By Teri Walker —
As Passport Potash prepares to release a report detailing how much potash it can expect to mine in the Holbrook Basin, it is tightening up its land holdings and royalty arrangements.
Passport, a junior mining company based in Vancouver, British Columbia, and Apache Junction, has purchased the Mesa Exploration Corp.’s interests in the basin, and its NSR (net smelter return) royalties.
Mesa Exploration, also based in Vancouver, said it sold its two percent royalty and remaining interest in the Basin to Passport for $300,000. Ken Bond of Passport explained that Mesa Exploration had already sold 75 percent of its interest in the basin to Passport previously. Under its previous arrangement, Mesa would have earned two percent royalty on the potash mined from the property in which the company held an interest.
Mesa Exploration plans to use the money earned from the transaction to advance a potash project in western Utah, and as general working capital.
Bond said the property involved in the acquisition is located in the southern area of the basin, near the Hopi Tribe property. The company has been working with the Hopi Tribe to shore up relations and agreements in preparation for mine development.
“As we prepare for the release of our 43-101 Resource Report at the end of this month, we felt it was in the best interests of the company and its shareholders to firm up our ownership interest in these properties,” said Passport President and CEO Joshua Bleak.
Passport has begun its second round of drilling in the basin in an effort to gather additional information about the potash deposits under its 81,315 acres of land holdings.
Until it unveils its resource estimate later this month, the company cannot make any firm statements about whether it will ultimately develop a mine in the Holbrook Basin, and how much potash it expects to extract each year, although in a recent community forum, Bleak said he anticipates a Passport-operated mine might yield about two million tons per year.
Potash is a mineral that is used primarily in the production of fertilizer.