Announcement • Jul 07
Buffalo Potash Corporation Details Roadmap to First Production At Disley Project
Buffalo Potash Corporation announced its anticipated roadmap to production by way of its first facility, the Initial Production Module (IPM), at the Disley property in Saskatchewan, located adjacent to two of Canada's currently producing potash solution mines, the K+S Bethune Solution Potash Mine and the Mosaic Belle Plaine Solution Potash Mine. The IPM is the first of three planned solution mining facilities at the Disley Project, with a design capacity of 125,000 tonnes per annum (TPA) of soluble-grade potash, with first production targeted in the First Quarter 2027 and a lower initial CAPEX requirement compared to the full Disley Project build-out. At full build-out – comprising the IPM and two 500,000 TPA mines (Disley East and Disley West) – the Disley Project would be expected to produce up to 1,125,000 TPA of potash, as contemplated in Buffalo's recently released preliminary economic assessment titled “NI 43-101 Preliminary Economic Assessment Technical Report on the Disley Potash Project, Saskatchewan, Canada” dated May 21, 2026, and effective April 15, 2026. On a standalone basis, the preliminary economic assessment attributes a payback period of approximately 12 months from the start of IPM production. The Company's production decision for the IPM is not based on a feasibility study of mineral reserves demonstrating economic and technical viability, and such decisions are historically associated with a higher risk of economic and technical failure. The IPM is intended to establish early commercial production, generate well data that will support a feasibility study for Disley East and Disley West, and demonstrate the patented Horizontal Line-Drive Mining Method at commercial scale. The IPM will produce soluble grade potash intended to be sold into local markets, including drilling fluid and proximal agricultural applications. The drill rig is mobilizing to site in July and first production is targeted for the First Quarter 2027. The IPM is designed for the Company to establish initial cash-flowing production at lower upfront capital cost, while building the operational and technical foundation for full-scale development. Development of the IPM is anticipated to be broken down into five phases: Source and disposal wells; Horizontal Line-Drive (HLD) drilling; Brine circulation; Site development; and Surface processing. The first phase consists of drilling two vertical wells. The first well is anticipated to produce brackish water from the Mannville Formation (the Source Well), which is then anticipated to be saturated with NaCl for the solvent used in Buffalo's solution mining method. The second well will be used to dispose of excess brine, in the Deadwood Formation, after it has been processed at surface (the Disposal Well). Both wells will be cored and logged through the potash-bearing members of the Prairie Evaporite Formation, further enhancing geological understanding of the site and providing data that will inform the feasibility study for the larger build-out of Disley East and Disley West. Buffalo will then drill three horizontal wells from a single pad: a central well for brine injection (the Injection Well) and two parallel wells on either side for brine collection (the Production Wells), each with a horizontal leg of approximately 500 to 600 meters positioned at the base of an identified high-grade potash seam. Together, these wells form the initial underground infrastructure for the IPM and will be used to develop the solution mining plane. Multi-stage packers are set along each horizontal well, creating a series of isolated injection and collection points that allow the Company to evenly distribute brine and control pressure across the mining plane as brine from the Source Well is dispersed throughout the high-grade potash seam. Brackish water sourced from the Mannville Formation is brought to surface through the Source Well before being saturated with NaCl and pumped down the Injection Well to the Production Wells, thus creating the mining plane. Once the mining plane has been established, the NaCl-saturated brine selectively dissolves only the potassium-bearing mineral sylvite – sodium is left behind in the mining plane while the brine is progressively enriched in potassium chloride (KCl). The resulting KCl-rich brine is recovered through the Production Wells and delivered to surface for processing. Buffalo will complete surface development of the IPM site. The site will be winterized for year-round operation, with insulated buildings housing the injection pumps, crystallizers, and related processing equipment, protective enclosures over the wellheads, and a storage building for finished product. The final phase is the installation and commissioning of the IPM’s processing plant. KCl-rich brine recovered from the Production Wells will be processed through a two-stage cooling crystallization circuit, with the resulting KCl crystals then centrifuged, dried, and bagged for shipment. The plant is designed to produce up to 125,000 TPA of soluble-grade potash, in addition to local sales of KCl-rich brine. Buffalo is also evaluating a Vortex Crystallizer for the IPM, which offers the potential for reduced capital and operating costs and may be tested during operation of the IPM. Concurrently with development of the IPM, Buffalo intends to advance a feasibility study for the full build-out of the Disley Project. Core, geophysical logs, and other data obtained from the Source Well and Disposal Well are anticipated to be used to enhance geological certainty and confidence in the mineral resource, while operation of the IPM is anticipated to demonstrate the Company’s HLD mining method at commercial scale. These workstreams are expected to provide the technical foundation for a feasibility study covering Disley East and Disley West, positioning Buffalo to advance toward full-scale development of the Disley Project. The Disley Project is located approximately 50 kilometers northwest of Regina and covers 10,610 hectares (Crown and Freehold mineral rights). The property is situated immediately adjacent to the east of the K+S Bethune potash solution mine and north of the Mosaic Belle Plaine potash solution mine. On May 22, 2026, Buffalo released the results of its maiden NI 43-101 Mineral Resource Estimate and preliminary economic assessment for the Disley Project, prepared by Micon International Co Limited. The preliminary economic assessment outlined a phased, modular development plan contemplating full-scale production of up to 1,125,000 TPA of potash across three solution mining facilities, with an estimated after-tax net present value (NPV) of USD 1,100 million at a discount rate of 8% and estimated internal rate of return (IRR) of 30%.
