Nov 302011

By Teri Walker–

American West Potash has released a timeline for developing a potash mine east of Holbrook, and in conversations with Holbrook city leaders the company president reportedly said it’s possible a mine could be operational by early 2014.

American West Potash President and CEO Pat Avery met with Holbrook Vice Mayor Charles Haussmann and City Manager Ray Alley recently, and Haussmann reported Avery said the company could break ground on an underground mine as early as late 2013.

Avery has said, “My board (of directors) has told me to move forward as rapidly as possible.”

Avery noted the board of directors is eager to move quickly toward mine development based on the company’s recently released resource report, which indicated the amount and grade of potash present in the company’s land holdings in the Holbrook Basin are greater than anticipated, and the belief that the mine could compete favorably within the potash industry.

Where Avery had estimated his company might expect to extract one to two million tons of potash annually from American West holdings, results of initial exploration have shown the company could potentially extract 2.5 to 3 million tons each year.

American West, a Denver-based company, is the first company to publicly release a mine development timeline in the Holbrook Basin. Passport Potash, which is based in Vancouver, Canada, and Apache Junction, Ariz., is in its second phase of exploration in the basin and has said it expects to complete its initial resource estimate detailing how much potash it could pull from its land holdings by the first quarter of 2012. HNZ Potash, which is a subsidiary of Hunt Oil of Texas, has released little information about its exploration activities.

The timeline offered by Avery details the company’s planned activities through 2012.

Having just completed its resource report in early November, the company is now working on its preliminary economic analysis, which Avery says will be completed by the end of 2011. The economic analysis will confirm that American West’s potash stores are commercially and economically viable.

During the first half of 2012, American West will begin the second phase of drilling to further determine the boundaries of the company’s potash holdings. Avery says an additional eight to 10 wells will be drilled. He expects the drilling will result in increasing the amount of potash confirmed to be present in American West’s holdings.

Also in 2012, American West will undertake a feasibility study for the development of a conventional underground mine, with a surface flotation plant where the potash mineral will be separated from other salts and substances pulled from the earth, prepared and sent to market. The feasibility study will incorporate the findings from the second phase of drilling.

Environmental studies will be conducted in addition to the drilling and preparation of the feasibility study in 2012.

During the first half of 2012, American West will begin preparing its mining plan of operations.

By March 2012, Avery plans to begin filing applications for permits with various regulatory and oversight agencies including the Arizona State Land Department, Arizona Department of Environmental Quality, and Arizona Department of Mines and Mineral Resources.

During the second half of 2012, Avery says engineering of the mine and surface facilities will begin.

“In addition to receiving permits, this is the final step prior to construction,” said Avery.

“As shown since commencing exploration activities in early 2011, American West Potash remains committed to being a steward of the land; working in close coordination with the local communities, Petrified Forest National Park and (the) State of Arizona; and creating economic, long-term benefits for the local communities and the State of Arizona through the creation of jobs and the generation of royalties and taxes,” Avery said in a prepared statement.

American West has contracted with Tetra Tech, a California-based consulting and engineering firm, to conduct its preliminary economic analysis, environmental studies, feasibility study and mine planning. North Rim Exploration, Ltd., of Saskatoon, is conducting the second phase of well drilling and analysis.