Intrepid Announces the Successful Completion of the Eddy Shaft Brine Extraction Project
Denver, Nov. 02, 2023 - Intrepid Potash Inc. ("Intrepid," "we," or "our") (NYSE:IPI) today announced the successful completion of the Eddy Shaft Brine Extraction Project ("Project") at its HB solar solution mine ("HB") in Carlsbad, New Mexico after an eight-month permitting process. The Project provides access to a high-grade brine pool in the Eddy Cavern that was originally targeted by the IP30A extraction well, which failed and was plugged and abandoned in the fourth quarter of 2022.
Project Highlights & Management Commentary
The Project utilizes the existing Eddy Shaft to access a 270-million-gallon brine pool with a potassium chloride ("KCl") concentration expected at over 9% (1). We estimate this 270-million-gallon brine pool will translate to 85 to 110 thousand potash product tons which will be incremental to other brine sources at HB (2). By utilizing the Eddy Shaft, we avoided the time and capital associated with drilling and only incurred costs related to the installation of a new pump system and corresponding surface infrastructure.
We expect the production contribution from the Project to begin in the second half of 2024 and carry into 2025, with this brine source and extraction point becoming a consistent, longer-term contributor to our production as we continue brine injection over time. The Project's brine pool is currently being extracted at a rate of approximately 750 gallons per minute and we expect the 270-million-gallon brine pool to be pumped into our ponds by the start of the 2024 summer evaporation season.
Our brine cycle at HB is a continuous process: brine is injected into the cavern system, we then extract brine from low points in the cavern after sufficient residence time, while continuously replacing extracted brine with new injection to replenish the caverns and continue the development of high-grade brine pools. Accordingly, as we extract the high-grade brine in the Eddy Cavern, we'll continue our injection throughout the HB cavern system which will help maximize the brine availability and residence time to support brine grade and production rates over the longer-term.
Bob Jornayvaz, Intrepid's Executive Chairman and CEO commented: "Revitalizing our potash assets has been a key focus for Intrepid in 2023 and I'm very pleased to share that we successfully commissioned the Eddy Shaft Brine Extraction Project before the end of the year. This is an important step in returning our annual HB potash production to the previous highs from 2017 to 2019. In a normal brine injection and extraction cycle, it can take well over a year of residence time to achieve a brine KCl concentration of over 9%, a level that has preceded our best production years. Beyond serving as a bridge to higher potash production in 2024 and 2025, the Project is important for another key reason: by extracting this already-enriched brine in the near-and-medium-term, we'll be able to keep injecting brine throughout the HB cavern system - including in the Eddy Cavern - and let that brine build and develop into other sources of high-grade brine pools, which is crucial for driving sustained, higher production over the longer-term."
Project Summaries at HB
Increasing production at the HB solar solution mine is key for improving Intrepid's overall potash production profile and unit economics. Successfully completing the Eddy Shaft Brine Extraction Project is an important near-term bridge to higher production until we commission the two remaining projects, Phase Two of the HB Injection Pipeline Project and New Replacement Extraction Well. Both remaining projects are expected to be commissioned in the first half of 2024 and are designed for long-term operational lives.
Phase Two of the HB Injection Pipeline Project is the installation of an in-line pigging system to clean the inside of the pipeline to help ensure consistent flow rates. Upon completion of Phase Two, we anticipate operating at the highest brine injection rates in company history which will help maximize brine availability in the HB cavern system. IP30B replaces the failed extraction well, IP30A, and will initially target approximately 330 million additional gallons of brine in the Eddy Cavern that has been measured at over 9% KCl concentration. This additional brine is at depths that are too low for access by the Eddy Shaft.
For detailed summaries on our potash projects and assets, we encourage investors to view our recent presentation, "Overview of Intrepid's Potash Operations," which can be assessed from the Investor Relations tab at intrepidpotash.com.
Notes
(1) To date, we've extracted approximately 34 million gallons of brine with an average KCl concentration of approximately 9.2%.
(2) The estimated range of potash product tons is dependent on the exact brine grade, brine volume, and evaporation scenario. The Eddy Shaft brine is expected to be the primary source of potash production for the second half of 2024 and early-2025.
About Intrepid
Intrepid is a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products essential for customer success in agriculture, animal feed and the oil and gas industry. Intrepid is the only U.S. producer of muriate of potash, which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications and used as an ingredient in animal feed. In addition, Intrepid produces a specialty fertilizer, Trio®, which delivers three key nutrients, potassiu7m, magnesium, and sulfate, in a single particle. Intrepid also provides water, magnesium chloride, brine, and various oilfield services.
Intrepid serves diverse customers in markets where a logistical advantage exists and is a leader in the use of solar evaporation for potash production, resulting in lower cost and more environmentally friendly production. Intrepid's mineral production comes from three solar solution potash facilities and one conventional underground Trio® mine.
Intrepid routinely posts important information, including information about upcoming investor presentations and press releases, on its website under the Investor Relations tab. Investors and other interested parties are encouraged to enroll at intrepidpotash.com, to receive automatic email alerts or RSS feeds for new postings.
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management's control) that may cause our actual results in future periods to differ materially from anticipated or projected results. Forward-looking statements in this press release include, among others, statements about the volume, KCl grade, and expected production from the brine pools in the Eddy Cavern, and the estimated completion date of certain projects. An extensive list of specific material risks and uncertainties affecting Intrepid is contained in our Annual Report on Form 10-K for the year ended December 31, 2022, and other quarterly and current reports filed with the Securities and Exchange Commission from time to time. Any forward-looking statements in this press release are made as of the date of this press release, and Intrepid undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
Contact
Evan Mapes, CFA, Investor Relations Manager
Phone: 303-996-3042
Email: evan.mapes@intrepidpotash.com