Western Potash Corp. Delivers Robust Prefeasibility Study at Milestone2 hours ago by Business Wire

WESTERN POTASH CORP., (the "Company") (TSX: WPX) is pleased to announce the receipt of an independent positive Prefeasibility Study (the "Study") from AMEC Americas Limited ("AMEC") on its 100% owned Milestone property in southern Saskatchewan (the "Milestone Project"). AMEC is a leading international engineering and project management company that currently manages multiple potash expansion projects in Saskatchewan with a capital value of several billion dollars. AMEC was chosen to carry out the Study because of their technical expertise as engineers and EPCM contractors, as well as their experience in potash mine construction, potash processing and their expertise in producing potash feasibility studies.

This Study confirms that the Milestone Project shows significant positive economics and that the asset is of sufficient size and grade to support primary and secondary solution mining for more than forty years at a production rate of 2.8Mt/yr. The Milestone Project hosts a potash resource which consists of 64 million tonnes of Measured Resource (contained KCl), 180 million tonnes of Indicated Resource, and 701 million tonnes of Inferred Resource. The Study was based on, and supported by, the NI43-101 Technical Report "Updated Technical Report Concerning Mineral Resource Estimates Subsurface Mineral Lease KLSA 008 Saskatchewan", dated June 8, 2011 and filed on SEDAR on June 10, 2011 (the "Report").(1)

An assessment of project economics was also included in the Study. Assuming a discount rate of 10%, the resulting project Net Present Value is $4.14B CAD, while the Internal Rate of Return is 22.7 %. The economics were modeled using pricing based on a CRU market report. This report provided average yearly potash price estimates for the period from 2015 through 2025. The average for those years, equating to $US 511/t, was used for the 2025 to 2055 period. The economic model assumes a flat US$ exchange rate, CAPEX based on 100% equity, and tax and royalties calculated using a flat rate of $28.90/t CAD. A complete list of the assumptions used in this model can be found in Table 1. Since the analysis is based on a cash flow estimate, it could be expected that actual financial results may vary from these predictions.

Table 1: Model Assumptions

Target Annual Production rate       2.8 Mt/yr
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Life of Mine                        40 years
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Years of Construction               3
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Construction Start-up               2013
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Mining Start-up                     2016
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Years to Full Secondary Production  6
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Long Term Potash Price (FOB Gate)   $511/tonne USD
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Assumed Exchange Rate               US$/CAD$ 1.00
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Taxes and Royalties                 $28.90/tonne CAD
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Sustaining CAPEX Rate %             2.0%
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Base Case                           100% Equity
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OPEX                                $62.35 tonne CAD
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Initial CAPEX                       $2.458 Billion CAD
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Port CAPEX                          $300 Million CAD
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Total Initial CAPEX                 $2.758 Billion CAD
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NPV (10)                            $4.14 Billion CAD
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IRR                                 22.7%
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Payback Period                      5 Years
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The Study includes all facilities required to operate a potash solution mine, including a cavern and well field layout, a two-train multiple effect evaporization-crystallization plant, a dry processing plant, product storage, load out and all other necessary site infrastructure. This design was detailed to a sufficient level to allow the capital cost estimate to be upgraded to AACE "Class 4" standard. The annual production rate can be expanded to a higher annual production rate, achievable through a higher level of capital expenditure.

This Study was intended to provide a high degree of project definition, building on the Scoping Study completed in 2010. The Prefeasibility Study commenced with the completion of tradeoff studies where important design options were investigated. Ultimately a single plant design was identified, which was carried through the Study. Agapito Associates, Inc. was contracted by the Company to complete the Solution Mining Design for the Study, which included a solution mining plan and schedule, well field design, cavern layout and recovery modeling, and subsidence analysis. AAI's experience includes work for Intrepid Potash Inc. in the US, Rio Tinto and Vale at the PRC project in Argentina, and work for several prospective potash projects located in Saskatchewan.

Capital and operating cost estimates were generated with a target accuracy of ±20%, typical for this level of Study. The initial CAPEX estimate for the plant is $2.758B CAD, including allowances for port infrastructure, water supply pipeline, and off site railway. An allowance of $300M CAD has been included for port infrastructure which was excluded from the Company's Scoping Study completed in 2010. Removing this allowance for port from the current Study results in an approximate 2% reduction in initial CAPEX when compared to the Company's Scoping Study. Construction is assumed to take place over a three year period, with production beginning in project year three. Full primary and secondary production will be achieved over a six year ramp up period.

The Project unit operating costs were estimated to be $62.35/tonne CAD at full production capacity. These operating costs include estimates for labour, maintenance, power, natural gas, water, consumables, diesel, and uncapitalized well field operations. Operating costs do not include taxes, royalties, or the costs associated with transportation to port and ship loading. Sustaining capital has been projected to remain flat at 0.5% of replacement cost for the first 10 years of operations. Sustaining capital ramps up from 0.5% to 2.0% of replacement cost between years 14 and 23 of the Project.

The Study resulted in significant advancement of the level of definition of the project. The Milestone Project remains economically very strong with no known limitations that may prevent a successful and profitable project outcome. The Study recommends immediate commencement of a Feasibility Study which will adhere to the AACE "Class 3" classification for projects.

Patricio Varas, CEO and President comments: "The PFS confirms the compelling opportunity that the Milestone project represents for the Company and the Province of Saskatchewan to develop a world class potash mining operation. In addition to the 40 year scope of mining contemplated in the PFS, the known resource is sufficient to support ongoing mining for an additional 40 years and beyond. We are pleased with the on time and on budget delivery as well as the thorough analysis of the available options considered for project optimization. The coordinated efforts of the internal and external teams are to be complimented for their work in delivering a comprehensive report, a critical step as the Company continues the process of de-risking the Milestone asset. "

The Company will file an updated NI 43-101 Technical Report with Canadian securities regulators within 45 days of this release and will be available on SEDAR at www.sedar.com, and also on the Company's website at www.westernpotash.com. This Technical Report will include an updated Mineral Resource and Reserves Statement.

About Western Potash

Western Potash Corp. is a potash company focused on the development its 100% owned Milestone Saskatchewan solution mining project, located 30 km southeast of Regina. The Company intends to develop this world-class potash deposit in an ecologically sustainable, economically efficient and socially responsible manner.

The in-house qualified persons for the purposes of NI 43-101 guidelines are J. Patricio Varas, P. Geo and Dean Pekeski, P. Geo, both of whom have reviewed and approved the contents of this news release.

For more information on Western Potash Corp.'s projects, please visit the Company's website at: www.westernpotash.com

(1) The Report was prepared by Agapito Associates Inc. and reported via news release dated June 21, 2011. The Qualified persons for the Report were Dr. Michael P. Hardy, P.E, P.Eng., P.G., Dr. Douglas F. Hambley, P.E., P.Eng., P.G. and Dean Pekeski, P.Geo. The Company cautions that mineral resources that are not mineral reserves do not have demonstrated economic viability.

ON BEHALF OF THE BOARD OF DIRECTORS

"J. Patricio Varas"

President and CEO