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  • Potash West Tastes More Success At Potassium-Rich Glauconite Project In WA  0 comments
    May 7, 2013 1:27 AM

    Potash West (ASX:PWN) has identified extensions to its current Dinner Hill mineral resource with early exploration confirming the significant potential of the at the Dandaragan Trough Project in Western Australia.

    The company has identified significant area of fresh greensand mineralisation that extends its current Dinner Hill mineral resource to the south, east and north and early exploration has reaffirmed Dandaragan Trough as a stellar potassium-rich gluconite resource

    Independent geological consultant Continental Resource Management has estimated an exploration target of 1000 million tonnes to 1500 million tonnes of fresh greensand at a grade of between 4% and 4.8% of K2O; 8% and 10% of Al2O3; 12% and 14% Fe2O3 and 2% and 2.4% MgO.

    Also included in the 65 square kilometres exploration target is 300-600 million tonnes of phosphate mineralisation at a grade of between 1.5% and 3% P2O5 mineralisation.

    Last October it defined a JORC compliant Indicated Resource of 241 Mt at 3.0 % K2O including 120 million tonnes at 4.6% K2O.

    Patrick McManus, managing director, said, "This exploration target is a strong endorsement of our opinion that the mineral resource within the Dandaragan Trough project will ultimately be very large."

    He added that the JORC resource of 122 million tonnes at Dinner Hill identified last year was sufficient to provide a mine life of more than 60 years at the scale chosen for the scoping study.

    "This exploration target is many times larger than that and it is clear that the project has the exploration upside to be able to be expanded to match the market demand for the various co-products," McManus said.

    Exploration target

    The targeted mineralisation is the fresh greensand within the Molecap Greensand seam, which contains the mineral glauconite, from which the company is planning to extract fertiliser products that contain potassium, phosphorous and magnesium and additional iron and aluminium as co-products.

    Phosphate mineralisation occurs as nodular horizons of aptite at various levels within the greensand, while within the area of the exploration target it is present as a horizontal sheet.

    The exploration target is based upon aircore drilling done by the company during 2012 and 2013, with the 2012 results defining the Dinner Hill mineral resource.

    Assay results for the 2013 Dinner Hill drilling are expected later this month, with geological modeling and grade estimation likely to be done by the end of July 2013.

    Drilling in other zones of mineralisation will also be evaluated.

    Scoping Study

    The new exploration target follows a positive scoping study outlined in January that proved both the technical and economic viability of the project with a processing plant being set up at the Dandaragan Trough project.

    The scoping study only used the initial Dinner Hill resource estimate and demonstrated the that the company's proprietary K-max processing technique is able to produce sulphate of potash and other products.

    Dandaragan Trough project

    The Dandaragan Trough project is Potash West's flagship project in the Perth Basin and is believed to be one of the world's largest glauconite deposits. Potash West holds exploration licences and applications in 15 tenements covering an area of 2,905 square kilometres.

    Last October it defined a JORC compliant Indicated Resource of 241 Mt at 3.0 % K2O including 120 million tonnes at 4.6% K2O.

    The project has access to infrastructure with the scoping study assuming the processing facility to be sited between the towns of Moora and Dandaragan, both 170 kilometres north of Perth.

    Both towns are well positioned for rail and road access and located within 30 kilometres of natural gas (Dampier-Bunbury gas pipeline) and electricity corridors.

    Western Power's Mid West Energy project is likely to expand electrical capacity in the mid west from the current 150 megawatts to 680 megawatts by 2018, which could provide additional power for future expansion of plant capacity.

    Analysis

    The delineation of new exploration target at Dinner Hill reinforces the Dandaragan Trough project's viability and scale and its potential to be one of the leading gluconite resource.

    While the scoping study itself was modeled on a small scale as a 2.4 million tonnes per annum project, providing a mine life of 60 years, the new exploration target of between 1000 million tonnes and 1500 million will potentially boost the mine life manifold.

    Also, with the recent reporting significant intersections at Dambadjie and Attunga, where the thickness of the greensand is in excess of 50 metres, the company could be in the threshold of an expanded resource base that will increase the tonnage and minimise the mining footprint.

    Potash West's prospects are boosted as it is also aided by access to local markets where fertiliser is in much demand and once production capacity is expanded, exports markets can also be readily tapped with access to transportation infrastructure.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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