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Western Potash Receives Subsurface Mineral Lease for Milestone Property

WESTERN POTASH CORP., (TSX Venture: WPX) has announced that the Province of Saskatchewan has granted the Company a subsurface mineral lease on its 100% owned Milestone property in southern Saskatchewan.

The lease was granted by Special Agreement under Section 4(b) of The Crown Minerals Act, and contains more than 87, 500 acres of Crown held mineral leases. The renewable, twenty one year lease was granted by Ministerial order and provides the Company with the full and exclusive power and right to mine Crown owned subsurface minerals, including potash, contained within the lease area, subject to the provisions outlined by The Saskatchewan Subsurface Mineral Regulations, 1960. The granting of this lease is one of the key steps towards the development of the Milestone Potash Project.

“NI 43-101 Technical KP 408 and KP 409, Saskatchewan”

The Company has announced that further to its news release dated September 20, 2010, it has filed today with the Canadian securities regulators, a summary (the "Summary") of the work and results of the Milestone Potash Project Scoping Study (the "Study") dated September 2010. The Study was prepared exclusively for Western Potash by AMEC Americas Limited ("AMEC"). The Study was based on, and supported by the, "NI 43-101 Technical KP 408 and KP 409, Saskatchewan", dated July 12, 2010, and filed on SEDAR on July 16, 2010 (the "Report") prepared by Agapito Associates Inc. and was reported in the Company's news release dated June 3, 2010. The Summary was compiled by Western Potash Corp., and will be available on SEDAR at www.sedar.com on November 2, 2010 and also on the Company's website at www.westernpotash.com.

This Study confirmed that the Milestone resource shows significant positive economics and that the asset is of sufficient size and grade to support solution mining for more than forty years at a production rate of 2.5Mt/yr.

Highlights of the Study include:

  • High formation temperatures at Milestone (60 to 650C) reduce operating costs by 8.5% when compared with other solution mining projects in Saskatchewan that access lower (50 to 550C) formation temperatures.
  • Long Term Potash Gate Price: The CRU Group provided yearly potash price estimates for the 2015 to 2025 period. The resulting average price of $US 511/t was then assumed for the 2025 to 2055 period.
  • Other assumptions: Assumes a flat US$ exchange rate. Construction is assumed to take place over a two year period, production beginning in project year three. CAPEX based on 100% equity. Tax and royalties were calculated using a flat rate of CAD$28.90/t.
  • Since the analysis is based on a cash flow estimate, it should be expected that actual financial results may vary from these predictions. An accuracy assessment of the cost estimates was completed as part of this study and is estimated to be ±35%.

The Study recommends immediate commencement of a Pre-Feasibility study based on the attractive economic assessment presented.

The 100% owned Milestone property, comprising 500 square kilometers, is located 30 kilometers southeast of Regina, and southeast of Mosaic's Belle Plaine Mine, one of the largest producing potash solution mines in the world.

The in-house qualified persons for the purposes of NI 43-101 guidelines are J. Patricio Varas, P. Geo and Dean Pekeski, P. Geo, both of whom have reviewed and approved the contents of this news release.

Source: WESTERN POTASH CORP.

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