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Oct 282011
 

 

By Teri Walker–

Passport Potash, LLC has signed a letter of intent to purchase NZ Potash, LLC’s 50 percent ownership interest in HNZ Potash, LLC, a subsidiary of Hunt Oil of Texas. If the sale goes through, Passport and HNZ Potash would jointly own more than 200,000 acres of mineral rights in the Holbrook Basin, which is being explored for potash mining potential.

“We are extremely excited with the prospects which this LOI presents to the company,” said Passport President and CEO Joshua Bleak. “The added lands are an ideal complement to our current land position.”

Previously, Passport controlled more than 70,000 acres, with an LOI to purchase the 41,000-acre Fitzgerald Ranch, which would push its holdings to more than 110,000 acres.

By signing the letter of intent, Passport is poised to take over NZ Potash’s interest in the Holbrook Basin.

NZ Potash is a subsidiary of NZ Legacy, which owns close to one million acres of mineral rights across Arizona, New Mexico, Colorado and Oklahoma, according to the company’s website.

The letter of intent does not signal a final sale, however. Jeanne Phillips, senior vice president of corporate affairs and international relations for Hunt Oil, said Hunt has the right of first refusal to the purchase of NZ Potash’s portion of HNZ Potash.

“We do not know if we will exercise the right of first refusal clause. We are considering that, but we do not know at this time,” said Phillips.

HNZ Potash is presently a privately owned company, as is Hunt Oil. Asked whether entering into a joint venture with Passport Potash would change the company’s private status, Phillips replied, “We cannot speculate today as to how a possible future relationship, yet undetermined, might operate.”

Up to this point, three companies have been exploring the Holbrook Basin for potash mining potential: Denver-based American West Potash; Passport Potash, which is based in Vancouver, Canada and Apache Junction; and HNZ Potash.

American West Potash just released its 43-101 report, an instrument widely used in the mining industry to verify mineral resources. Passport Potash expects to release its 43-101 in the coming weeks, and HNZ Potash is currently working on its report, from which Phillips said the company will be sharing findings with Passport Potash.

Asked why HNZ would consider partnering with Passport Potash in the Holbrook Basin, should the purchase of NZ Legacy’s interest go through, Phillips replied, “As a private company, we have a long-standing policy of not commenting on matters involving our business relationships.”

Passport is less reticent in its expression of enthusiasm.

“We look forward to working with HNZ Potash and believe that the synergy created by this combination, in addition to providing a more detailed delineation of the potash deposition in this area, will move the companies forward in ways that were impossible working separately,” said Bleak.

Map courtesy of Passport Potash

Passport Potash and HNZ Potash will jointly hold more than 200,000 acres of mineral rights in the Holbrook Basin if Passport’s acquisition of 50 percent ownership of HNZ Potash becomes final.

 

 

 

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