Apr 272011

By Linda Kor —

Interest in Holbrook Basin potash is increasing as the Arizona Oil and Gas Conservation Commission recently issued 16 additional permits for potash exploration core holes in the basin. Two of the permits went to the HNZ Potash joint venture, which is currently drilling its previous permits with a reported land position of 74,000 acres. Fourteen permits were issued to American West Potash, the first for this company.

American West Potash is a new company formed between Karlsson Group and Pat Avery’s Global Prospect, meaning the company controls the Holbrook lands that Passport Potash discussed acquiring from Karlsson last fall.

According to information provided by the Arizona Geological Survey, Karlsson Group has contributed to American West Potash leasehold positions consisting of approximately 32,000 gross acres in the Holbrook Basin in consideration for a 50 percent interest in American West Potash. Karlsson will provide to American West Potash technical resources, mining expertise and industry knowledge together with a cash investment of $11 million in consideration for a 50 percent equity interest.

A majority of the American West lands are on the eastern side of the park, wedged between Passport Potash holdings to the south and Ringbolt Ventures Ltd. holdings on the northeast.

A recent options agreement with Ringbolt has the potential to expand Passport’s foothold to include land in the eastern portions of the Holbrook Basin, increasing Passport’s land holdings to more than 86,000 acres, or 134 square miles.