www.westernpotash.com for more information on the Milestone
project, newly posted photographs, as well as, more information on
the Company's major shareholders.
ON BEHALF OF THE BOARD OF DIRECTORS
"Geoffrey Chang"
Geoffrey Chang
Chairman
Cautions Regarding Forward-Looking Statements
Except for statements of historical fact relating to the
Company, certain information contained herein constitutes
"forward-looking information" under Canadian securities
legislation. Forward-looking information includes, but is not
limited to, statements with respect to the filing and results of
the Technical Report. Forward-looking statements are based on the
opinions and estimates of management as of the date such statements
are made and they are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results
of the Company to be materially different from those expressed or
implied by such forward-looking statements or forward-looking
information. Although management of the Company has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not to
be as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking information. The Company does not
undertake to update any forward-looking information that is set out
herein, except in accordance with applicable securities
laws.
SOURCE Western Potash Corp.