Western Potash Corp executes Binding Offtake Agreement With ADM

by Keith Powell
Milestone Project Site

Milestone Project site in Saskatchewan. — Photo courtesy Western Resources Corp.

Western Resources Corp. (“Western” or “the Company”) is very pleased to announce that Western Potash Corp, the company’s wholly-owned subsidiary, has entered into a binding offtake agreement with Archer Daniels Midland Company (NSYE: ADM) (“ADM”) for 100% of the potash production (146,000 tonnes per annum) from the Milestone Phase I plant.

ADM is a world leader in agricultural sourcing, processing and transportation, and has built a vertically integrated global franchise with the sourcing, production and transportation capabilities to meet the needs of customers on six continents. ADM will be utilizing both their transportation and sales expertise to create a direct sale channel to market in North America. The purchase of potash through a local off-take agreement substantially reduces the Company’s cost to transport potash from the Phase I project to market, as well as expanding ADM’s diverse agricultural portfolio.

Key terms of the offtake agreement include:

  • Binding commitment to take 100% of the produced potash from the Phase I project;
  • Free-on-board (FOB) mine site and transported from the site by truck to the nearby Port Lajord Terminal, only 13 kilometers from the project site;
  • A structure to incentivize the best final sale price for both parties

In addition, the Company is pleased to provide the following updates of the Milestone Phase 1 Project:

Drilling Program:

The team has successfully completed drilling of three vertical production wells which intersected high grade potash in all wells, according to the downhole logs. The project has also drilled and connected first injection wells, having achieved on target intersection of the potash bed. This is the first intentionally connected potash well drilled in Saskatchewan, and is a major achievement in the development of the horizontal selective solution mining technique.


Construction continues to advance in line with the project schedule. Extensive progress has been achieved including construction of building foundations, arrival of equipment and materials, and planning for building construction before the end of the year. The project goal remains to complete Phase I construction in mid 2020 with potash production to commence later next year.


Operation of the Western Potash water well commenced on August 30th and began filling the crystallization pond. This water well utilizes brackish ground water from approximately 850m below the surface, which is not suitable for either potable or agricultural use. The pond will be gradually filled over the next three months. The cold mining to saturate the crystallization pond with salt will commence by October 2019, followed by hot mining of potash in early 2020.

Mr. Fritz Venter, President and CEO of Western Potash Corp., commented:

“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. 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.”

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