VANCOUVER, BRITISH COLUMBIA (TSX VENTURE: PON) is pleased to
announce it has received a Technical Report compliant with NI
43-101 for its KP 416, KP 417 permit areas located in south
eastern, Saskatchewan. Dr. Michael Hardy of Agapito Associates Inc.
of Colorado, USA and Steve Halabura of North Rim Exploration of
Saskatoon, Saskatchewan authored the report.
The Permit Area is in close proximity to existing rail, road,
and electrical grids and is located immediately north of existing
commercial potash mines operated by Mosaic Potash and the Potash
Corporation of Saskatchewan. The Permit Area is located
approximately 35 kilometers (km) northeast of the town of Esterhazy
and approximately 20 km northeast of the operating Esterhazy, K1,
and K2 underground potash mines owned by Mosaic Potash Esterhazy.
The southernmost boundary of the KP 416 permit area is located some
45 km from the Potash Corporation of Saskatchewan's Rocanville
Mine.
Four cored and assayed holes that have commercial-grade potash
intersections are available and have been inspected by Dr. Michael
Hardy and Mr. Steve Halabura. The length-weighted average grade for
the Belle Plaine and Esterhazy intersections from those four holes
is listed in Table 1. Three other holes were cored within the
Permit Area but did not intersect potash mineralization because
they were either not deep enough to penetrate the potash bearing
zones or show evidence of leaching of the potash
mineralization.
Table 1. Length-Weighted Average Assay Results
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% Carn-
allite
Depth Thick- (KCl. % Water
Geologic Interval ness MgCl2. Insol-
Unit Drill Hole (m) (m) % K2O % KCl 6H2O) ubles
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Belle DH12 Southwest 820.5- 1.8 25.8 40.8 0.3 2.1
Plaine Potash Corp. 822.3
Member DH14 Southwest 833.0- 3.4 18.3 29.0 3.8 4.6
Potash Corp. 836.4
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DH01 Canberra 791.2- 3.3 21.5 34.1 9.7 0.9
Langenburg 794.5
Esterhazy DH03 Canberra 837.6- 3.6 21.6 34.1 11.8 0.7
Member Langenburg 841.2
DH14 Southwest 857.6- 15.7 9.2 14.5 8.9 1.0
Potash Corp. 873.3
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Historical data suggests that the northern limit of the Belle
Plaine Member intersects the western portion of the Permit Area and
that the Esterhazy Member is truncated through the Permit Area. The
exact positions of the truncation lines are presently unknown;
nonetheless, drill-hole data indicates that there is significant
area within the Permit Area that is underlain by potentially
mineable potash in the Esterhazy Member.
This historical drill hole data is reported for information
purposes only since the drilling data was collected prior the
development of the NI 43-101 reporting standards. This drilling
information has not been verified by Potash North and therefore
should be considered unreliable until further work confirms such
results. Currently there is no measured, indicated or inferred
resource in the Permit Areas.
Mineralization:
The potash mineralization identified in the Permit Area from
drill-hole data consists of two principal members: the Belle Plaine
and Esterhazy. These members were identified by Mr. Halabura based
on assays, cores, core descriptions and gamma ray logs, all
available from the Saskatchewan Ministry of Energy and Resources
located in Regina. Seven of the fourteen drill holes identified in
the immediate proximity of the Permit Area penetrate the
potash-bearing beds. Of these, four (DH01, DH03, DH12, and DH14)
have sufficient assayed core to allow the calculation of potash
mineralization thickness and grade, and all four are located within
the Permit Area. Of the remaining three holes (DH02, DH05, and
DH10) that cored through the Prairie Evaporite Formation, no assay
data is available because they are interpreted to be "leach"
anomalies. The remainder of the historical holes were not drilled
deep enough to penetrate the potash bearing zone.
