Atlantic Potash Millstream Corporation (APMC) is a Canadian exploration and development company developing the 100 per cent owned Millstream Potash Deposit in Canada, which is the largest potash producing country in the world.
The Millstream Potash Deposit is in a resource rich area with a positive business climate. It is a high-grade project with strong economics in a favourable location. Situated in southern New Brunswick, it is 70km by rail to the port of St John and includes a mineral lease covering over 100 km2 in a region with significant historical potash production.
APMC has completed three independent appraisals which concluded that the Millstream Potash Deposit has the potential to be one of the world’s lowest cost producing potash mines with a total cash OPEX of less than $80 per tonne vs its competitors which are in excess of $120 per tonne.
Critical supplies
Potash is one of the main ingredients needed for an effective fertilizer used in crops around the world. It improves plant strength, water retention and helps to combat harmful plant disease. Importantly, there is no natural substitute for potash, so a continuous and large supply to global crops is critical. Fertecon, the industry specialist, forecasts average growth of 1.6 per cent a year in Canada through to 2030.
Barrie Bain, non-executive director of APMC and current coordinator with the United Nations and International Fertiliser Association, said: “Major agricultural countries like the United States, China, India and Brazil all recognise that to increase crop production potash use must be increased. In Africa, fertilizer use, including potash use is well below recommended levels. Thus, potash demand is expected to see strong growth going forward to meet the nutritional needs of a growing population. Dietary changes, with higher meat consumption in developing countries and increased consumption of fruit and vegetables, are also drivers for increased potash use.
Mr Bain expects the current oversupply in the potash market to be eroded by strong growth and rationalisation of higher cost production capacity. This is expected to result in stronger pricing, from the mid-2020s when the Millstream project comes on-stream.
“Millstream is well positioned to take advantage of this strong demand growth,” said Mr Bain. “Its location in Eastern Canada, close to the deep sea port of St John, gives it a significant cost advantage over most other potash producers. Transportation from Millstream to St John is $45 lower than from Saskatchewan to Vancouver. Millstream’s cost of producing and transporting potash for export will be one of the lowest in the world. Millstream also has an ocean freight advantage over other producers to key growth markets like Brazil and Africa.”
Positive appraisals
In the 1980s Millstream was owned by BP, which completed eight 2d seismic surveys and drilled 12 holes with core samples, enabling them to build significant geological interpretation of the project. The natural resources world then changed and BP realigned its business focus back to pure oil and gas.
Since acquiring the project in 2013, APMC has shot 3D seismic with interpretation of 3D Vulcan modelling, and drilling indicates the deposit extends further than originally estimated.
Three independent appraisals (including a NI 43-101 Resource Estimation Report, and Economic Appraisal completed by Ercosplan in 2016 and by Mineral Resources Worldwide in 2017) have confirmed the strong fundamentals of the project, underpinning its low-cost nature and the potential to be one of the world’s lowest cost producing potash mines.
People are key
The board and key management have broad experience across the potash industry, local government and business.
Guocai Liu, chaiman, is a key player in the Chinese fertilizer industry and CEO of Migao Corporation, which has global expansion interests. Keith Attoe, chief executive officer, has a proven track record in the areas of project management, working with Deloitte for many years.
The board also boasts Barrie Bain, a founder and former Director of Fertecon and head of its potash group, and the current coordinator with the UN for the International Fertilizer Association which promotes the efficient and responsible production, distribution and use of plant nutrients. In addition, Daryl Wilson was former Auditor General of New Brunswick, while Philip Reeves was formerly
chief operating officer of the Saskatchewan Mining Association. Keith Crosby was the Senior Geologist for BP on the project in the 1980s.
What next?
There are three clear development phases, the first of which will be to complete the next drilling programme in order to update the NI 43-101. This will enable the completion of a Bankable Feasibility Study, followed by the project finance and offtake agreements, before the project heads into production.
Contact Keith Attoe, CEO
+1 (416) 303-7148
keith.attoe@apmcpotash.com
