The world's largest mining company has high hopes its exploration work will see a mine constructed in the Melville area.
During a presentation to Melville city council last Monday, BHP Billiton and Boyd PetroSearch (BPS) representatives says seismic exploration currently underway will determine if the project will go ahead.
Derek Chubb, manager of sustainability and external affairs at BHP's Saskatoon office, says at this stage it's too early to say whether there'll be a mine in the area.
"Right now we cannot say if there will be a potash development in the Melville area. We are just finishing the 2-D (Two- Dimensional) surveys that we did over the summer. They are a little late because, like many things, weather was a delay factor for us," Chubb says.
Chubb is optimistic that the 3-D (Three- Dimensional) surveys will start on time.
"The 3-D surveys will take us to the point where we will know what the potential resource is in the Melville area and how best to harness it," Chubb says.
The 3-D surveys will happen in two stages, the first will start in November and continue until March next year.
This will be followed by a second stage of drilling from April to June 2011.
If there are positive results a third set of 3-D seismic tests will be done. This will involve "shot hole" drilling with a one-half kilogram of dynamite used in 35 holes drilled in areas in the exploration zone.
Chubb stresses that it is premature to say if there will be a Melville mine; it will depend on the seismic explorations. If the mine goes ahead it will be modeled on the Jansen mine operation currently under construction.
The presentation was wide ranging and covered everything from seismic exploration in the area to the scope of BHP's operations across Canada and the world. Chubb says the explorations in the Melville area have no correlation to the previous failed Agrium project.
In March of this year, Agrium announced it was putting the brakes on a $2.5 billion mine project for the Melville area. Citing low potash prices and high capital costs Agrium postponed its Melville area project.
"We don't base our explorations on what other companies are doing," Chubb says.
Council recently expressed concern BPS's seismic activity could adversely affect the city's well water supplies. BHP and BPS say the drilling within city limits is not unusual and the exploration process will help determine how best to extract the mineral without unnecessary disruption to stakeholders.
BHP currently has five projects underway in Saskatchewan that are in exploration stage. These projects are around Jansen, Melville, Burr, Young and Boulder. BHP has exploration rights to 14,000 square kilometers.
These projects are at different stages of development with Jansen being the focus.
"The presentation is part of our company's commitment to keep stakeholders informed of what is happening. The presentation was an opportunity to give an introduction to a wider range of stakeholders. We have already been working with city officials extensively this summer and this was a chance to introduce ourselves to council," says Chubb.
BHP has been making headlines in the province with its interest in taking over the Potash Corporation of Saskatchewan.
