Potash explorer Karnalyte Resources (TSE:KRN) said Tuesday that it has contracted a third party company to carry-out an NI 43-101 compliant prefeasibility study on magnesium chloride production at its KP-360 property, in Saskatchewan.
The potash property, comprised of 83,981 acres, is expected to produce 500,000 tonnes of potash a year, with plans to grow to two million tonnes of potash per year.
"The solution mining process we intend to use to extract potash resources also recovers magnesium resources, which represents an opportunity to produce magnesium products as a second product line," said CEO Robin Phinney.
Under the contract's terms, Colorado-based Lyntek Inc will delineate the magnesium chloride production process flow, find out equipment requirements and give a capital and operating cost estimate for the production stream.
Lyntek provides services from process engineering and feasibility studies through detailed engineering, procurement, construction management, plant start-up, and pilot plants.
Karnalyte said it expects the prefeasibility study to be completed before the end of the year.
A preliminary assessment report, which Karnalyte received in 2010, estimates that the Wynyard Carnallite project, of which KP-360 is part, has indicated mineral resources of 50.2 million tonnes of magnesium chloride, and 130.9 million tonnes of inferred magnesium chloride.
Magnesium chloride products include raw materials for the steel and cement industry, the petrochemical and detergent industries, as well as mineral supplements for livestock, and additives and fillers for rubber and other polymers.
"Karnalyte has recognized this opportunity, and this pre-feasibility study is the first step to determining the potential and cost to process this magnesium stream," added Phinney.
Calgary-based Karnalyte Resources is engaged in the exploration and development of agricultural and industrial potash and magnesium products. Karnalyte owns a 100% stake in permit KP 360 and subsurface mineral lease KLSA-010, located near Wynyard, Saskatchewan.