Prospect Global Resources, which controls a superb 90k acre site (state and private leases) in eastern Arizona’s Holbrook Basin that hosts a nice, relatively shallow potash deposit (around which the company intends to construct a state-of-the-art production facility), reported good news today out of an update to markets on their previously announced in-fill drilling program at the site.
President and CEO of PGRX, Damon Barber, commented on the successful completion of seven drill holes in the program, three of which were done as step-outs to expand the resource base, saying that the company is well on track for converting a significant volume of inferred category resources to measured and indicated. KR-2 seam potash (primary target) was intercepted in all four in-fill holes, as well as two of the step-out holes, something which should beef up the coming Definitive Feasibility Study figures nicely and Barber was especially pleased at the step-out work success, as it roundly extends overall mine life.
The fundamental development model for the site is largely reinforced by this latest drilling and is enhanced by the step-out data as well, as the company readies their initial sample batch for assay by SRC. The Holbrook Salt Basin itself sits in the Permian Supai Salt Formation’s upper layer, which is rich in potash and economically mineable at depths closer to Intrepid’s Carlsbad Mine in New Mexico, much shallower than other potash deposits currently on the global stage. The idea of churning this stuff out in eastern AZ via a state-of-the art facility is sound and the existing logistics, as well as direct access to primary regional ports and thus end markets, makes the deposit metrics all the sweeter.
The company will be chasing two distinct seams of potash in the Supai Formation, but the KR-1 is more erratic and thus the KR-2 will be the main focus. The NI 43-101report from 2012 on the Holbrook Project Resource used a 40%-foot cutoff and produced some handsome estimates, with 102.7M tons (5.7M measured, 44.2M indicated and 52.8M inferred) of Potassium Chloride (KCI) total and Sylvinite (halite, or sodium chloride and KCI mixture) totals across all categories as high as 634.1M tons (36.8M measured, 286.0M indicated and 311.3M inferred), so this latest drilling data has people at PGRX really buzzing with excitement. Average KCI grade in the measured category was 15.48% with very low carnallite and lower insoluble content than currently seen over at Intrepid’s Carlsbad Mine.
Additional drill work at the Holbrook Project includes another six holes, five of which are down past 1k feet or more and a sixth of which was down to around 520 feet as of this morning (Sep 4). This puts PGRX easily in striking distance of the eight hole development milestone target for Nov 1 as per their current debt agreement and investors will be really eager to get a look at the upcoming Definitive Feasibility Study. Smart moves by PGRX with potash currently stabilized at just under $400/ton amid growing demand from the global agribusiness sector despite last month’s shakeup with Russian giant Uralkali dropping out of the Belarusian Potash cartel. The potash space has become more competitive now and PGRX is really on the ball when it comes to creating a model that can succeed and thrive.
For more info on Prospect Global Resources, visit www.ProspectGRI.com
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