Just last month the combined JORC Measured and Indicated Resources increased 265% to 959 million tonnes at 15.11% K2O (23.93% KCl), while the Inferred Resource increased to 513 million tonnes at 15.33% K2O (24.27% KCl).
Considerable exploration upside remains at Kola, with mineralisation open in several directions.
The Sinkoutola Potash Project hosts a high grade predominant sylvinite resource with exploration upside. The shallow depth of the resource allows for large scale, low cost mining.
The project, which covers over 1,400 square kilometres, is the only Tier 1 greenfields potash project outside of North America.
The initial project economics are attractive with an internal rate of return of 27% and a net present value of US$990 million (12%) for a 1.8 million tonne per annum operation with a 20 year mine life.
Sinkoutola is strategically located within a region that hosts established infrastructure, including a deepwater port and industrial hub at Pointe Noire 90 kilometres away.
Potash consumption will experience sustained growth of around 4.5% between 2010 and 2014, driven by world population growth, shrinking arable land per capita, changes in global diets and growth in alternative fuels.
Brazil, the world's second largest potash importer, is forecast to more than double its potash imports from 6 million tonnes in 2010 to 12.2 million tonnes in 2025. Importantly, Elemental is well placed to export its potash product to Brazil.
A Definitive Feasibility Study is forecast for completion in the March quarter if 2013.
Base case for PFS outlined by Elemental
Conventional Mining producing 2 million tonnes per annum MoP
- Focus on sylvinite, start-up 2015
- Road transport of ROM ore on dedicated haul road using Australian style high volume road trains.
- Service road upgrade
- Central scalable process plant located at the coast
- Good flotation kinetics
- Excellent process recovery
- Brine disposal in the ocean
- 42 MW Required from national grid
- Investigate Gas fired self generation in parallel
- Gas line for product drying - 2,820 scm/h
- Water sourced from ocean and/or nearby lakes
- Jetty facility at Tchiboula adjacent to plant - trans shipment
- Employment of approximately 800 people
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