Construction on unique, new potash mine to start in spring

A new mine in Saskatchewan will change the way potash is produced and sold.

The Saskatoon-based Gensource Potash Corporation plans to build a mine between Eyebrow and Tugaske, about one hour northwest of Moose Jaw. The Vanguard One project is currently in the financing phase and if everything goes as planned, construction is expected to begin this spring.

Construction will create about 150 jobs and should last approximately 1.5 years, with an expected completion date of late 2020. Once operational, the mine would create 45 to 48 full-time jobs with production starting in early 2021.

Gensource president and CEO Mike Ferguson explained the mine is a unique project in terms of how it both produces and sells potash.

The project uses a process called selective solution mining, separating the potash from the salt. Unlike other potash mines, Ferguson said the project would not leave behind large tailing piles of non-usable byproduct. This process will save in capital costs and operational expenses.

Ferguson touts the mine’s environmentally friendly benefits.

“It allows this operation to be much more efficient and that allows us, in turn, to scale it down to a very small size that fits the specific market,” he said.

Ferguson believes the mine will start to change the structure of the potash industry, taking a radically different view on entering the market and how it provides potash to the marketplace.

He explained start-up costs can be in the billions of dollars for potash mines, which generally begin by producing two million metric tonnes per year and increasing from there. The Vanguard One project will operate on a smaller scale, starting with 250,000 metric tonnes per year, spending about $300,000 to enter the market.

“We don’t want to just create more product and throw it on the open market. Our strategy is to create product that is destined for a specific market,” said Ferguson.

The company has signed an off-take agreement with a U.S.-based diversified agricultural company for the sale of 100 per cent of its product over the next decade. The product is destined for the Western Canadian and U.S. midwest markets and is expected to arrive by the 2021 crop year.