Saskatchewan Achieves New Records in Potash Production, Sales in 2021

The potash sector in Saskatchewan hit record highs in 2021, with production reaching 14.2 million tonnes K2O and the value of sales hitting $7.6 billion.

“Over the past 15 years, the Saskatchewan potash sector has committed more than $30 billion of investment in mine expansions and new projects.” said Bronwyn Eyre, Energy and Resources Minister. “It [the potash sector] directly employs some 6,000 people and contributes to the livelihoods of thousands more. Saskatchewan continues to lead the world in the production of potash, which emits 50% fewer emissions and is more sustainably produced here than in any jurisdiction in the world.”

On March 23, 2022, the Government of Saskatchewan issued a press release detailing how the 2022–23 Budget reinforces the importance of the natural resource sector as a key contributor to Saskatchewan's economy and a global provider of responsibly produced and regulated oil and gas, mining, and forestry products.

“With demand increasing and supply being reduced due to global unrest, this should be a strong year for Saskatchewan's resource sector and the jobs it creates," Eyre said. "Saskatchewan will continue to be a stable, reliable source of sustainable oil, potash, uranium, forestry products and many other natural resources that the world needs."

According to the government press release, Saskatchewan's Growth Plan includes the objective to increase the annual value of potash sales to $9 billion. The Government of Saskatchewan believes they will achieve this objective well before 2030.

As the sole producer in Canada, the Saskatchewan potash sector typically accounts for about 30% of world production, which comes from 10 mines operated in the province by K+S Potash Canada, The Mosaic Company, and Nutrien Ltd.

Nutrien Increasing Potash Production Due to Uncertainty in Eastern Europe

Nutrien Ltd. is planning to increase potash production capability to approximately 15 million tonnes in 2022, in response to the uncertainty of potash supply from Eastern Europe. This is an increase of nearly one million tonnes compared to previous expectations. Most additional volume is expected to be produced in the second half of the year.

“Our thoughts and sympathies are with those impacted by the crisis in Ukraine and we hope for an immediate de-escalation of this conflict,” said Ken Seitz, Nutrien’s interim President and CEO. “The impacts of this conflict extend beyond Eastern Europe as a disruption in supply of key agriculture, fertilizer and energy commodities could have implications for global food security.”

According to a company news release from mid-March, Nutrien’s 2022 potash production is expected to increase by nearly 20% compared to 2020 and account for more than 70% of global production added over this period. The company expects a small increase in its 2022 capital expenditures and will be hiring additional employees across its network of low-cost potash mines.

“Nutrien is responding to this period of unprecedented market uncertainty by safely expanding potash production to help provide our customers with the crop inputs they need,” said Seitz. “We continue to closely monitor market conditions and will evolve our long-term plans to ensure we utilize our assets in a safe and sustainable manner that benefits all our stakeholders.”

Nutrien is the world’s largest provider of crop inputs and services, playing a critical role in helping growers increase food production in a sustainable manner. The company produces and distributes approximately 27 million tonnes of potash, nitrogen, and phosphate products worldwide.

Western Potash Corp. Secures $85k Financing

Western Potash Corp. announced in late April that it secured an $85k loan with Appian Capital Advisory LLP. Proceeds of the loan will enable Western Potash to continue and complete the remaining construction and development of the Milestone Phase I project (located approximately 30 km southeast of Regina), pay out existing creditors, and for general and administrative expenses of the project.

The loan transaction includes:

• A six-year term loan facility of up to US equivalent of C$85k at an interest rate of 12.5% per annum.

• The grant of a 1.5% royalty based on the gross revenue of the project to Appian.

• The issuance to Appian by the Company of 20,774,030 warrants as part of the consideration for the facility, which will allow Appian, after exercise, to acquire up to 20,774,030 common shares of company; this currently represents 11.1% of the company’s issued and outstanding common shares, and will represent up to 9.9% of the company’s issued and outstanding common shares on a post-transaction basis.

