|Intrepid Potash Inc: Announces the Achievement of an Important Milestone in the Development of the HB Solar Solution Mine and Provides an Update on Other Major Capital Projects|
DENVER; December 3, 2012 - Intrepid Potash Inc. (Intrepid) (NYSE:IPI) today announced that on November 21, 2012, it began successfully pumping potash-enriched brine from its HB Solar Solution mine into the first of its newly constructed solar evaporation ponds, marking the achievement of an important milestone in the development of this project, which is located near Carlsbad, New Mexico.
"This is a monumental event for Intrepid," said Bob Jornayvaz, Intrepid's Executive Chairman of the Board. "This accomplishment demonstrates the persistence, professionalism, and talent of our dedicated team of employees and contractors who have brought this project to life. We have a tremendous sense of pride in this project, which takes a non-potable water source and injects it into an idled potash mine to recover a resource that otherwise would remain undeveloped. We then deposit the potash-enriched brine into lined ponds where we will use the sun's energy to precipitate out potash for use by our nation's farmers. The HB Solar Solution mine project is a key component of our plan to grow our production with incrementally lower cash cost tons."
The HB Solar Solution mine is a $200 to $230 million project and, when operating at full capacity, is expected to produce between 150,000 and 200,000 tons of potash per year. Construction of the project has progressed well with the pipeline construction complete and injection, extraction and water well development nearing completion by year-end. We have also made substantial progress on the construction of the evaporation ponds, and work is underway on the new processing mill. Through October 31, 2012, we had invested approximately $110 million associated with the project. We expect to commence mill commissioning, and see the associated first production, in mid-to-late fourth quarter of 2013.
Our North compaction project is also progressing on schedule. This new granulation plant will upgrade and expand our existing North facility and is designed and timed to accommodate production from both our West facility and production from the HB Solar Solution mine project. The budgeted capital investment for this project is $95 to $100 million, of which approximately $39 million had been invested through October 31, 2012. We have erected significant portions of the steel structure, placed much of the compaction and storage equipment, and completed the initial critical infrastructure work. We expect to bring this project on line in phases beginning in the middle of 2013.
Under our Moab cavern-development project, we have drilled three additional horizontal wells comprised of 14 separate laterals and created a completely new cavern system. The success of this technologically challenging project is testament to our talented team of engineers and consultants. We had invested approximately $18 million in this project through October 31, 2012, and we are already beginning to see positive returns from the project.
We are pleased with our progress on these major capital investments, having progressed through the initial, more uncertain phases of the work. Our overall 2012 capital investment program remains on track with approximately $196 million of investment deployed through October 31, 2012, all the while maintaining a healthy balance sheet. As of October 31, 2012, we had cash and investments of approximately $142 million, with availability of $250 million under our revolving credit facility, and the funding of our $150 million senior notes is scheduled for April 2013.
As the largest producer of potash in the U.S., Intrepid is dedicated to the production and marketing of potash and Trio®, a product produced from langbeinite ore. Intrepid owns five active potash production facilities - three in New Mexico and two in Utah. The HB Solar Solution mine, which is currently under construction, will increase the number of our active potash production facilities to six.
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This document contains forward-looking statements - that is, statements about future, not past, events. The forward-looking statements in this document often relate to our future performance and management's expectations for the future, including statements about our financial outlook. These statements are based on assumptions that we believe are reasonable. Forward-looking statements by their nature address matters that are uncertain. For us, the particular uncertainties that could cause our actual results to be materially different from our forward-looking statements include the following:
All information in this document speaks as of December 3, 2012. New information or events after that date may cause our forward-looking statements in this document to change. We have no duty to update or revise publicly any forward-looking statements to conform the statements to actual results or to reflect new information or future events.
Contact: Intrepid Potash Inc.
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