IC Potash Corp. has demonstrated a low-cost method to produce sulfate of potash (SOP) from its 100%-owned Ochoa polyhalite deposit in southeast New Mexico. The Company intends to become a primary, long-term producer of SOP. The global market for SOP is 5.5 million tons per year, with producers benefiting from substantial price premiums over regular potash, known as muriate of potash (MOP). SOP is a non-chloride potash fertilizer widely used in the horticultural industry and for high value crops, such as fruits, vegetables, tobacco and potatoes. It is applicable for soils where there are substantial agricultural activity, high soil salinity, and in arid regions. The Ochoa project has access to excellent local labor resources, low-cost electricity and natural gas, water, rail lines, and the Port of Galveston, Texas. ICP’s land holdings consist of 102,000 acres of federal subsurface potassium prospecting permits and State of New Mexico potassium mining leases.

Capital Cost

The capital cost of the Ochoa project is estimated to be $1,018 million, with an accuracy of +/-15%. Preparation of the capital cost estimate is consistent with standards defined by the Association for the Advancement of Cost Engineering International for a Class 3 Estimate. The table below summarizes the total estimated capital cost by major area.

Estimated Capital Cost by Major Area (millions)
Mine Infrastructure and Development $107
Process Plant $527
Storage and Loading $37
Total Direct Costs $671
EPCM Services $99
Construction Indirect $22
Freight, Spares, and First Fills $34
Total Indirect Costs $155
Owner Costs $80
Contingency $112
Project Total $1,018


Operating Cost

Operating costs for the Ochoa project are based on scheduled production, equipment requirements, operating hours, equipment operating costs, and manpower requirements. Steady state has been defined as the operating years from 2022 through 2065. Steady state years generally exclude major one-time costs that are included in years 2017 through 2021, such as start-up activities, equipment rentals, initial receding face expenditures, and inventory adjustments.

Estimated Operating Cost Per Ton of SOP
Steady State Production 714,400 Tons Per Year of SOP
Mining Cost Per Ton $78
Processing Cost Per Ton $108
General and Administrative Cost Per Ton $9
Total Operating Cost Per Ton $195
% of Operating Cost – Labor 24.8%
% of Operating Cost – Electricity 24.5%
% of Operating Cost – Natural Gas  20.7%