Karnalyte completes Phase 1 optimisation at Wynyard

VANCOUVER (miningweekly.com) – Potash project developer Karnalyte Resources has completed the first phase of its optimisation programme for the Wynyard potash mine, in Saskatchewan.

The company reported that it had, through a cold leaching process that lasted about three months, successfully developed an underground production cavern from which the potash brine solution would be mined.

"We are encouraged by the results from the first stage of the optimisation programme. It has the potential to significantly improve the already strong metrics of our project,” stated Karnalyte president Robin Phinney on Thursday.

The company is now preparing to undertake the second stage of the optimisation programme, which will comprise a hot-leaching phase to produce a concentrated potash brine solution. This will be accomplished by injecting heated source water into the production cavern, recovering the concentrated brine solution and analysing the potash concentration levels.

Karnalyte reported that the heating equipment, piping and natural gas supply had been installed for the second stage of the optimisation programme. The company expected the second stage to start this month, and that it would run until the end of October.

The company had already secured sales of more than half of the planned 625 000 t/y potash output from the project’s first phase through an offtake agreement with India-listed agribusiness firm Gujarat State Fertilisers and Chemicals, and would now focus on securing sales for the remaining 44% of its potash production from Phase 1, Karnalyte advised.

The unique composition of the Wynyard carnallitite deposit enables the company to produce high-purity potash products with low sodium content.

"Karnalyte believes that by following a strategy of providing agricultural producers with a superior grade product – at or near the same price point as the industry's granular products – we will ensure the company can secure sales for the remaining 44% of our potash production from Phase 1," Phinney stated.

Karnalyte advised that it was exploring multiple options for the sale of its potash products, including entering into a strategic partnership with an existing potash producer in Saskatchewan.

The potash market has, in recent quarters, been under significant pressure as lower demand and weaker prices have placed major operations at risk. Emerging market currency weakness relative to the US dollar has also weighed on the fertiliser market. However, stronger demand in 2017 is expected to lift spot prices.

The market faces an oversupply situation, with several operations currently on care and maintenance, while more significant developments are expected to come online within the next few years.