VANCOUVER, British Columbia--(BUSINESS WIRE)--Western Potash Corp. (WPX: TSX) (FSE: AHE) (“the Company”) is pleased to announce the receipt of a positive Feasibility Study (the “Study”) from AMEC Americas Limited (“AMEC”) on the Company’s 100% owned Milestone property in southern Saskatchewan (the “Project”). The Study confirms that the asset is of sufficient size and grade to support primary and secondary potash solution mining for more than forty years at an ultimate production rate of 2.8Mt/yr. The Study included detailed CAPEX and OPEX estimates with a production start up in 2016.

The Study reports that the resulting after-tax project Net Present Value (“NPV”) is $2.44B CAD, with an Internal Rate of Return (“IRR”) of 18.6 % assuming a nominal discount rate of 10%. On a before tax basis, the Project yields an NPV of $3.6B CAD and an IRR of 21%.

Patricio Varas, President and CEO commented, “Our Project is in an enviable, low risk geopolitical and regulatory jurisdiction, which is a key advantage for developers that look for long-term investment predictability. The lower capital intensity of the Project combined with the plant’s efficient operations and high throughput produce a project with attractive rates of return and significant free cash flow. These factors, coupled with the detailed scope of project evaluation, the size and grade of the deposit, and the project development expertise of the management team, presents a unique opportunity for investors and developers to secure an economical, reliable and long term supply of potash.”

Key Highlights of Study

The economic analysis performed in the Study was based on the following assumptions:

The Study includes all facilities required to operate a potash solution mine, including: cavern and wellfield layout, two-train multiple effect evaporization-crystallization plant, dry processing plant, product storage, load out and all other necessary site infrastructure. This design, which was detailed to a sufficient level to allow the capital cost estimate to conform to AACE “Class 3” standard, can accommodate future production expansion.

Table 1 and 2 evaluate the key economic sensitivities of the Project. Since the analysis is based on a cash flow estimate, actual financial results may vary from these predictions.

Table 1. Project Potash Price, OPEX, and CAPEX Sensitivities

Table 2. Project Discount Rate Sensitivities

The Project has excellent access to all infrastructure, utilities, services, and is supported by a world class potash Reserve. Power, natural gas, water, and existing rail connections are readily available near the Project. All major technical and execution project risks have now been mitigated. Non-technical project risks, such as environment and political concerns, remain low.

The Study was intended to provide a high degree of project definition, building on the Prefeasibility Study completed in September 2011. The Study included a solid set of engineering deliverables from AMEC, and consolidated input from other expert consultants including Whiting Equipment Canada Ltd (Process Design), Agapito Associates Inc. (Geology and Solution Mining), Impact Oilfield Management (Wellfield), Golder Associates (Environment and TMA), and KGS Group (Water Treatment). The Company was assisted by Novopro Projects Inc. who provided engineering oversight.

AMEC is a leading international engineering and project management company that currently manages multiple potash development and expansion projects in Saskatchewan with a capital value of several billion dollars. AMEC was chosen to carry out the Study because of their technical expertise as engineers and EPCM contractors, as well as their experience in potash mine construction, potash processing and their expertise in producing potash feasibility studies.

Summary of Reserve and Resource Update

The Company is pleased to further announce that as a result of the mine plan and favorable economic results developed and presented in the Study, a portion of the previously reported Measured and Indicated Resources have been upgraded to Proven and Probable Reserves respectively.

A summary of the results for Proven and Probable Reserves, and Measured, Indicated, and Inferred Resources within Crown and Leased Freehold Areas are presented in Tables 3 and 4.

