Critical Mineral Co. Advances High-Grade Utah Potash Project Toward Feasibility

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Sage Potash Corp. (SAGE:TSX; SGPTF:OTC) has successfully secured all necessary approvals and permits from local county authorities and the State of Utah, green lighting the commencement of drilling operations at its Sage Plain project in San Juan County, according to a June 18 release.

The final go-ahead was issued after a routine site inspection on May 28 by officials from the Utah Division of Oil, Gas, and Mining, along with representatives from Sage Potash and its contractors. This inspection also included the posting of required drilling-reclamation-related bonds.

"Receiving final approvals marks a major milestone in the advancement of the Sage Plain potash project," said Chief Executive Officer J. Patricio Varas. "Our technical team has designed a focused multipurpose drill program aimed at generating the critical geological and hydrogeological data required to potentially upgrade the resource and advance the project toward feasibility studies and detailed engineering. We are confident this program will further demonstrate the quality and scale of the project while being executed safely and efficiently."

The company has appointed Westrock Energy Services (USA) Inc. to manage and coordinate the drilling program, with Drake Well Service Inc. serving as the drilling contractor. The drilling initiative aims to target these potash-rich layers to both expand and enhance the resource confidence. This effort is seen as key to developing what management believes is one of the most promising high-grade solution mining potash targets in North America.

The campaign's agenda will also feature a thorough hydrogeological assessment, including targeted drill stem tests in formations with adequate water flow. These tests are designed to evaluate yield rates and water quality, focusing primarily on saline non-potable aquifers crucial for future solution mining operations. Additionally, fluid sampling and detailed water analysis will be conducted to aid future processing design and cavern development. Mechanical testing on the core will also be completed to gain valuable information required for the mining operational plans.

Upon completing the coring operations, the open borehole will be subjected to a comprehensive suite of geophysical wireline logs, the release noted. The extracted potash horizon core samples will be sent to an independent laboratory for detailed geological logging, geochemical sampling, and assaying. These procedures will adhere to strict quality assurance and control protocols to verify the grade, continuity, and thickness of the sylvinite mineralization.

The company anticipates releasing an updated resource estimate in the third quarter of 2026. This update will integrate findings from the current drilling efforts and historical data, setting the stage for subsequent feasibility studies, detailed engineering, and broader development planning. The company and its contractors are preparing to mobilize for the drilling program imminently.

Sage Potash is dedicated to advancing its flagship Sage Plain potash project in Utah's Paradox basin. With a substantial and high-grade resource base, the company is focused on establishing a reliable and sustainable domestic potash production platform in the United States, committed to food security, environmental stewardship, and generating value for shareholders and stakeholders alike.

Major USDA Grant

Last year, the U.S. Department of Agriculture (USDA) awarded a US$14 million grant to the company as part of its Fertilizer Production Expansion Program, aimed at increasing the production and availability of fertilizers in the U.S. The funding is a crucial component of the financial plan for the project, which targets an annual production of 300,000 tonnes of potash, according to a report by Mining Technology.

The grant is particularly significant as it supports the U.S. efforts to enhance domestic potash production, a vital nutrient for plant growth and a critical element in global food security. Currently, the U.S. imports over 90% of its potash from abroad, including Canada, the former Soviet Union, and the Middle East. The financial support from the USDA is therefore seen as a strategic move to reduce dependency on foreign potash supplies.

The importance of potash was underscored in May 2025 when it was designated as a critical mineral by an Executive Order from U.S. President Donald Trump, the report noted. This designation was confirmed in August 2025 when potash was added to the draft list by the Department of the Interior and the U.S. Geological Survey. Being classified as a critical mineral brings several strategic benefits, including access to federal funding opportunities and tax credits, which are advantageous for companies involved in the production of potash.

The company plans to implement solution mining, a method that involves injecting brine to dissolve potassium chloride underground and extracting it to the surface for processing. This method is considered safer and more environmentally efficient than traditional mining approaches.

Last September, the company released a Preliminary Economic Assessment (PEA) for the project at a capacity size starting at 150,000 tonnes per year (tpy) and expanding to 300,000 tpy. The PEA reveals impressive project economics, including an unlevered, after-tax Net Present Value (NPV) of US$502 million at an 8% discount rate, and an Internal Rate of Return (IRR) of 39%. The project is based on a premium potash deposit estimated at 298 million metric tonnes, featuring a high potash (KCl) grade of 42.1% (equivalent to 26.6% K2O), with less than 1% insolubles and a minimal 0.01% carnallite content. This positions the project not only as a significant domestic resource but also as a critical mineral initiative that supports U.S. domestic production with potential for future capacity and resource expansion.

