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July 23, 2009
Potash One Files Summary
of the Pre-Feasibility Study Report
Vancouver, Canada - Potash
One Inc. (TSX:
KCL) (the "Company" or "Potash
One") is pleased to announce that further to its news release
dated June 18, 2009, it has filed today with the Canadian securities
regulators, a 17 page summary (the "Summary") of the
Preliminary Feasibility Study (the "PFS") on its Legacy
potash solution mining project in Saskatchewan, Canada. The
Summary was compiled by Potash One Inc. The Summary will available on
SEDAR at www.sedar.com on July 24, 2009 and also on the Company's website at www.potash1.com.
The highlights of the Potash One - Legacy
Project include:
�
Initial Mine Life: 40 years
�
Measured Resources of 29 million tonnes and
Indicated Resources of 222 million tonnes of KCl Product
�
Annual Potash Production: 2.5 million tonnes
per year of KCl
�
Estimated Project Capital Cost - (Millions
US$)
Direct
Costs
1,134.8
EPCM
Services 133.7
Field
Indirects
44.6
Owner's
Cost 89.1
Commissioning
and
Start-up
15.7
Escalation
80.4
20%
Contingency
299.7
Risk
Allowance
78.5
Total
Estimated Project Capital Cost 1,877
�
Estimated after-tax and royalty Internal Rate
of Return (IRR) is 30.1%
�
Estimated Net Present Value (NPV) after tax at
a 10% discount rate is US$4.47 Billion
�
After-tax payback period of approximately 3.3
years
�
A Q2 2009-normalized flat line average
price of US$ 525 per tonne of KCl, FOB Vancouver over life of mine
�
Recommendation to Potash One by SNC Lavalin to
advance the Legacy Project to the Feasibility Study stage, based on the
favourable results of the PFS summarized above
The economic analysis was performed based on 100% equity and used
estimates of capital expenditures, major sustaining capital
expenditures and operating costs described in detail in the PFS.
Since the analysis is based on a cash flow estimate, it should be
expected that actual financial results would vary from these predictions.
An accuracy assessment of the cost estimates was completed
as part of the PFS and is estimated to be -20% to +35%.
Paul F. Matysek, President and CEO of Potash One stated, "Potash
One is pleased to have completed the Pre-Feasibility Study on our Legacy
Project. The results of the study clearly show that Legacy is a robust
project having an IRR of 30.1% even after providing for escalation,
risk allowances and contingencies, equivalent to 40% of the direct
costs of the project."
The Legacy
Project PFS was prepared by a team of world-class engineering and
specialized consulting firms with the following responsibilities:
- SNC-Lavalin
Inc. -- Compilation of study components, Plant Engineering, Cost
Estimating, and Project Economics (pre-tax)
- North
Rim Exploration and Agapito Associates - Geology
- Agapito
Associates, Cavern Engineering, and Potash One - Mining
- Golder
Associates - Environmental and Socio-Economic Aspects
- Swenson Technology -
Evaporation-Crystallization Technology
- Potash
One - Utilities and Off-Site Infrastructure
- Bull�e
Consulting - Sewage Treatment and Potable Water Treatment
- Hergott
Duval Stack and Partners - Taxation and Royalty impacts
- British
Sulphur Consultants - Market Analysis[1]
Mike Ferguson, P.Eng., Vice President,
Projects for Potash One Inc. is a Qualified Person as defined by NI
43-101 and has reviewed and approved the contents of this news release.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F.
Matysek, M.Sc., P.Geo.
President and Chief Executive Officer
Telephone: (604) 331-4431
Fax: (604) 408-4799
info@potash1.com
About Potash One Inc.:
Potash One Inc. is a well-funded TSX-listed Canadian resource company
engaged in the exploration and development of advanced potash
properties amenable to solution mining. The Company owns more than
515,000 acres of Potash Subsurface Exploration Permits in Saskatchewan,
Canada. It also includes the 97,240 acre Legacy Project which has an NI
43-101 Measured Resource of 29 million tonnes of KCl, Indicated Mineral
Resource of 222 million tonnes of KCl and an Inferred Mineral Resource
of 852 million tonnes of KCl. The Company has recently completed a
pre-feasibility with SNC-Lavalin with robust economics at current
potash pricing. The Legacy Project is adjacent to the largest producing
solution potash mine in the world.
Forward-Looking
Statements:
Statements in this release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed under the
heading "Risk Factors" and elsewhere in the corporation's
periodic filings with Canadian Securities Regulators. Such information
contained herein represents management's best judgment as of the date
hereof based on information currently available. Statements in
this press release other than purely historical information, including
statements relating to the company's future plans and objectives or
expected results, constitute forward-looking statements. Forward
looking statements are based on numerous assumptions and are subject to
all of the risks and uncertainties inherent in the company's business,
including risks inherent in mineral exploration and development. The
company does not assume the obligation to update any forward-looking
statement. There are numerous risks and other factors that will
influence a development decision, including concluding resource
evaluations on mineral properties, extraction and processing design
limitations, financing requirements, permitting risks and economic
factors, all of which may be beyond the control of the
company.
The Toronto Stock Exchange has neither approved nor disapproved the
contents of this press release
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