MagMinerals Potash Corp., together with its Congolese subsidiary MagMinerals Potasses Congo SA ( MPC ) are developing a potassium chloride (KCl), (more commonly referred to as potash) production plant (the “Project”) to be located close to Pointe-Noire in the Republic of Congo (“ROC” or “Congo”).
MPC owns exclusive rights to the Project, one of the world’s largest undeveloped potash deposits. The immediate focus of MPC is to construct and commission a 1.2 million tonne per year (tpy) potash plant to produce agricultural-grade potash fertilizers to meet growing demand from markets in Asia, South America, South Africa and Europe. The facility is scheduled to start production in 2015 and is expected to be among the world’s lowest-cost producers due to its highly efficient solution mining technologies, access to local natural gas and its proximity to planned new port facilities and its principal markets.
In late 2008 MPC signed a twenty-five year Potash Investment Agreement with the government of the Republic of Congo granting exclusive rights to MPC for the development of the Project and all fiscal aspects of its operations. An independent feasibility report was completed by SNC Lavalin in 2008 which detailed capital and operating costs. This study has been re-evaluated and updated by China’s Changsha Institute to reflect an increase in initial capacity from 600,000 tpy to 1.2 million tpy and optimized sourcing from China and world technology leaders.
In June 2009, a National Instrument 43-101 compliant technical report estimated proven and probable reserves of 33.2 million tonnes of potash which can support a reserve life of more than fifty-four years at a projected production rate of 600,000 tonnes per year. The 2009 Technical Report estimated proven reserves of 151.2 million tonnes of carnallitite, at a carnallite grade of 64.4% of ore and a KCl grade of 17.3% of ore, concluding with proven reserves of 26.1 million tonnes of KCl. The 2009 Technical Report further estimates probable reserves of 40.3 million tonnes of carnallitite, at a carnallite grade of 65.7% of ore and a KCl grade of 17.6% of ore, concluding with probable reserves of 7.1 million tonnes of KCl. Please refer to the June, 2009 Updated Reserve and Resource Estimate for MagMinerals Mengo Permit Area, Kouilou Region, Republic of Congo, available in the Reports and Articles section of our Resource Library on this site and on www.SEDAR.com.
The plant site is construction ready, supported by a well equipped base camp.
The gas supply agreement the Company signed In March 2009 with Eni Congo S.A. is being renegotiated to ensure sufficient gas for the expanded 1.2 million tpy project; the Environmental and Social Impact Analysis is being revised as well to match the new project parameters, including re-thought infrastructure solutions to provide robust, flexible and efficient operations for the planned configuration plus potential expansions in the future.