The average thickness and weighted-average potash grade
expressed as "percent potassium oxide" or "% K2O" and the
insolubles based on the averages for four cored locations, two for
each member sited in the northwestern corner of KP 417 for Belle
Plaine Member (DH12 and DH14) and southeastern corner of KP 416 for
the Esterhazy Member (DH01 and DH03) are listed below:
Belle Plaine Member: 2.70 meters averaging 21.89% K2O, 3.40%
insolubles and 2.13% carnallite
Esterhazy Member: 3.45 meters averaging 21.55% K2O, 0.80%
insolubles, and 10.80% carnallite
Risks:
Additional work is required to further investigate three areas
of risk:
1. Continuity risk: This risk is the uncertainty concerning the
continuity of potash mineralization. The distribution of core holes
with potash mineralization intermixed with core holes without
significant potash intersections suggests a complex depositional
and post-depositional history. The barren holes are interpreted to
be due to collapse anomalies and leached zones which may be
localized in extent. Two- and three-dimensional seismic surveys are
necessary to establish the continuity of potash mineralization in
the Permit Area and to determine the northern limit of
mineralization.
2. Quality risk: This risk is the uncertainty concerning the
quality of potash mineralization and the distribution of
carnallite, particularly in the Esterhazy Member. This risk can be
mitigated with additional core analysis of future holes and
evaluation of the impact of carnallite on mining and
processing.
3. The thickness and continuity of the salt back: The thickness
of the salt interval between the top of the selected mining horizon
to the top of the Prairie Evaporite Formation, commonly referred to
as the "salt back", is an important parameter in safe mine design
and operation. The salt back controls the need for ground support
and the acceptable mining roof span and typically a salt back
thickness from 6 to 10 m is required for safe and efficient mining
using conventional underground mining techniques as in use at
Mosaic's Esterhazy Mine and PCS's Rocanville Mine. This risk can be
mitigated by gaining a better appreciation for overall thickness
and distribution of the Esterhazy Member, and rock mechanical
studies to determine a reasonable salt back thickness.
Recommendations:
In order to estimate the potash potential of the Permit Area,
the Technical Report recommends conducting a 2D seismic survey
followed by local 3D seismic surveys and selected drilling to
establish the continuity of the mineralization by identifying
portions of the ground that may contain anomalies that affect
potash mineralization.
A three-phase exploration is recommended for advancement of
Potash North's property in the KP-416 and KP-147 Permit Areas. The
exploration program includes engineering studies as the project
matures from a prospect to a commercial mine plan. The three phases
outlined below take the project through Preliminary Feasibility,
should each preceding phase bear a favorable recommendation to
proceed. The plan outlined below does not consider activities
specifically required for permitting and compliance with
environmental regulations.
Phase I
Design and implement an extensive 2D Seismic Survey of the
Permit Areas - estimated cost $1.5 to $2.5 million depending upon
final design of line layouts;
Phase II
Drill three to five core holes to intersect and sample the
potash Members. The location of the holes would be selected after
the 2D seismic survey has been completed and interpreted. The holes
would be located to establish and confirm a potential reportable
resource in compliance with NI 43-101 standards and would include
at least one hole close to an existing core hole for verification
of the historical core-hole data. Estimated Cost: $3 to $5
million;
Complete a Preliminary Assessment in compliance with NI 43-101.
This includes development of a geologic model, a proposed mine,
process, and marketing plan, and preliminary capital and operating
costs for the project. The Technical Report may identify NI 43-101
compliant Resource. Estimated Cost: $500,000;
Phase III
Complete a 3D seismic survey in the areas of highest potential
for commercial mining. Estimated Cost: $3 million.
Drill additional holes as necessary to confirm the extent of
potash and anomalies in the area of the mine plan and provide
preliminary input for shaft design and groundwater control.
Estimated Cost: $3 to $6 million.
Complete a Preliminary Feasibility Study to establish project
costs and define Reserves in compliance with NI 43-101 standards.
Estimated Cost: $3 million.
The complete Technical Report has been filed on SEDAR and the
Company's web site.
Potash North is currently negotiating service contracts and will
commence the recommended Phase I program as soon as
practicable.
The technical content in this news release has been read and
approved by Stephen P. Halabura P. Geo., a consultant to Potash
North and Principal Geologist and Owner of North Rim Exploration
Ltd., a Professional Geologist licensed in Saskatchewan and a
Qualified Person as defined by NI 43-101. Mr. Halabura is
independent of Potash North.
ON BEHALF OF THE BOARD
Craig A. Angus, President
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Potash North Resource Corporation Arlen Hansen (604)
684-6730
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