South Harz Potash is progressing discussions relating to access to an existing shaft that could deliver time, capital cost and footprint advantages. Pic via Getty Images.
Mining
Special Report: South Harz Potash is advancing technical and commercial discussions in relation to the third-party Bernterode shafts that could accelerate development of its Ohmgebirge project in central Germany.
In November 2023, the company reached a non-binding memorandum of understanding with its neighbour Deusa for the long-term use of the existing Bernterode shaft and associated infrastructure.
This offers South Harz Potash (ASX:SHP) a brownfields development pathway that offers substantial time, capital cost and footprint advantages over constructing a shaft from scratch as the Bernterode shafts are just 1,500m from the Ohmgebirge tenement boundary.
While a scoping study for Ohmgebirge released in 2022, which has a resource of 338Mt grading 12.91% K2O, outlined a robust 21 year, 1Mtpa muriate of potash (MOP) operation which a indicated a post-tax net present value and internal rate of return (IRR) of US$1.28bn and 26.6% respectively.
The company continues to advance detailed technical and commercial discussions with Deusa to outline a definitive commercial agreement that will give it long-term access and utilisation rights for Deusa’s Bernterode shaft and associated infrastructure.
SHP current preliminary layout contemplates the raw ore storage in the area adjacent to the shafts along with the purification. The solution will then be transported via a pipeline the short 1.5km distance to the site by the Bernterode railway siding.
The evaporators, crystallisers and product storage will be adjacent to the railway and loadout facility.
It is also progressing the Pre-Feasibility Study, which is now about 90% complete and remains on track for completion in early Q2 2024.
All key PFS workstreams continue to progress well, with the overarching focus now moving to more advanced levels of engineering thoroughness, estimate accuracy, and robust contingency planning.
Capital and operating cost estimations are in the process of being conclusively assembled by leading global engineering consultant and study manager Hatch.
Additionally, South Harz’s Spatial Planning Application for Ohmgebirge, which was submitted in early December 2023, is now proceeding through the regulatory evaluation process.
This permitting process remains on track for targeted receipt of a spatial planning decision during Q2 2024.
“We continue to make strong progress on both our collaborative activities with Deusa and approaching completion on remaining PFS workstreams,” chief operating officer Lawrence Berthelet said.
“It is an extremely busy but exciting time at South Harz as we advance closer towards targeted finalisation of a brownfield development pathway for Ohmgebirge that can deliver substantial capital, footprint and time efficiencies.”
This article was developed in collaboration with South Harz Potash, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
