By Teri Walker —
Passport Potash Inc. is continuing to explore the land holdings it has acquired in the Holbrook Basin in an-ticipation of moving forward with a potash mining operation east of Holbrook, and has provided the first results from its 2012 drilling program.
Passport had Saskatchewan Research Council Laboratories in Saskatoon, Canada, analyze samples extracted from two wells that were recently “cored” in the basin. The core samples revealed three meters of 17.07 percent KCl from the first hole and 1.99 meters of 16.82 percent KCl from the second.
KCl, or potassium chloride, is a salt composed of potassium and chlorine used primarily in the development of fertilizer worldwide.
Passport Potash President Joshua Bleak says the findings are very favorable, and coupled with his com-pany’s previous drill results and historic data, begin to reveal a grade (or percentage) of potash across Passport’s land holdings at thicknesses that should satisfy investors and financers that the Holbrook Basin has mineable potash.
Passport has added the data derived from the two new holes to that which has been analyzed from the other 31 holes the company has drilled since beginning exploration in the basin in 2009. The company has set a minimum threshold of 1.5 meters thickness and eight percent KCl to consider a particular well result of a high enough quality to be suitable for commercial mining.
Bleak prefers to see grades in at least the 10 to 12 percent range, a grade he considers “more mineable,” so results on the order of 16 and 17 percent, like those found in the company’s most recent drill holes, are wel-come.
“At this stage, we’re continuing to drill so we can tell a more complete story (of the mineral present under Passport’s land holdings),” said Bleak. “The more holes you can put in the ground and prove that, the more con-fident you can be that the potash is there.”
Prior to the new drill hole results being available, Passport published a resource report, called a 43-101, which reported an initial resource estimate of 125.6 million tons of indicated mineralized material with an aver-age KCl grade of 14.29 percent and 587.8 million tons of inferred mineralized material with an average KCl grade of 12.2 percent. The estimates cover only about 40 percent of Passport’s land holdings; the other 60 per-cent have not yet been explored.
This week, Passport is moving its drilling operation southeast of the Fitzgerald Ranch, a private ranch the company just entered into a purchase agreement to buy last week. The ranch owners have given Passport per-mission to explore on the land prior to the sale closing in December.
Bleak said his company plans to drill eight additional wells in the area this year, and hopes they’ll continue to find the quality of grade and depth they’ve discovered with their recent core results.
“With these results, we’re proving there’s potash in the area and we hope to continue to prove and tell the story that we’ve found another area underlined by potash,” said Bleak.
Proving the story is important for Passport, and for other operators exploring the Holbrook Basin, including Denver-based American West Potash and HNZ Potash, a partnership between a subsidiary of Hunt Oil and NZ Legacy, an Arizona land development company. (HNZ Potash has not revealed information about its project development.)
Both Passport and American West need external funding to finance their mine building operations, a cost that American West has put at about $1.33 billion in its preliminary economic assessment.
With 12 to 15 potash mining projects hoping to get off the drawing board and into the ground globally over the next decade, the pressure is on companies to convince potential investors that theirs are the ones to fund.
Both Passport and American West believe Holbrook Basin potash mines would be low risk ventures for investors because of the relatively shallow depth of the potash deposit; existing infrastructure of roads, electric, rail and water available in the basin; temperate climate; political stability; and community support.
Both companies are seeking funding from foreign investors, primarily in China and India, where fertilizer demand is high and growing, and through financial institutions and investment groups in the United States and Canada.
Passport previously announced it had secured funding for its 2012 operations, but it now needs to come up with $15 million for the Fitzgerald Ranch purchase and is seeking investors.