TORONTO (miningweekly.com) – Project developer Encanto Potash has received an expression of interest through its strategic adviser Horgen Holdings from private equity fund manager Fengate Capital Management for the development, construction and financing of a 100 MW power station for the proposed Muskowekwan potash mine and processing plant to be built in Saskatchewan.
Encanto president and CEO James Walchuck on Friday said, should Fengate be able to provide acceptable commercial terms for the cost of power, the capital outlay for the project as calculated in the prefeasibility study would be reduced by $250-million, with the associated positive financial impact.
“It's a big win for Encanto and shows the confidence from the financial industry that we are committed to building this mine,” Walchuck highlighted.
Fengate expected that the electricity project would produce energy using natural-gas-fired generation technology that would produce both heat for steam production and electricity (cogeneration). The engineering, procurement and construction cost was expected to be more than $250-million.
Fengate, which had developed and financed several other power plants, would undertake the project with a development partner that would lead the technical scope of the project and had identified several qualified candidates. Fengate would lead the capital funding of the project, including investing the equity capital and arranging the project debt.
Once the project had been completed it would make it possible for the region of Saskatchewan to be serviced by the new infrastructure and receive preferential electrical rates.