Intrepid Potash, Inc. (NYSE:IPI), announced today that the New Mexico Environmental Department (NMED) has issued a ground water discharge permit for Intrepid’s HB Solar Solution Mine near Carlsbad, New Mexico. Obtaining this state regulatory approval is a key milestone in Intrepid’s development of its HB Solar Solution Mine project.
Intrepid produces potash and langbeinite from its mines and production facilities in southeast New Mexico near Carlsbad, and is the largest producer of potash in the United States. Potash, or potassium, is one of several key fertilizer inputs used in agriculture and langbeinite is a specialty nutrient that contains potassium, sulfur and magnesium. Intrepid’s total productive capacity of approximately 910,000 tons of potash supplies approximately ten percent of the United States’ potash needs. With nearly eighty-five percent of all potash used in the United States imported, Intrepid is working diligently to expand its production to further support the United States’ agricultural industry and to continue to provide jobs for Intrepid’s nearly 700 New Mexico employees. Intrepid has invested hundreds of millions of dollars into its New Mexico operations in the last six years and has plans for significant additional capital investment in the coming years.
“With the receipt of the ground water discharge permit, the HB Solar Solution Mine project is one step closer to realization,” commented Bob Jornayvaz, Intrepid’s Executive Chairman of the Board. “The benefits that this project will bring to Intrepid and to the State of New Mexico are numerous. Through the development of the project, Intrepid will take an inactive potash mine and apply proven solution mining and solar evaporation technologies to recover the remaining potash deposits. Further, Intrepid expects the new tons produced at HB to lower per ton operating costs. The state of New Mexico and the Carlsbad community will benefit economically from the project though the additional royalty stream the mine will provide and through the addition of the permanent and construction jobs that a major capital project like HB requires. Intrepid is ready and financially able to fund one hundred percent of the HB project through its available capital resources the moment Intrepid receives all required permits and approvals.”
To develop and produce potash from the HB Solar Solution Mine, Intrepid intends to inject salt saturated brine into the previously mined underground works of its HB Mine to preferentially dissolve the remaining potash into a solution. The potassium rich brine will be pumped from the underground mine works into solar evaporation ponds where the potash will precipitate out of the solution and then be processed at a new flotation plant adjacent to Intrepid’s West plant in Carlsbad, New Mexico.
The project still needs federal regulatory approval from the Bureau of Land Management (BLM). In January 2009, the BLM informed Intrepid that an Environmental Impact Study (EIS) would be required to evaluate the project. The BLM has issued its scoping summary report for the EIS and is moving forward on preparation of the EIS on schedule. The EIS process and a decision on regulatory approval is anticipated, according to the BLM’s schedule, to be completed in the third or fourth quarter of 2011.
Construction of the HB project is expected to commence promptly after all regulatory approvals needed for the project have been obtained, with first production approximately twelve to eighteen months later, and full production anticipated approximately two years after construction begins. Intrepid expects to invest between $120 and $130 million to construct the HB Solar Solution Mine. Additionally, Intrepid anticipates that, when fully operational, the HB Solar Solution Mine will add between 150,000 to 200,000 tons of additional low-cost potash production to Intrepid’s annual production capacity from the 28 years of estimated reserve life of the HB Solar Solution Mine.
Intrepid is the largest producer of potash in the U.S. and is dedicated to the production and marketing of potash and TrioTM, a product produced from langbeinite ore. Intrepid owns five active potash production facilities -- three in New Mexico and two in Utah.
Intrepid routinely posts important information about its business on its website under the Investor Relations tab. The website address for Intrepid is http://www.intrepidpotash.com.
Certain statements in this press release, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, including statements regarding guidance, are forward-looking statements within the meaning of these laws. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that the expectations will be realized. These forward-looking statements are subject to a number of known and unknown risks and uncertainties, many of which are beyond our control that could cause actual results to differ materially and adversely from such statements. These risks and uncertainties include: changes in the price of potash or langbeinite; operational difficulties at our facilities; the ability to hire and retain qualified employees; changes in demand and/or supply for potash or langbeinite; changes in our reserve estimates; our ability to achieve the initiatives of our business strategy, including but not limited to the development of the HB Mine as a solution mine and the further development of our langbeinite recovery assets; changes in the prices of our raw materials, including but not limited to the price of natural gas and power; fluctuations in the costs of transporting our products to customers; changes in labor costs and availability of labor with mining expertise; the impact of federal, state or local government regulations, including but not limited to environmental and mining regulations, and the enforcement of such regulations; competition in the fertilizer industry; declines in U.S. or world agricultural production; declines in oil and gas drilling; changes in economic conditions; adverse weather events at our facilities; our ability to comply with covenants inherent in our current and future debt obligations to avoid defaulting under those agreements; disruptions in credit markets; governmental policy changes that may adversely affect our business and the risk factors detailed in our filings with the U.S. Securities and Exchange Commission. Please refer to those filings for more information on these risk factors. These forward-looking statements speak only as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as the result of future events, new information or otherwise.
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