Wednesday, October 19, 2011

Report is upbeat on Holbrook basin potash potential

The potash resource assessment for American West Potash's holdings in the Holbrook basin is now available online. [right, location map from the report showing the AWP lands in yellow, relative to the potash limits in red] They report Indicated Resources on the company's 94,000 acres at 158 million metric tonnes of sylvinite, with about 16 MMT of K2O; and Inferred Resources of 560 MMT of sylvinite with just over 66 MMT of K2O. The 100-page study concludes:

  • AWP’s Project Area, when compared to other sedimentary basins hosting potash deposits, exhibits several positive factors that make it favourable for further potash exploration, resource delineation, and possible mine development.

  • The resource calculated at this time for the Project Area appears to be sufficient enough to support further detailed resource, process and PEA studies.

  • Potash resources appear to be of comparable grade, thickness and with low impurities, such as insolubles and carnallite, when compared to Intrepid’s Carlsbad Mine.
  • The potash beds in the Project Area occur at relatively shallow depths, less than 551 m (1600 ft).

  • Seasonal climate variations are minimal compared to Canadian and Russian potash operations which lower operation costs.

  • Unlike other parts of the world where potash is mined, there is no competition with the Oil and Gas industry in the Holbrook Area (Rauzi S. L., 2008).

  • The Project Area is close to very large, year round potash markets in Arizona, California and Mexico. The US imports more than 80 % of the potash it consumes and is the second largest consumer of potash in the world. The Project Area is close to four international export ports.

  • The state of Arizona supports the development of its mineral resources, works closely with the mining industry and has a favourable potash royalty structure.

  • The Project Area is in close vicinity to infrastructure including rail, major highways, gas and power.

  • The infill drilling program and additional exploration work should focus in the north central part of the Project Area. The historical work conducted by Rauzi (Rauzi S. L., 2008) and the updated potash isopach figures shown in Section 7.1 suggests that the potash may be of better quality in that part of the Project Area.

1 comment:

  1. Anonymous9:53 PM

    Good numbers for PGRX. PPI (Passport Potash)also announced that they too will have prelim numbers by end of October.

    The basin's numbers will certainly start to get some attention by major potash players, IMO.

    Rob (Vancouver,BC)