Financially, the project is expected to generate positive cash flow within two years and achieve a rapid payback on investment within five years. From a capital expenditure perspective, the project is characterized by relatively low startup costs estimated at US$155 million. This total includes US$26 million allocated for contingencies and US$16 million for indirect construction costs, which together constitute 27% of the total project expenditure. These financial attributes enhance the project's appeal and feasibility as a significant player in the U.S. potash market.

Expert: Shares Are 'Absurdly Cheap'

On June 22, 321gold.com's Bob Moriarty noted he had been approached by the company.

"You need to know a little about growing plants," Moriarty wrote. "They need three different chemicals for ideal growth: nitrogen, phosphorus, and potassium. Potash supplies the potassium. For the U.S., Canada supplies about 81% of the needed material, with Russia providing an additional 15%. The U.S. only produces 5-10% of the potash demanded; the rest is imported."

The price of potash stands at around US$400 per tonne. According to the U.S. Geological Survey, Utah alone harbors about 2 billion tonnes of potash, indicating a significant domestic resource.

Sage Potash boasts potash grades of 36-46% KCL, which are among the highest globally, Moriarty said. The company employs a solution mining technique, involving the pumping of brine into a deep well to reach a potash layer that is between 5.5 and 7.3 meters thick. Sage has identified two high-grade potash beds: the Upper Cycle 18, which contains 179 million tonnes at 46% KCL across 7.26 meters, and the Lower Cycle 18, which comprises 128 million tonnes at 35.77% KCL across 5.46 meters.

Sage has initiated a drilling program aimed at expanding these resources as outlined in their NI 43-101 report, which currently shows an inferred resource of 298 million tonnes at 36-46% KCL.

"The company believes they can release an updated 43-101 and results from the current drill program by September," Moriarty noted. "With a current market cap of about CA$22 million, about 0.4% of the NPV, the shares seem absurdly cheap to me."

Targeting Potash Identified By Historical Drilling

According to Paula Fabe reporting for Mining.com.au on June 21, Sage's drilling strategy includes the creation of a 1.275-kilometer step-out hole extending north-northeast from the initial exploration hole, which serves as the basis for the current resource estimation.

"Historical drilling identified significant potash mineralization within the Cycle 18 upper and lower beds at depths of approximately 2,100 meters," Fabe wrote.

She continued, "The company says drilling will target potash-bearing horizons to expand and upgrade resource confidence levels, while a comprehensive hydrogeological assessment will evaluate yield rates and water quality in saline non-potable aquifers."

The Catalyst: An Irreplaceable Fertilizer

Investopedia defines potash as a collection of potassium-based salts that are water-soluble and predominantly used as fertilizers, with potassium chloride (KCl) being the most common form. It is extensively used to enhance the taste, texture, yield, and water retention of various crops including corn, wheat, rice, and cotton. The importance of potash is underscored by the fact that it is irreplaceable as a fertilizer, with a report noting that "there is no substitute for potash as a fertilizer," and pointing out that 85% of its use in the United States is dedicated to agriculture. Beyond its agricultural applications, potash is also utilized in the production of soap, glass, and ceramics.

The U.S. Geological Survey's National Minerals Information Center provided insights into the geological origins of global potash reserves in its 2025 report, detailing how ancient shallow seas deposited potash-bearing salts like potassium chloride and sodium chloride, which were later buried deep within the earth's crust. This geological process has resulted in potash production being concentrated in a few regions globally, with Belarus, Canada, China, Germany, Israel, Jordan, and Russia accounting for nearly 94% of the global supply. The United States, however, has limited domestic production, primarily in New Mexico and Utah.

According to a market analysis by Grand View Research, the global potash market was valued at US$62.37 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 5.3% through 2032. This growth is driven by increasing global food requirements, soil nutrient depletion, and the rising adoption of precision agriculture techniques. The report from Grand View Research also highlighted that in 2024,

"The agriculture end-use segment dominated the market with a revenue share of 93.1%," attributing this dominance to potash's critical role in enhancing crop yields, root development, and drought resistance. Furthermore, the potassium chloride segment, also known as muriate of potash (MOP), accounted for a 53.0% revenue share in 2024 and continues to be the most extensively used form of potash worldwide. This segment is particularly vital in nitrogen-phosphorus-potassium (NPK) fertilizer blends and experiences strong demand in major agricultural nations such as India and China.

Ownership and Share Structure¹

About 4% of Sage Potash is held by management and insiders. The rest is primarily retail.

Sage Potash has a market capitalization of CA$22.29 million. It has 171.24 million shares outstanding and a 52-week trading range of CA$0.12 - CA$0.50.