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Talitsky License Area: Best Reserves with Fewer Complications

JSC Acron bid on and won the Talitsky area at the Verkhnekamsk potassium-magnesium salts deposit because the company’s pre-auction research indicated it was the most promising of the auction’s lots.

Director General of Verknekamsk Potash Company, LLC (VPC) Vladimir Zakharov described the advantages of the Talitsky lot:

“Experts at Acron and Verknekamsk Potash Company collected and thoroughly analysed geological, technical and processing information on various areas at the Verkhnekamsk deposit. We studied the methods of salt mining and processing, as well as the practical experience and technical and economic performance indicators of existing potassium and magnium salts producers in Russia and abroad.

“Our comprehensive analysis showed that the Talitsky lot was the best fit for Acron based on a number of factors, including location, infrastructure availability, levels of potassium chloride as the key commercial component, the productive layers’ capacity, the mineralogical and petrographic composition of the ore, mineral extraction and complexity and the capital investments to potential facility lifetime ratio.

“Talitsky has smaller commercial reserves and a higher content of sylvinite than other lots sold at the auction. The average depth of the productive layers at Talitsky (278.5 m) is considerably shallower than that at the Polovodovsky area (286 m) and Balakhontsevsky area (388 m). These factors, together with the moderate size of the license area, will make the project less investment-intensive and reduce the production cost of the mined ore.

“As there are no commercial reserves of carnallite at Talitsky, we won’t have to invest in mining it. There are also no significant reserves of hydrocarbon at Talitsky that are licensed to oil producers. That is a plus, because the presence of licensed hydrocarbon areas eventually leads to a considerable loss of potassium raw materials due to lower extraction and requires additional negotiations with the license holders.

“Unlike the Palashersky and Balakhontsevsky areas, there are no specially protected natural reservations or archaeological sites at Talitsky, which would impede mining and construction operations and result in higher production costs. Another disadvantage of the Palashersky and Balakhontsevsky areas is their adjacency to a flooded mine run by the 3rd Berezniki Potassium Mine Department of JSC UralKali, situated in the centre of Balakhontsevsky. This can affect the mining process and reduce ore extraction, threatening with water breakthrough in new mines under construction.”

Comparative Analysis of Verkhnekamsk Salt Deposit Areas

No. Indices Talitsky area Polovodovsky area Palashersky and Balakhontsevsky areas
1. А+В+С1 reserves, ‘000 t      
  Sylvinite 681,545 3,073,531 1,524,293
  Carnallite     574,863
2. Content, %      
  KCl (potassium chlorite) 35 27.2 32
  К2О 22.1 17.2 20
3. Lot area, m2 69.56 381.01 132.84
4. Main productive layer depth, m 173 - 384 92 - 480 311 - 465
  Average depth, m 278.5 286 388
5. Aggregate average capacity of productive layers containing reserves, m 9.26 11.05 18.2
  Including sylvinite layer, m 9.26 11.05 12.8
6. Sylvinite reserves per m3 of productive layer rock, t 1.1 0.9 0.7
7. Subsoil licence to explore and mine hydrocarbon no yes yes
8. Specially protected natural reservations no no yes
9. Water source sanitary control zone no yes no
10. Protected archaeological sites no no yes

Source: “Auction Procedure and Terms” – information on lots for sale.