Brian Zinchuk is editor and owner of Pipeline Online
Steve Halabura. Photo by Brian Zinchuk
MARTENSVILLE – If you’ve spent the last few years trying to put together the money to launch a new potash company, the announcement of Saskatchewan’s new Critical Mineral Strategy on March 27 just might sound like music to your ears.
That certainly is the case for Steve Halabura, CEO and founder of Saskatchewan-based Buffalo Potash, a startup that’s seeking to apply oilfield techniques and technology to small modular potash development. (Halabura is also a columnist for Pipeline Online.)
“I’m really happy the province recognizes potash as a critical mineral. But I also think the province recognizes that potash is to food security what lithium and rare earths are to energy security. And that’s very, very important. Today a lot a lot of people think it’s all about energy transition. But it’s also, I would say, as important a discussion is food security,” Halabura said on March 27.
One of the key new items is the increasing the Saskatchewan Mineral Exploration Tax Credit (SMETC) from 10 to 30 per cent. This is also known as “flow-through shares.” And for a new potash producer looking to get off the ground, it is a really big deal.
Halabura said, “I believe that the increase in the SMETC is huge. That really will make it easier to raise money via flow-through. Now, I’m hoping that tomorrow’s federal budget, the federal government, will include potash as one of the critical minerals that are eligible for the Critical Mineral Exploration Tax Credit. It will be an extra 30 per cent.”
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Halabura said it’s a cheap form of incentive that doesn’t really cost the province that much. “But it can generate a disproportionate return on that investment for new production, for new mines.
“So, it’s very good. I think it’s a good way to provide incentives without having to muck around with royalty rates or that sort of thing,” he said.
Asked if Buffalo would be taking advantage of the flow-through opportunity, Halabura said, “Absolutely! In fact, we’re going to rethink our budget and our financing strategy in light of this. I’m waiting to see what happens on the federal side. But this is this is significant for I think the small modular protoash sector in general.”
Buffalo is part of a new generation of small, modular potash producers, including Western Potash and Gensource, which are developing relatively quick, less expensive and incremental increased in potash production without having to go through the multibillion dollar, decade-long development process of creating new underground mines like BHP Jansen.
Halabura said, “That’s exactly what the whole point of what small modular potash is. You don’t have to go through the decades-long process. Mine construction is in the billions and billions of dollars. That always has been one of the major barrier entries to being in potash is the cost of thinking shafts or vertical caverns. That’s why you don’t know the last go round of potash interest, you only saw K+S come up with their mine is new greenfield mine. K3 is replacing K1 and K2, traditional mines are very, very expensive.
He pointed out that this form of potash development, as well as lithium will both have a similar impact on the oil and gas sector. They will largely use oilfield technology and services, like drilling rigs and service rigs, to access the resource, resulting in more drilling activity, more work, more jobs.
Buffalo Potash is continuing to work on financing for its Disley project, west of Craven. And these new developments will help in that process.
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