Intrepid Potash, Inc. Announces Preliminary Third Quarter 2011 Sales and Production Results and a Capital Projects Update, and Schedules Third Quarter 2011 Conference Call
Intrepid Potash, Inc. ('Intrepid?) (NYSE:IPI) announced today
preliminary sales and production results for the third quarter 2011 and
provided an update regarding three major capital projects.
Preliminary Sales and Production Results
On a preliminary basis, during the third quarter of 2011, Intrepid
estimates that it produced between 165,000 and 175,000 tons of potash
and sold between 185,000 and 195,000 tons of potash. Production results
for the quarter were consistent with expectations, as the scheduled
shut-down for annual maintenance work was completed at the East mine and
plant near Carlsbad, New Mexico, and the Moab, Utah mine completed its
summer evaporation season and commenced harvest in mid-September. The
lower relative production realized during the quarter will increase the
cash costs per ton of production realized in the quarter and the ensuing
periods when the produced inventory is sold.
Intrepid estimates its average net realized sales price for potash sold
during the quarter was approximately $485 ? $495 per ton, an increase of
approximately $23 to $33 per ton, over the second quarter of 2011.
Potash sales during the quarter were affected by certain customer
requests to delay shipment of committed orders of potash due to
interruptions in rail service caused by persistent high water levels in
certain customer locations along the Missouri River. Additionally, the
severe drought conditions in much of Texas continued to reduce demand in
that state. Intrepid was successful in marketing traditional Texas
potash volumes into other markets less affected by weather, albeit at
higher freight costs.
On a preliminary basis, during the third quarter of 2011, Intrepid
estimates that it produced approximately 30,000 ? 35,000 tons of Trio ?
and sold approximately 50,000 ? 55,000 tons of Trio ?.
Intrepid estimates that its average net realized sales price for Trio ?
during the quarter was approximately $245 ? $255 per ton.
Intrepid reports 'average net realized sales price,? which is an
operating performance measure. Average net realized sales prices are
derived by subtracting freight costs from gross sales revenue and then
dividing this result by sales tons.
Langbeinite Recovery Improvement Project Update
Intrepid continues to make positive progress towards the commissioning
of the Langbeinite Recovery Improvement Project being constructed at its
East Mine near Carlsbad, New Mexico. Portions of the new construction
were tied into the existing East plant during the aforementioned
maintenance turnaround in September. Intrepid expects the commissioning
of the new higher recovery Dense Media Separation plant to occur by the
end of 2011 and of the granulation plant early in 2012. The project
remains on budget with an estimated total capital investment of
approximately $85 - $90 million.
HB Solar Solution Mine Update
The HB Solar Solution Mine project near Carlsbad, New Mexico, remains on
track for an anticipated Record of Decision on the project from the
Bureau of Land Management in the first quarter of 2012. Intrepid expects
to provide an updated capital investment estimate for the project during
the fourth quarter.
North Compaction Project
Intrepid′s Board of Directors recently approved the construction of a
new compaction plant to replace its current compaction facility at its
North plant, near Carlsbad, New Mexico. The North compaction project is
designed to increase the capacity of the North plant to handle all of
the anticipated production from the HB Solar Solution Mine project and
the planned expansions of mining and milling capacity at the West mine,
near Carlsbad, New Mexico. The North compaction project is expected to
be completed in two phases to coincide with these production increases,
with completion of the first phase planned for early 2013 and completion
of the second phase planned for 2014. Intrepid expects to initiate the
permitting process for this project in the fourth quarter of 2011. Total
capital investment for the project is expected to be approximately $95
to $100 million, of which approximately $11 million has been invested to
date.
Third Quarter 2011 Conference Call
Intrepid is scheduled to release third quarter 2011 financial results
after market close on Wednesday, November 2, 2011. The teleconference
call to discuss third quarter 2011 results is scheduled for Thursday,
November 3, 2011, at 8:00 a.m. MDT (10:00 a.m. EDT). The call
participation number is (800) 319-4610. A recording of the conference
call will be available two hours after the completion of the call at
(800) 319-6413. International participants can dial (412) 858-4600 to
take part in the conference call and can access a replay of the call at
(412) 317-0088. The replay of the call will require the input of the
conference identification number 763324. The call will also be streamed
on the Intrepid website, www.intrepidpotash.com.
In addition, the press release announcing third quarter 2011 results
will be available on the Intrepid website before the call under
'Investor Relations - Press Releases.' An audio recording of the
conference call will be available at www.intrepidpotash.com
through December 3, 2011.
Intrepid is the largest producer of potash in the U.S. and is dedicated
to the production and marketing of potash and Trio ?, a
product produced from langbeinite ore. Intrepid owns five active potash
production facilities -- three in New Mexico and two in Utah.
Intrepid routinely posts important information about its business on its
website under the Investor Relations tab. The website address for
Intrepid is www.intrepidpotash.com.
Certain statements in this press release, and other written or oral
statements made by or on behalf of us, are 'forward-looking statements?
within the meaning of the federal securities laws. Statements regarding
future events and developments and our future performance, as well as
management′s expectations, beliefs, plans, estimates or projections
relating to the future, including statements regarding guidance, are
forward-looking statements within the meaning of these laws. Although we
believe that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, there can be no
assurance that the expectations will be realized. These forward-looking
statements are subject to a number of known and unknown risks and
uncertainties, many of which are beyond our control that could cause
actual results to differ materially and adversely from such statements.
These risks and uncertainties include: changes in the price of potash or
Trio ?; operational difficulties at our facilities that limit
production of our products; interruptions in railcar or truck
transportation services; the ability to hire and retain qualified
employees; changes in demand and/or supply for potash or Trio ?/langbeinite;
changes in our reserve estimates; our ability to successfully execute
the projects that are essential to our business strategy, including but
not limited to the development of the HB Solar Solution mine as a
solution mine and the further development of our langbeinite recovery
assets; weather risks affecting net evaporation rates at our solar
solution mining operations; changes in the prices of our raw materials,
including but not limited to the price of chemicals, natural gas and
power; fluctuations in the costs of transporting our products to
customers; changes in labor costs and availability of labor with mining
expertise; the impact of federal, state or local government regulations,
including but not limited to environmental and mining regulations, and
the enforcement of such regulations; obtaining permitting for applicable
federal and state agencies related to the construction and operation of
assets; competition in the fertilizer industry; declines in U.S. or
world agricultural production; declines in use by the oil and gas
industry of potash products in drilling operations; changes in economic
conditions; adverse weather events at our facilities; our ability to
comply with covenants inherent in our current and future debt
obligations to avoid defaulting under those agreements; disruption in
credit markets; our ability to secure additional federal and state
potash leases to expand our existing mining operations; and governmental
policy changes that may adversely affect our business and the risk
factors detailed in our filings with the U.S. Securities and Exchange
Commission. Please refer to those filings for more information on these
risk factors. These forward-looking statements speak only as of the date
of this press release, and, except as required by law we undertake no
obligation to publicly update or revise any forward-looking statement,
whether as the result of future events, new information or otherwise.
Intrepid Potash, Inc.
William I. Kent, 303-296-3006