Western Potash Corp. Strikes Binding Off-Take Agreement with ADM

Western Resources Corp. recently reported that Western Potash Corp, its 100% owned subsidiary, has signed a binding off-take agreement with Archer Daniels Midland (ADM) company for 100% of the potash production (146,000 tons annually) from the Milestone Phase I plant.

ADM is an international leader in sourcing, processing, and transportation for agricultural needs. The company has constructed a vertically integrated worldwide franchise with the sourcing, production, and transportation capabilities to match the demands of customers around the world.

ADM will be exploiting both their transportation and sales proficiency to develop a direct sale channel for marketing in North America. The potash purchase via a local off-take agreement considerably decreases the company’s cost to convey potash from the Phase I project to market, as well as expanding ADM’s varied agricultural portfolio.

Important terms of the off-take agreement are as follows:

• Binding commitment to obtain 100% of the potash produced from the Phase I project
• Free-on-board (FOB) mine site and conveyance from the site by truck to the neighboring Port Lajord Terminal, located just 13 km from the project venue
• A structure to incentivize the ideal final sale price for both parties

Furthermore, the company is happy to provide the following recent updates relating to the Milestone Phase 1 Project.

Drilling Program

The team has fruitfully accomplished drilling of three vertical production wells, intersecting high-grade potash in all wells, according to the downhole logs. As part of the project, drilling and connection of first injection wells have been carried out, realizing on-target intersection of the potash bed. This is the first purposefully connected potash well drilled in Saskatchewan. It is a huge achievement in the progress of the horizontal selective solution mining method.

Construction

Construction is ongoing in line with the project schedule. Wide-ranging progress has been realized, including construction of building foundations, planning for building construction before year-end, and the arrival of equipment and materials. The goal of the project remains to fulfill Phase I construction by mid-2020 with potash production to start later next year.

Operations

The Western Potash water well began operation on August 30^th and started filling the crystallization pond. This water well uses brackish groundwater from about 850 m below the surface, which is not appropriate for either agricultural or potable use.

The pond will be slowly filled in the following three months. The cold mining to saturate the crystallization pond with salt will start by October 2019, followed by hot mining of potash in early 2020.

We are very pleased with the progress achieved on the Milestone Project to-date. The offtake agreement for the purchase of our Phase I Project potash with a reputable partner such as ADM gives us great confidence in the final sale of our potash.

Mr Fritz Venter, President and CEO, Western Potash Corp

Mr Fritz Venter added, “The recent successful construction, drilling and start of operations to fill the crystal pond proves the project is on track to start production by late 2020. We look forward to the continued safe, on-budget and schedule completion of the project.”