Phosphate Mineral Resource/Reserves and Prefeasibility Study
Agapito Associates, Inc. (AAI) was commissioned by Stonegate Agricom Ltd. to complete a Canadian National Instrument 43-101 independent Mineral Resource/Mineral Reserve estimate and Preliminary Feasibility Study (PFS) for the Paris Hills Phosphate Project located in Paris, Idaho. The Project represents a new underground phosphate rock mine in southeast Idaho and the first new underground phosphate mine to operate in the Phosphoria Formation since the 1970s.
AAI initially participated in the design of the exploration drilling program, geological logging program, and quality assurance/quality control (QA/QC) protocol for assaying. Carlson Software was utilized to develop a computer geologic block model of the bedded deposit for estimating the Mineral Resource. Block values were estimated utilizing an unbiased geostatistical (kriging) estimator.
The PFS encompassed the exploration, geologic modeling, resource and reserve estimation, mine planning and design, mining methodology and equipment, hydrogeology modeling, surface infrastructure requirements, labor, beneficiation test work results, fertilizer processing pilot plant test work results, phosphate rock ore handling, environmental and permitting, mine closure, marketing, royalty agreements, project economics, project development schedule, and risks in support of a direct shipping run-of-mine ore (phosphate rock concentrate) greater than 29 percent phosphorus pentoxide (P2O5).
A detailed underground room-and-pillar mine plan with partial pillar extraction was developed at mining depths ranging from outcrop to more than 600 meters (2,000 feet) deep. Mine projections were developed based on key deposit parameters, geotechnical analysis, and equipment constraints, which included thin seam and steeply dipping mining conditions, a soft rock environment, high groundwater inflows, and the need to minimize out-of-seam dilution to achieve a direct-ship phosphate rock concentrate. The PFS considered key transportation alternatives for delivering phosphate concentrate to market, including an option to truck the ore to a Montpelier, Idaho, rail loadout facility located on the Union Pacific Railroad.
AAI coordinated subconsultant experts on marketing (CRU International Ltd), hydrology (Whetstone Associates, Inc.), seismic interpretation (Boyd PetroSearch), traffic studies (J-U-B Engineers, Inc.), environmental (Brown & Caldwell), and various components of surface site facilities and infrastructure design (DcR Engineering). AAI completed the geotechnical design which included laboratory rock mechanics testing of core from the exploration program.
The PFS identified the project as having a $242 million pre-tax net present value (NPV) (8% annual discount rate) with a 4.6 year pre-tax payback, and an after-tax NPV of $179 million.
AAI authored two NI 43-101 Technical Reports, one at the Mineral Resource stage and the second following completion of the PFS and Mineral Reserves declaration. AAI engineers and geologists served as Qualified Persons for the Technical Reports.