A detailed break-down of the Reserves and Resources will be included with the NI 43-101 report to be filed as required by Canadian securities regulators. Agapito Associates Inc. (“AAI”) have made estimates of the Resources and Reserves based on a Radius of Influence (ROI) similar to that applied by mine operators and peer group explorers working on solution mining properties in the region. The Resource and Reserve estimate was prepared in accordance with the requirements of NI 43-101 of the Canadian securities regulators. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Table 3. Proven and Probable Reserves within Crown and Leased Freehold Areas*

* Search Radius of 800 m used for Proven and 1.6 km outside radius, 2.5 km inner radius (between drill holes) used for Probable; Mt = million tonnes; K2O cut-off grade = 15%; Density = 2.08 t/m³, KCl = 1.58303 K2O. Accounts for known geologic anomalies, unknown geologic anomalies (5% for Proven, 9% for Probable), and recoverable tonnages of KCl contained in caverns within the search radius. Accounts for 87.3% cavern, and 93.5% plant KCl recoveries.

Table 4. Measured, Indicated and Inferred Mineral Resource (exclusive of Reserves) within Crown and Leased Freehold Areas.*

The total Proven and Probable Reserves are sufficient to support mining at an annual rate of 2.8 Mt of KCl for 49 years, well beyond the mine plan contemplated in the Study. As commercial mining is initiated, the geological information from the ongoing wellfield drilling will be used to further define and expand the mineral Reserves and Resources. The Project Reserves and Resources have the potential to support an ongoing mining operation well into the next century.

The updated Resource and Reserve estimate was prepared by AAI of Grand Junction, Colorado. AAI’s experience includes work for Intrepid Potash Inc. in the US, Rio Tinto and Vale at the PRC project in Argentina, and work for several prospective potash projects located in Saskatchewan.The Qualified persons for the Resource and Reserve Estimate were Dr. Michael P. Hardy, P.E (US), P.Eng. (SK), and Dr. Douglas F. Hambley, P.E. (US), P.Eng. (SK), P.G. (US).

The Company will file an updated NI 43-101 Technical Report with Canadian securities regulators within 45 days of this release and will be available on SEDAR at www.sedar.com, and also on the Company's website at www.westernpotash.com.

EIS Update

Further to the news release issued on September 5, 2012, the Company wishes to provide an update on its Environmental Impact Statement (“EIS”) for the Project. The EIS was prepared and submitted to the Saskatchewan Ministry of Environment (“MOE”) in conformance with the Government of Saskatchewan’s “Environmental Assessment Act.” A review process of the EIS by the regulatory agencies is ongoing. Following a satisfactory technical review, the EIS will be posted on the MOE’s website and available for public review. The Company anticipates Environmental Assessment approval in the first quarter of 2013.

About Western Potash Corp.

Western Potash Corp. is a development company engaged in the evaluation, exploration and development of potash mineral properties in Western Canada. The Company intends to develop a world-class potash deposit in an ecologically sustainable, economically efficient and socially responsible manner.

The in-house qualified persons for the purposes of NI 43-101 guidelines are J. Patricio Varas, P. Geo and Dean Pekeski, P. Geo, both of whom have reviewed and approved the contents of this news release.

For more information on Western Potash Corp.’s projects, please visit the Company’s website at: www.westernpotash.com

ON BEHALF OF THE BOARD OF DIRECTORS

“J. Patricio Varas”

J. Patricio Varas
President and CEO

Forward-Looking Statement

This news release includes certain statements and information that may contain forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including the likelihood of commercial mining, securing a strategic partner and financing requirements and the ability to fund future mine development are forward-looking statements. Such forward-looking statements and forward-looking information specifically include, but are not limited to, statements concerning: Company plans at the Milestone Project; Company ability to fund the Milestone Project; the timing of granting of key permits; approval of the EIS; from the Study: the estimated potash production and the timing thereto, economic analyses, capital and operating costs, mine development programs, future potash prices, cash flow estimates, and economic indicators derived from the foregoing.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “occur”. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Western Potash to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including: the receipt of all necessary approvals; the ability to conclude a transaction; uncertainty of future production, capital expenditures and other costs; financing and additional capital requirements; the receipt in a timely fashion of any further permitting for the Milestone Project; legislative, political, social or economic developments in the jurisdictions in which Western Potash carries on business; operating or technical difficulties in connection with mining or development activities; and the risks normally involved in the exploration, development and mining business. Although management of Western Potash has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. Western Potash does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.

For more information please contact John Costigan, VP Corporate Development, at (604) 689-9378.