Saskatoon, Saskatchewan - Buffalo Potash Corporation (TSXV: BUFF) (OTCQB: BLPTF) (the 'Company' or 'Buffalo') is pleased to announce the completion of a Preliminary Economic Assessment ('PEA') and concurrent release of its maiden 43-101 Mineral Resource Estimate for its 100%-owned Disley Potash Project (the 'Disley Project'), located in Saskatchewan, Canada.
PEA & Mineral Resource Estimate Highlights
Total production of 1,000,000 tonnes per annum (TPA) of K62 granular-grade Muriate of Potash (MOP) and 125,000 TPA of K62 soluble grade MOP
After-tax NPV(1)(8) of US$1.1B and IRR(1) of 30%
US$639M initial CAPEX estimate, including US$128M in contingency
Estimated US$55/t MOP OPEX
Measured and indicated tonnage of 1,671.5 million metric tonnes at an average grade of 34.8% KCl, yielding 582 million tonnes of KCl
Over 50 years of mine life at 1,125,000 TPA based on current resource estimate
The advancement of a Feasibility Study ('FS') for Disley East and Disley West (the 'HLD Mines') will run concurrent with Initial Production Module ('IPM') construction, with FS completion representing the key decision gate for proceeding to construction of Disley East and Disley West(3)
Mr. Steve Halabura P.Geo., Buffalo Chief Executive Officer, commented: 'Since founding Buffalo Potash in 2018, the team and I have invested years of disciplined work - geological, technical, and strategic - to systematically unlock the potential of modular selective solution potash mining in Saskatchewan, the key being Buffalo's Disley Project. Having spent my career working in Saskatchewan potash, I had a strong conviction from the beginning that Disley had a substantial resource endowment, and this Mineral Resource Estimate confirms exactly that. The PEA illustrates both low capex per tonne and operating cost per tonne, as well as setting a new environmental standard for how potash production should look in the 21st century - no tailings stored on surface and minimal freshwater usage.'
Mr. Halabura continued: 'The team and I believe the Disley Project represents the next generation of Saskatchewan potash solution mining and are excited to begin development of the Initial Production Module, which will be the first leg of this buildout and is expected to bring soluble-grade potash production online within the next 12 months. During the development of the Initial Production Module, we will also test our patent-pending Vortex Crystallizer, alongside an industry standard crystallizer, which has the potential to significantly reduce the capex of the Initial Production Module and further potential build-outs. With global attention turning to the security of critical supply chains, the urgency to bring reliable, jurisdiction-stable potash production online has never been greater. This is a proud moment for our team, our shareholders, and the stakeholders that have supported us along the way - and we are just getting started.'
Mining Method
Buffalo intends to develop the Project using solution mining, a well-established approach that has been successfully deployed across Saskatchewan for more than 50 years. Solution mining is widely recognized as a reliable and efficient technique for extracting potash from laterally continuous deposits, notably used at both neighboring properties of the Disley Project - the K+S Bethune mine and the Mosaic Belle Plaine mine.
Building on this proven foundation, Buffalo holds a patent on an enhanced solution mining approach known as Horizontal-Line-Drive Selective Solution Mining ('HLD Mining'), which is the installation of commercially proven oil and gas injection systems within horizontal wells. This method is designed to optimize efficiency, reduce overall capital intensity, and significantly limit freshwater requirements, while remaining grounded in the principles of traditional solution mining.
Following underground dissolution, potash-rich brine is recovered to surface and processed through crystallization, drying, and compaction to produce a finished potash product ready for local delivery or export via existing road and rail infrastructure that currently runs adjacent to the Disley Property.
Initial Capital Expenditure (CAPEX)
The initial capital cost estimate has been prepared in line with the Class 4 definition outlined by AACE International standards, with a contingency of 25% applied to the IPM, Disley East, and Disley West components.
Mechanical equipment represents the largest component of initial capital expenditure at approximately 38% of Total Project initial CAPEX. For Disley East and Disley West, the mechanical scope encompasses the full processing train required to produce export-grade granular MOP, including crystallization, debrining and drying, compaction and glazing, soluble product screening, and product storage and loading. For the IPM, the mechanical scope includes a crystallizer, pumps, tanks, pipework, centrifuge, dryer, and baghouse.
Contact:
Steve Halabura
P.Geo. | Chief Executive Officer & Director
Email: steve@buffalopotash.ca
Tel: 1-306-220-7715
Net Present Value ('NPV') and internal rate of return ('IRR') are forward-looking financial measures used by management to evaluate the economic potential of the Disley Project, as estimated in the PEA. These measures do not have standardized definitions under IFRS and may not be comparable to similar measures disclosed by other issuers.
NPV represents the sum of discounted future after-tax cash flows projected over the 25-year evaluation period at a discount rate of 8%, net of initial and sustaining capital expenditures. The most comparable IFRS measure is net income (loss); however, NPV is a forward-looking measure that reflects projected future cash flows and cannot be directly reconciled to historical net income. IRR represents the discount rate at which NPV equals zero across the project's projected cash flows.
These measures should not be construed as alternatives to net income, comprehensive income, or cash flows from operations as determined in accordance with IFRS. Readers are cautioned that these measures reflect PEA-level estimates and are subject to the risks and uncertainties disclosed under 'Forward-Looking Information' below.
Forward-Looking Information
This news release contains 'forward-looking information' and 'forward-looking statements' (collectively, 'forward-looking information') within the meaning of applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is generally identifiable by the use of words such as 'believes,' 'may,' 'plans,' 'will,' 'anticipates,' 'intends,' 'could,' 'estimates,' 'expects,' 'forecasts,' 'projects,' 'targets,' 'schedules,' or similar expressions, and the negative of such expressions.
Forward-looking information in this news release includes, but is not limited to, statements regarding: the results, assumptions, and projections contained in or derived from the PEA and Mineral Resource Estimate for the Disley Project, including projected production rates, capital and operating costs, NPV, IRR, payback periods, and mine life; the anticipated timing and phasing of construction and commercial production for the IPM, Disley East, and Disley West; the Company's ability to secure permitting, financing, and all necessary regulatory approvals; the anticipated cost and technical performance of the HLD Mining method; expectations regarding MOP and soluble grade potash pricing, transportation costs, and market access and the Company's broader development plans and strategy for the Disley Project.
Forward-looking information is based on management's reasonable assumptions, estimates, analysis, and opinions made in light of its experience and perception of historical trends, current conditions, and expected future developments, as well as other factors that management believes are relevant and reasonable in the circumstances as of the date such statements are made. Key assumptions underlying the forward-looking information include, but are not limited to: the accuracy of the Mineral Resource Estimate and PEA, including geological, engineering, and cost assumptions; no material adverse changes to commodity prices, exchange rates, or tax and royalty regimes; the availability of financing on acceptable terms; the Company's ability to obtain necessary permits and approvals on anticipated timelines and the continued availability of equipment, personnel, and infrastructure.
Forward-looking information is subject to known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to differ materially from those expressed or implied, including: the inherent uncertainty of PEA-level studies and the possibility that actual capital costs, operating costs, and production rates differ materially from estimates; changes in potash or fertilizer market prices; fluctuations in currency exchange rates, particularly the Canadian dollar relative to the US dollar; the risk that permitting, financing, or regulatory approvals are not obtained on anticipated timelines or at all; risks related to the development, commissioning, and operation of novel mining technology; risks inherent to solution mining operations and general business, economic, competitive, political, and social risks and uncertainties.
A PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. The forward-looking information contained herein is made as of the date of this news release, and the Company disclaims any obligation to update or revise such information except as required by applicable securities laws.
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