Armchair Trader venture pick Sage Potash Corp [TSXV:SAGE] has achieved what it is calling an ‘essential milestone’ in its operational roadmap.
The company has obtained regulatory approval from Utah’s Department of Natural Resources, Division of Water Rights, for the Fixed-Time Application that grants Sage Potash permission to withdraw up to 0.207 cubic feet per second (CFS) or 150 acre-feet of brackish water annually.
The permission is effective until July 31, 2043. Water will be procured from the proposed access well for extraction and year-round use within the entire Sage Plain potash project, consisting of over 88,000 acres of mineral leases and permit applications in Utah’s Paradox Basin. This includes two potash beds and an inferred resource of 279.5 MMT high-grade potash.
Sage Potash is a Canadian company which is currently vested solely in the Sage Plain property and intends through sustainable solution mining techniques to become a prominent domestic potash producer within the Paradox Basin situated in Utah.
The company is extremely well positioned to prospect for lucrative potash resources which will be in much closer proximity to America’s massive grain basket than, say, Canadian potash resources (currently widely used by American farms). At a time when US industry is becoming much for focused on domestic resources, we see Sage Potash as a very interesting venture play covering both US mining and agricultural sector dynamics.
Why are water rights so important for Sage Potash?
Water rights play a crucial role in the development of solution-based potash projects, as they ensure a sustainable supply of water for extraction purposes, which is essential for the efficient and environmentally-friendly extraction of potash.
Solution mining is a proven and well-known technique where potassium chloride(KCl), commonly referred to as potash, is dissolved by salt saturated brine injected into sylvinite layers to form caverns. The potassium-bearing solution is pumped to the surface for recrystallization and final processing.
Surface processing is initiated either by evaporation ponds or mechanical evaporation. Where water is plentiful, evaporation ponds may be ideal. In arid or semi-arid agricultural zones like Utah, mechanical evaporation may be preferable as this process requires far less water and can utilize brines which are not included in water rights but are included in existing mineral rights.
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In its commitment to aligning economic growth with environmental sustainability, Sage Potash has been at pains to point out that its planned operations will not impact traditional sources of irrigation, agricultural, or potable water. Instead the company will utilize brackish water, which is primarily composed of salt and other minerals, rendering it unsuitable for conventional uses.
Peter Hogendoorn, CEO of Sage Potash, explained further:
“In any resource project, one of the biggest risks to advancement beyond exploration, is permitting. Receiving water/brine access rights is a key step in de-risking the Sage Plain project since there can be no production without water. We are advancing numerous permit applications and are extremely pleased with the support we are receiving from the various Utah state agencies involved.”
