Wednesday, July 17, 2013

Pre-feasibility study for Holbrook potash mine - 1.42 million tons per year

Prospect Global Resources, Denver-based parent of American West Potash, released the pre-feasibility study for their proposed underground mine in the Holbrook basin of eastern Arizona [right, American West landholdings in light tan in eastern part of map.   Checkerboard blocks are square mile sections. Credit, Passport Potash].  Among the highlights:

  • 1.42 million tons per year operation
  • $825 million estimated capital cost
  • $1.4 billion NPV at an 8% discount rate
  • 27% after-tax IRR
  •  Initial mine life of 26 years
  • Life of mine operating costs of $115 per ton
  • Peak production of 1.55 million tons
  • 33 million tons of total MOP production over initial 26 year mine life
  • Approximately 1.3 million tons per annum of production over life of mine

 The company said  it plans an infill drilling program beginning in early August.   A complete new resource estimate is expected by the end of 2013 with a complete Definitive Feasibility Study by the third quarter of 2014.


  1. Why are they using an obsolete map that omits the newly acquired lands of Petrified Forest N.P.?

  2. If you are referring to the map in my blog post, it is an older one I chose because it shows the companies land holdings nicely.

    The boundary of the park was extended in 2004 but Congress did not provide funds to buy private and state lands inside the expansion area. A conservation group purchased the surface rights to some of the lands where the mineral rights were sold to American West but that get's complicated to show. Those surface rights are proposed to be donated to the Park Service or may have already been transferred. The Park was trying to acquire other lands as well as I recall but I haven't been following that closely enough to know what's happened there.