Potash company revises disclosures after challenges

The British Columbia Securities Commission challenged Vancouver-based Passport Potash over statements they made about their potash project in Arizona's Holbrook basin. In response, Passport issued a press release describing changes they subsequently made in their disclosures to address the issues.

Mining Weekly reports that the regulatory agency "had a problem with the way the company presented the findings of a 2008 Arizona Geological Survey (AZGS) report [right] on the Holbrook basin, saying it came across as an estimate of potential as a resource." They further said:

The BCSC also raised issues with various instances where the company claimed to have 2.5-billion tons of potash, based on the AZGS report on the Holbrook basin, instead of using the 0.7-billion to 2.5-billion range the report cited. Also, the report was for the entire basin, while Passport only owns around one-quarter of the land area, with a deal currently under way to lift this to 32%.

Passport went on to say, the BCSC was concerned that the company was omitting some of the risks associated with the Holbrook project, particularly related to the fact that the property is located close to the protected Petrified Forest National Park.

Among other actions, Passport Potash removed a slide from a presentation and provided clarification on how they are using AZGS Open file Report 08-07:

The Company would like to clarify that the percentage of the land held by the Company refers only to the surface area of the land held within the basin. The isopach map, which the AGS [AZGS] included in their report, shows that the thickness of the potash beds within the basin on which the Company's properties lie can vary from 10 to 30 feet.

-- The AGS report provides two estimates for the total volume of the potash
contained within the Holbrook basin. The estimates were calculated using
different volume estimation methods. The lower of the estimates, which
the author of the report notes is the preferred estimate, shows that the
resource volume ranging from 682 million to 2.27 billion metric tons at
average grades ranging from 6% to 20%, while the higher of the estimates
shows the resource volume ranging between 775 million to 2.85 billion
metric tons at average grades ranging from 6% to 20%.
-- The potential quantity and grade of the potash from the AGS report is
conceptual in nature. There has been insufficient exploration to define
a mineral resource and it is uncertain if further exploration will
result in the target being delineated as a mineral resource.
-- The potential quantity and grade of the potential potash deposit
delineated by the AGS report has been determined solely from historical
exploration records.

The company also released results from five new core holes from their exploration drilling program:

Each hole intersected potash at depths ranging from 1123.5 to 1590 feet deep. The best interval averaged 24.0% KCl over 4.5 feet in which is included a 0.5 foot section containing 41.1% KCl.

All of the Company's available assayed holes and their respective locations may be viewed on the map available at the following link: http://www.passportpotash.com/nrdr2.html.