Elemental Minerals (ASX: ELM, TSX: ELM) has intersected the highest grade potash mineralisation to date at its Kola deposit, part of the Sintoukola Project in the Congo Basin, from drilling of the new Hangingwall Seam.
The Hangingwall Seam averages over 3 metres thick, is shallow, and has an extremely high average grade, around 55% higher than Elemental's previously highest grading sylvinite seam - the Upper Seam.
Importantly, the receipt of these last two intersections marks the completion of the 8-hole, Phase 2B resource expansion program which paves the way for the delivery of an updated Resource in August.
The program is also a key step to finalising the inputs for the Pre-Feasibility Study, scheduled for release in September.
Highlights from the two additional intersections of the Hangingwall Seam include 37.8% K2O (59.86% KCl) from 222.58 metres, and 34.2% K2O (54.15% KCl) from 196.48 metres.
Iain Macpherson, chief executive officer, commented: "These results further highlight the exciting potential of not only the Hangingwall Seam, but also the potential of the Sintoukola Project as a whole, and indeed the Congo Basin, to play a meaningful role in the future of the potash industry.
"The exceptional grade compares extremely favourably to both our current peers, but most significantly, appears very strong when compared to the history of potash developments.
"The Hangingwall Seam itself appears to be laterally extensive, is flat to gently dipping and consistently 2 to 4 metres thick; making it a simple, conventional mining target that presents a substantial opportunity to enhance the already excellent project economics of Sintoukola."
The Hangingwall Seam is a new discovery and was not included in the previously announced Resource, which predominantly comprised mineralisation contained within the Upper and Lower Seams of the Kola deposit.
The grade of the Hangingwall Seam intersections range from 30.58% K2O (52.36% KCl) to 37.8% K2O (59.86% KCl).
The Hangingwall Seam presents an opportunity to fundamentally change the Sintoukola deposit's potential due to its extremely high grade and, consistent with the Upper and Lower Seams at Kola; its thickness, shallow depth and suitability for simple, conventional mining.
The Hangingwall Seam is also the target seam at the Dougou prospect, 15 kilometres to the southwest of Kola.
Sintoukola is already proving itself to be a potential Tier 1 greenfields potash project, with its high grade predominant sylvinite resource and substantial exploration upside.
The Sintoukola Project's Kola deposit currently contains 959 million tonnes of Measured and Indicated Resources with an average grade of 15.11% K2O (23.93% KCl), and 513 million tonnes of Inferred Resources with an average grade of 15.33% K2O (24.27% KCl), at a 10% K2O cut-off.
Within such Resources, the sylvinite portion of the deposit contains 413 million tonnes of Measured and Indicated Resources with an average grade of 20.39% K2O (32.39% KCl), and 261 million tonnes of Inferred Resources grading 19.16% K2O (30.33% KCl), at a 10% K2O cut-off.
With grades of around 20% K2O, the project sits at the top end of the industry curve.
The project's shallow depth allows for large scale, low cost mining.
It is an advanced project in favourable market conditions, presenting an opportunity for Elemental to enter a market set to increase in demand by 4.5% per year.
The economics for the project are also extremely favourable with a CAPEX of US$930 per tonne of KCl capacity for a 1.8 million tonne per annum operation, which places Sintoukola on the lower end of the cost curve when compared to other potash developments.
Importantly for investors, Sintoukola product will be priced at a premium due to quality and favourable ocean freight costs to Brazil.
Investors are likely to be monitoring Elemental closely as it amps up news flow.
Catalysts for re-rating are likely to be the impending Resource update, set for August, followed by the completion of the Pre-Feasibility Study in September.
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