About Crystal Peak Minerals
The History, Meet the Team and more
In the 1970's, a Utah geologist, Murray Godbe, began the first known systematic study of the Sevier Playa with the intention to produce valuable minerals. Godbe and his team found indications of a vast pool of brine containing potassium and other important chemicals. Supported by a Texas financier, W. D. Hayden, Godbe leased the majority of the dry lake's surface securing land from the BLM as well as from SITLA, a Utah state land agency.
The team drilled hundreds of wells taking brine samples across the vast lake surface and from many depths. After several years of study, and shortly before the project was set to enter full development and production, W. D. Hayden suddenly died. Not long afterward, Murray Godbe died. The heirs briefly tried to market the project but ultimately gave up. After a period, the leases returned to their respective government agencies.
In 2008, Emerald Peak Minerals LLC formed to resurrect the project. After securing SITLA leases from the State of Utah, Emerald Peak Minerals partnered with Crystal Peak Minerals Inc. to secure the financing necessary to obtain the federal leases from the Bureau of Land Management. Crystal Peak Minerals Inc. raised about $30 million dollars (CAD$) and won the federal acreage needed to define the project. Through subsequent negotiations, Crystal Peak Minerals Inc. increased its holdings. Today, it directly controls almost 96,000 acres through its wholly-owned U.S. subsidiary Crystal Peak Minerals Inc. and has agreements to operate more than 28,000 additional contiguous acres.
On November 18, 2013, Crystal Peak Minerals Inc. announced the filing on SEDAR of a National Instrument 43-101 technical report entitled “NI 43-101 Technical Report Preliminary Feasibility Study of the Sevier Lake Playa Sulphate of Potash Project, Millard County, Utah” dated effective October 25, 2013 by CH2M HILL Engineers, Inc., Agapito Associates, Inc., and Norwest Corporation (the “Technical Report”). The Technical Report outlines the results of the Preliminary Feasibility Study (“PFS”) of Crystal Peak Minerals Inc. Sevier Lake Playa Sulphate of Potash Project located in southwestern Utah. Crystal Peak Minerals Inc. first reported the economic results of the PFS in a press release dated October 29, 2013. The PFS forecasts average annual SOP production of 300,000 metric tonnes (t) with an estimated Net Present Value (“NPV”) of $629 million (after tax, inflated, 8% discount rate) and an estimated Internal Rate of Return (“IRR”) of 20% (after tax, inflated). The PFS includes an updated Mineral Resource Estimate that includes 31.486 million tonnes of SOP in the Measured and Indicated categories, a 7% increase from previously published estimates. This increase is due primarily to the results of recent drilling.
|NPV (pretax, 8%)||$957 M|
|NPV (after tax, 8%)||$629 M|
|IRR (after tax)||20%|
|Average Annual SOP Production||300,000 t|
|Mine Life||30 years|
|Initial Direct Capital Costs||$292 M|
|Initial Indirect Capital Costs||$50 M|
|Initial Capital Contingency||$36 M|
|Production Royalties (% of gross revenues)||5.61%|
|Year 3 EBITDA (nameplate production)||$143 M|
|Payback Period (from commencement of production)||5.5 years|
|Measured [&] Indicated SOP Resource||31.486 Mt|
The Economic Analysis
The PFS is based upon the following assumptions:
- 100% Equity
- Production Ramp-Up over two years, reaching full production in Year 3
- 50,000 tonnes in Year 1
- 100,000 tonnes in Year 2
- 300,000 tonnes in Year 3
- Construction on playa in Preproduction Year 3 (“PP-3”)
- Effective tax rate of approximately 29%
The economic analysis was based upon Measured and Indicated Mineral Resources only. No Inferred Resources were included in the analysis. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Although a PFS has been completed, Mineral Reserves will not be established until further verification of the hydrologic models via longer term pilot-testing planned during the Feasibility Study expected in 2014.
The total direct capital costs of the Project are estimated to be $292 M, not including indirect costs and contingency, as of 2013. All capital costs in the economic model are inflated by 2% annually beginning in year PP-3. Contingency is 12% of direct capital costs. The capital cost estimate has an accuracy of +25%/-20%.
Initial Capital Costs
|Playa Infrastructure||$49 M|
|Utility Infrastructure||$45 M|
|Plant Facilities [&] Equipment||$167 M|
|Rail Load-out Facility||$31 M|
|Direct Costs||$292 M|
|Indirect Costs||$50 M|
|Total Initial Capital Costs||$378 M|
|Sustaining Capital Costs (LoM)||$199 M|
The total cash operating costs of the Project are estimated to be $180.91/t
as of 2013. All operating costs in the economic model are inflated by 2%
annually beginning in year PP-3.
|Description||Unit Cost||% of Total|
|Reagents, Consumables [&] Maintenance||$40.34/t||22%|
|Salt Harvest [&] Haul to Rail||$37.57/t||21%|
|General [&] Administrative||$16.70/t||9%|
The full Technical Report is available on Crystal Peak Minerals Inc. SEDAR profile at www.sedar.com as well as on this website under the 'Technical Reports' link on our 'Investors' tab.