Potash One Inc. (the "Company" or "Potash One") (TSX: KCL) announced today that it has significantly increased the potash resource estimate on the Company's Legacy Project - a planned solution mine in Saskatchewan, Canada, based on an updated technical report prepared pursuant to NI 43-101.
The report expands and upgrades the estimated resources on the 97,240-acre project to the following new levels:
- 29 million tonnes of Measured potash resource;
- 222 million tonnes of Indicated potash resource; and
- 852 million tonnes of Inferred potash resource.
Paul F. Matysek, President and Chief Executive Officer of Potash One, said that the results are a major advance for the Company.
"The updated Measured and Indicated resource estimate provides a sufficient potash resource foundation for a pre-feasibility study based on a projected production rate of 2.5 million tonnes per year. Subject to financing and a successful feasibility study, the Legacy Project could enter the potash marketplace as early as late 2013 and be the world's first greenfield potash mine since 1987."
The following table (Table 1) summarizes the updated resource estimate on the Legacy Project:
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Resource Area Thickness KCl Grade Resource
Category Mm3 m % MMT
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Measured 5.62 37.83 25.8 29
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Indicated 47.48 34 26.3 222
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Total 53.1 251
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Inferred 225 33.5 23.8 853
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The Potash Resource is the estimated metric tonnes of refined potash product, taking into account the recovery by solution mining and processing losses (i.e. extraction factor, cavern recovery factor, geological anomaly factor, and processing losses). A cutoff grade of 15.8% KCl and a radius of influence from cored drill holes of 0.8, 1.6 and 8 km were used for the Measured, Indicated and Inferred areas respectively.
During the Resource Confirmation drilling program, Potash One drilled six holes totaling more than 9,000 metres. The Company also carried out approximately 271 linear kilometres of 2D seismic and approximately 73 square kilometres of 3D seismic surveys. The 2008-2009 Potash One drilling program and 3D seismic survey focused exclusively on the southern area of the KP-289 lease. The southern target area has the potential for expansion to the west, north, and east.
The updated resource estimate adds 29 million tonnes of Measured potash resource, 157 million tonnes of Indicated potash resource (a 242% increase) and 230 million tonnes of Inferred potash resource (a 37% increase) to the January 24, 2008, estimate.
The updated potash resource estimate is effective May 12, 2009, and was prepared by Dr. Michael Hardy, P.E., of Agapito Associates Inc., of Grand Junction, Colorado, and Steve Halabura, P. Geo., of North Rim Exploration Ltd., of Saskatoon, Saskatchewan. The resource estimate was prepared in accordance with the requirements of NI 43-101 of the Canadian securities regulators. As required by NI 43-101, a technical report supporting the resource estimate will be filed on SEDAR and be publicly available within 45 days following the date of this news release.
The updated NI 43-101 technical report is a key step toward completing the pre-feasibility study (PFS) for the Legacy solution-mining project. The PFS is being prepared by SNC Lavalin of Montreal, Quebec, and is expected to be completed early next month. In addition to the 2.5 million tonnes per annum study, SNC Lavalin is preparing a cost estimate addendum based on 800,000 tonnes per annum, which is targeted for completion in July this year. Note that mineral resources are not mineral reserves and do not have demonstrated economic viability.
The Technical Report being prepared by Agapito Associates et al. will include a summary of results of the Resource Confirmation programs conducted in 2008 and early 2009 (see Table 2), in addition to the original information contained in the January 24, 2008, NI 43-101 Technical Report Concerning Subsurface Mineral Permit KP 289, Findlater Area, Saskatchewan, prepared by the same authors.
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Table 2 - Summary of 2008-2009 Legacy Resource Confirmation Activities
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Resource Confirmation Program Start Date Completion Date
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2D Seismic Survey (Phase I) March 2008 June 2008
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2D Seismic Survey (Phase II) August 2008 October 2008
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2D Seismic Survey (Phase III) October 2008 December 2008
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3D Seismic Survey January 2009 March 2009
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Drill Program September 2008 February 2009
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A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable; however, at this time the Mineral Resources do not have demonstrated economic viability. At this time, no part of the Mineral/Potash Resource can be claimed as a Mineral Reserve because a Preliminary Feasibility Study has not been completed. As noted above, a Preliminary Feasibility Study is in progress and will be released in June 2009. At that time, a further NI 43-101-compliant estimate of Mineral Reserves will be released.
This news release was reviewed by Dr. Michael Hardy P.E., of Agapito and Associates Inc., and Steve Halabura P. Geo., of North Rim Exploration Ltd. Both individuals are Qualified Persons under NI 43-101 Rules and Policies and are the authors of the updated NI 43-101 Technical Report on which this news release is based.
The technical content in this news release was read and approved by Debbie Shewfelt, M.Sc., P.Geo., of North Rim Exploration Ltd. Ms. Shewfelt, a consultant to Potash One, is a Professional Geologist registered in the Province of Saskatchewan and is a Qualified Person as defined by NI 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F. Matysek, M.Sc., P.Geo., President and Chief Executive Officer
About Potash One Inc.:
Potash One Inc. is a well-funded, TSX-listed Canadian resource company engaged in the exploration and development of advanced potash properties amenable to solution mining. The Company owns 100% of more than 515,000 acres of Potash Subsurface Exploration Permits in Saskatchewan, Canada. It includes the 97,240 acre Legacy Project, which has a NI 43-101-compliant Measured Resource of 29 million tonnes of KCl, an Indicated Mineral Resource of 222 million tonnes of KCl and an Inferred Mineral Resource of 852 million tonnes of KCl. The Legacy Project is adjacent to the largest producing solution potash mine in the world.
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the corporations' periodic filings with Canadian Securities Regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. Statements in this press release other than purely historical information, including statements relating to the companies' future plans and objectives or expected results, constitute forward-looking statements. Forward looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the companies' business, including risks inherent in mineral exploration and development. The companies do not assume the obligation to update any forward-looking statement. There are numerous risks and other factors that will influence a development decision, including concluding resource evaluations on mineral properties, extraction and processing design limitations, financing requirements, permitting risks and economic factors, all of which may be beyond our control.
The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.
Contacts: Potash One Inc. Paul F. Matysek, M.Sc., P.Geo. President and Chief Executive Officer (604) 331-4431 (604) 408-4799 (FAX) This email address is being protected from spambots. You need JavaScript enabled to view it. www.potash1.com
SOURCE: Potash One Inc.
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