The aforementioned warrants can be exercised in cash or without cash consideration and the exercise price of the warrants is $0.2834, representing a 25% discount to the five-day volume-weighted average price (VWAP) on April 28, 2022, the execution date of the facility agreement. The term of the warrants expires six years from the closing of the loan transaction. If the company share price reaches at least $0.50/share above exercise price for five consecutive trading days, Appian will be required to exercise the warrants within five business days.

“I am proud of the breakthrough that the Western team has made in signing the loan transaction with Appian,” said Bill Xue, Chairman and CEO of Western Resources Corp. “This funding, together with the C$80 million equity investment, will provide a huge capital injection for Western and a solid foundation for the completion of the project.”

Western Resources Corp. and its wholly owned subsidiary Western Potash Corp. are constructing one of Canada’s newest and most innovative, environmentally friendly, and capital-efficient potash mines. It is expected to be the first potash mine internationally to leave no salt tailings at the surface, thereby reducing the water consumption by approximately half as well as significantly improving energy efficiency. Successful completion of the project will form the basis for further expansion.

New Legislation to Grow Indigenous Involvement in Saskatchewan Economy

On April 4, 2022 the Government of Saskatchewan introduced new legislation to create the Saskatchewan Indigenous Investment Finance Corporation (SIIFC), which will support Indigenous participation in the province’s natural resource and agriculture sectors.

The SIIFC will offer loan guarantees to eligible First Nations and Métis communities and organizations to support investment in forestry, mining, oil and gas, energy production, and value-added agriculture projects.

“Saskatchewan is fortunate to already have a number of successful Indigenous-led companies and organizations that are strong contributors to our province’s economic growth,” said Jeremy Harrison, Trade and Export Development Minister. “The SIIFC will enable more Indigenous involvement in our key natural resource and agri-value sectors, which will create economic opportunities in Indigenous communities and right across Saskatchewan.”

According to a news release, a lack of access to capital was identified as the primary barrier to Indigenous equity ownership of natural resource and value-added agriculture projects. This was discovered through regular discussions with Indigenous business owners, Indigenous leaders, and officials from major resource companies.

 The SIIFC will help to address this need by providing up to $75 million in loan guarantees for eligible projects. Minimum loan guarantees will be $5 million.

 “The SIIFC is a good start to providing support to First Nations to be leaders in energy development if they so desire,” said Heather Bear, Vice Chief of the Federation of Sovereign Indigenous Nations. “I look forward to heightened investment and collaborative partnerships in years to come working with First Nations and the province on this initiative. The First Nations are not against resource development, but rather, they support responsible and environmentally sound developments, and this legislation will allow us to work towards that end. When the First Nations benefit, the provincial economy does, too.”

 “We have been working together in partnership with the province and First Nations representatives since January to develop the framework of the Saskatchewan Indigenous Investment Finance Corporation (SIIFC),” said Glen McCallum, President of the Métis Nation of Saskatchewan. “The establishment of the SIIFC is a huge step forward for Métis and First Nation community-owned businesses in the resource, energy, and agricultural sectors. The availability of major project funding will further economic growth in Saskatchewan and our Métis communities.”

 Support for Indigenous resource development projects aligns with Saskatchewan’s Growth Plan goal to grow Indigenous participation in the natural resource sector.

Cameco to Restart McArthur River Mine, Key Lake

Cameco has announced that it will restart its McArthur River/Key Lake property, located 570 kilometres north of Saskatoon by air. The property is the largest high-grade uranium mine and mill in the world. In a February press release, the company broke down their plans to gradually return to production from a four-year safe care and maintenance phase.

By 2024, the company hopes to produce 15 million pounds per year (100% basis) at McArthur River/Key Lake, 40% below the annual licensed capacity of the operation. At that point, they plan to reduce production at Cigar Lake to 13.5 million pounds per year (100% basis), 25% below its annual licensed capacity, for a combined reduction of 33% of licensed capacity at the two operations.

