EDITOR: | June 19th, 2013

Potash Minerals announces 902 million tons JORC compliant Potash update at its Hatch Point project

| June 19, 2013 | No Comments
image_pdfimage_print

redhillsstitch-smallPotash Minerals (‘Potmin’, ASX: POK) is sitting on major deposits of sylvinite in Utah at its Hatch Point Project and it is one of the major emerging players in the potash sector. The Company has already drilled many exploratory wells on State land but believes that the best potash is located on federal land property, for which it received permission to drill from the Bureau of Land Management at the end of last April. Overall, Potmin’s project covers a 146 square mile area and it has the potential to be a major player thanks to the fact that the full extent of this huge property has now been opened for development. In May, Potmin has issued an updated and  JORC-complaint maiden resource of 902 million tons of potash at 20% potassium chloride (KCl). The estimate was determined based on resources located within an area of the property covering less than 20% of the total and includes peaks of 24.4% and 30% KCL sylvinite. The size and scope of the area and the results obtained from just a small section suggest that further drilling will only enhance the size and quality of the resource.

Potmin’s next drilling phase will concern a 30 square mile (45 sq. mile) block of federal land. Potmin plans to start the new program by drilling four exploration holes. Potmin projects a production of some two million tons/year of high grade potash for a period ranging from 25 to 50 years. Potmin expects to find high grades of sylvinite in this area and while, there are large potash producers in the United States, Potmin notes that more than three quarters of the total potash used in the United States is imported from Canada, which means that its planned 2.0 million tons/year production would still only partially address US demand. The Potmin property is ideal for solution mining, whereby hot water is pumped in the ground to push up brine containing potash and NaCl (table salt), which is then separated through a process of heating, centrifuging and crystallizing, which also removes the water and recycles it with salt that is pushed back in the hole.

Potmin says that this allows for a continuous process of ‘mine closure’, because the salt is recycled back the soil during the production phase itself, filling in the well. The results from the drilling campaign on state lands completed in 2012 were favorable with the presence of potassium chloride mineralization (KCl) of between 23.7% and 25.3 %, indicating a strong potential for the presence of extractable sylvinite. Because sylvinite is easier to process, it will ensure the delivery of a higher quality potash that ultimately helps to offset costs often associated with other potash deposits, which require more processing to achieve anywhere near the desired potash quality.

Potmin has already identified the crucial water source, which is at the heart of the solution mining technique; the fact that it is non-potable water, from an on-site source, should also ease environmental and community risks. In addition, Potmin has the advantage of being based on North America, which takes away a lot of the risk. The Paradox basin and Utah are among the best mining destinations in the United States, marked by a very pro-business regulatory environment. Intrepid has run a large potash operation in the Paradox Basin for decades, offering an important source of experience and knowledge from which or companies like Potmin can draw to help it develop the project more efficiently – including the availability of a highly potash labor force, experienced in solution mining infrastructure and processing as well as the geography and climate.

As for the potash market, PotMin shares have suffered the same malaise that has affected other juniors in the past few weeks. The market remains unpredictable; however, the potash market fundamentals have actually improved considerably in the past two weeks. Potash prices have increased thanks the long awaited materialization of the late start of the North American planting season last May, as the unusually long winter in the agricultural industry intense Midwest region resumed. Some fertilizer suppliers in North Dakota and Minnesota reported running out of potash and other mineral fertilizers due to a rush of demand in May, eroding the abundant stock supply that had put downward pressure on prices. Inventories of potash in North America have dropped, which should allow prices of the commodity to continue rising. The main concern on commodity prices (and potash in particular) remains the possibility that India may devalue its currency, dampening demand for imported resources.


Editor:


Copyright © 2016 InvestorIntel Corp. All rights reserved. More & Disclaimer »


Leave a Reply

Your email address will not be published. Required fields are marked *