The purpose of the revision is to potentially increase sulfate of potash (SOP) production and EBITDA.
The revision work will focus on phases 1B, 2 and 3 to ensure that detailed engineering work completed to date and current project timelines will not be affected.
SOP could be a high-margin by-product for Fort Cady
The board expects capital expenditure estimates for Phases 1B, 2 and 3 will increase and that operational expenditure estimates will decrease with fixed costs spread over larger production.
The board also expects these increases to be offset by additional EBITDA commensurate with high-margin by-product production of SOP.
Benefits of producing SOP at Fort Cady
While the revised DFS will be required to understand whether producing SOP as a by-product can add long-term project value, the company notes some strong supporting factors.
The US is a net importer of SOP and the only domestic producer is considered high-cost.
Fort Cady could potentially be a viable alternative to available market sources as the US west coast is a major consumer of SOP.
The outlook for SOP in the US is also solid with growth rates for demand being stronger than US GDP.