“It will take us some time to transition McArthur River/Key Lake from care and maintenance to its planned production capacity as we complete critical automation, digitization and other projects, execute maintenance readiness checks, and achieve sufficient recruitment and training,” said Tim Gitzel, Cameco’s president and CEO. “In 2022, we could produce up to 5 million pounds, depending on our success in completing operational readiness activities and managing the potential risks of the COVID-19 pandemic and related supply chain challenges.”

Cameco has three tier-one properties in Saskatchewan: McArthur River Mine, Key Lake Mill, and Cigar Lake Mine. Additionally, the company owns 40% of Inkai Mine, in Kazakhstan. Cameco’s tier-one operations have the licensed capacity to produce more than 53 million pounds of uranium concentrates annually, backed by more than 464 million pounds of proven and probable mineral reserves. The company is also a leading supplier of uranium refining, conversion, and fuel manufacturing services.

Uranium is an important resource used to generate power in safe, reliable, carbon-free nuclear reactors. It is essential to the global transition to carbon-free electricity.

“We are optimistic about Cameco’s role in capturing long-term value across the fuel chain and supporting the transition to a net-zero carbon economy,” Gitzel said. “We believe we have the right strategy to achieve our vision and we will do so in a manner that reflects our values. For over 30 years, we have been delivering our products responsibly. Sustainability is at the heart of what we do. Embedded in all our decisions is a commitment to addressing the environmental, social and governance

Baselode Energy Extends ACKIO High-Grade Uranium Zone

Baselode Energy Corp. has announced an update to the its ongoing 20,000 metre diamond drilling program on the ACKIO high-grade uranium discovery, in the Hook project, located within the Athabasca Basin area in northern Saskatchewan.

"The radioactivity levels have been getting stronger and shallower as we've continued exploring to the southeast since the beginning of the drill program,” said James Sykes, CEO, President and Director of Baselode, in a press release. “Each new 50 m section that we drill to the southeast continues to surpass the results from the previous section. We are excited with the results from AK22-011 but both AK22-023 and AK22-032 have delivered better intercepts. Not only is radioactivity getting stronger to the southeast, but we are also intersecting it closer to the Athabasca sandstone unconformity.”

Since announcing the start of the program on February 9, 2022, Baselode has completed 29 drill holes (AK22-005 to AK22-033) for 8,750.95 m. To date, 12 of 29 drill holes have intersected continuously elevated radioactivity. Additionally, two drill holes presented the possibility of unconformity mineralization to the northwest of ACKIO. Future drill holes are planned to continue following the mineralized trends to the southeast.

Samples from these reported 14 drill holes have been submitted to the Saskatchewan Research Council's geoanalytical laboratory in Saskatoon for whole-rock, multi-element, and U3O8 analysis.

Baselode controls 100% of approximately 227,000 ha for exploration in the Athabasca Basin area, in northern Saskatchewan. The land package is free of any option agreements or underlying royalties.

SSR Finalizes Acquisition of Taiga Gold

SSR Mining Inc. has completed the acquisition of all issued and outstanding shares of Taiga Gold Corp. This means SSR Mining has consolidated a 100% interest in the Fisher property contiguous to its Seabee mine, eliminated a 2.5% net smelter return (NSR) royalty on the Fisher property, and added five new properties covering over 29,100 hectares to complement the company’s existing exploration platform in Saskatchewan.

According to a company press release, SSR Mining acquired Seabee on May 31, 2016 as a result of their acquisition of Claude Resources Inc. On April 14, 2022, SSR Mining expanded its existing exploration platform at Seabee through the acquisition of Taiga Gold. All of SSR Mining’s Saskatchewan assets now cover an area of approximately 131,150 hectares.

SSR Mining Inc. is a leading, free cash flow-focused gold company with four producing assets located in the US, Turkey, Canada, and Argentina, combined with a global pipeline of high-quality development and exploration assets. In 2021, the four operating assets produced approximately 794,000 gold-equivalent ounces. For more information, visit www.ssrmining.com.