Millennial Potash Secures 70% Interest in Gabon Project with Strong Economic Potential
TL;DR
Millennial Potash achieves 70% interest in Banio Potash Project, potentially leading to low-cost solution mining operation with strong economic potential.
The company earned 70% interest in Equatorial Potash Pty, including milestone payments and filing a Preliminary Economic Assessment (PEA) for the Banio Potash Project.
The low-cost solution mining operation at the Banio Potash Project has the potential to make a positive economic impact with a strong post-tax NPV of US$1.07 billion.
Millennial Potash Chairman Farhad Abasov shared news on the company's achievement of a 70% interest in the Banio Potash Project through Proactive.
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Millennial Potash Corp. has secured a 70% interest in the Banio Potash Project located in Gabon after filing a Preliminary Economic Assessment and making substantial milestone payments. The company earned this interest in the shares of Equatorial Potash Pty, which holds full ownership of the Banio Potash Project through its Gabon subsidiary, Mayumba Potasse SARL. To reach this milestone, the company submitted a PEA and made payments totaling $300,000 along with 1 million shares of MLP to the project vendors.
The PEA report highlights the Banio Potash Project's potential as a low-cost solution mining operation based on an annual production target of 800,000 tonnes of granular muriate of potash, a key fertilizer component essential for global food security. The project stands out with remarkably low capital expenditure estimate of US$480 million and operational expenditure of US$61 per tonne of muriate of potash, placing it among the most cost-effective in the industry. These favorable economics are attributed to the project's thick potash horizons and planned use of solution mining techniques.
Financial projections show impressive results with a post-tax Net Present Value of US$1.07 billion and an Internal Rate of Return of 32.6%, indicating strong potential for profitability and return on investment. The significance of this development extends beyond corporate success as global demand for fertilizers continues to rise due to population growth and the need for increased agricultural productivity. Projects like Banio could play a crucial role in ensuring stable potash supply to the world market, with the low-cost production model potentially allowing for more competitive pricing that benefits farmers and contributes to global food security efforts.
The project's location in Gabon adds strategic importance, potentially establishing a new hub for potash production in Africa with positive implications for regional economic development and diversification of the global potash supply chain currently dominated by a handful of major producing countries. Millennial Potash plans to continue implementing recommendations from the PEA, including preparations for additional drilling at the North Target area to expand the resource base and potentially enhance the project's already robust economics.
As the global agriculture sector faces increasing pressure to boost yields sustainably, projects like the Banio Potash Project become increasingly important. The combination of low production costs and substantial output potential positions Millennial Potash to potentially become a significant player in the global potash market. The company's progress could serve as a bellwether for the broader potash mining sector, particularly for projects in emerging markets, potentially setting new benchmarks for efficiency and profitability in potash production that could influence future industry developments.
Curated from News Direct
