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World Class Fertilizer Products from World Class Assets

Potash West

Overview

Potash West NL (ASX:PWN,OTCPINK:PWNNY) is an Australian based mineral exploration company focused on developing potassium-rich glauconite deposits of the Perth Basin in Western Australia. The company dominates mineral tenure in one of the world’s largest glauconite deposits, which covers an area of over 2,900km2. Potash West’s goal is to maximize shareholder value by further defining their substantial potash resource base and bring the deposit into production. Previous exploration has indicated that glauconite sediments are widespread for more than 150km along strike and 15km in width.

Furthermore, to gain exposure to European markets, Potash West has also secured the right to earn a 55 percent interest in a German potash exploration project. The area features a wealth of historical data and is located next to existing producers and well-established infrastructure, meaning that Potash West is well positioned to rapidly advance this project.

Investment Highlights

  • Exposure to the growing fertilizer business – the region is a major importer
  • Strategic location
  • Skilled and experienced management team
  • Low risk start up with phosphate project
  • Blue sky with large scale K-Max process (a process developed by Potash West to produce a range of chemicals from Glauconite)
  • High margin operations
  • Control of one of the world’s largest known glauconite/greensands deposits
  • Set for future exposure to European markets through German potash exploration project
    • Significant resource potential
    • Strong expansion opportunities
    • Ready market on doorstep
  • Dinner Hill Phosphate Indicated Mineral Resource increased to 120Mt @ 2.8% P2O5, 3.1% K2O, and 8.2% CaO in March 2014

Key Properties

Dandaragan Trough Project

potash-west-map

The Dandaragan Trough Project is a massive mineral tenure covering nearly 3000 square km in Western Australia, and is thought to be one of the world’s largest glauconite deposits. The Dandaragan Trough land package begins only a short distance (60 km) from Perth, Western Australia’s largest city. The company’s objective is to produce not only potash, but also valuable by-products such as superphosphate which is also used as a commercial fertilizer.

In February 2012 the company completed a verge drilling program over the length of the Dandaragan Trough project. The 153 hole, 8,300m program identified ten prospective target zones over a distance of 140km. The drilling has demonstrated that near surface grades above 4% K2O are present.

The company then embarked on a substantial drill program to further define the potash resource, completing 3272 meters of test drilling in October. The total JORC compliant (Australian version of a NI 43-101) resource estimate is 244 million tonnes grading 3% K2O and 1.6% P2O5 respectively, including 122 million tonnes at 4.6% K2O, sufficient for a mine life of thirty years.

A 2,000kg bulk sample from the Poison Hill Greensand test program proved highly encouraging. Tests indicated that glauconite could be separated from gangue (waste) minerals by means of magnetic separation, thus enhancing the overall K2O content. Over 100 leaching tests were carried out with range of reagents and temperatures. After only six hours of leaching over 95% of potassium could be extracted from the glauconite concentrate.

The company is proceeding on a dual path approach to developing the glauconite resource. Firstly, concentrating on the economic extraction of the primary potash resource using new extraction techniques to achieve high rates of mineral recovery; and secondly, extracting bi-products of potash which include: iron ore, superphosphate, and aluminum sulphate, and determine the economic viability of those minerals. Marketing studies are underway to confirm prices and markets for these bi-products, which will enhance the economics of the entire project. A third-party cost estimate study is underway by Tenova Bateman Projects, who have expertise with potash operations.

Dinner Hill Resource

  • Total Resource 244 Mt @ 3.0% K20 (October 2012)
    • Including 122 Mt @ 4.6% K20 within less than 20% of Dinner Hill target area
  • Exploration target of 1 to 1.5 Bt
  • Phosphate Resource (JORC indicated), of 58 Mt @ 3.0% P2O5 announced on August 2013

UPDATE AS OF MARCH 21, 2014: Phosphate Indicated Mineral Resource increased to 120Mt @ 2.8% P2O5, 3.1% K2O, and 8.2% CaO

Dinner Hill K-Max Resource

  • Total high grade K-Max resource 122 Mt @ 4.6% K20, within less than 20% of Dinner Hill target area. Total area 60 sq km
  • Exploration target of 1 to 1.5 Bt, @ 4.0 to 4.8% K20

East Exploration Project

In July 2014, Potash West expanded its interests to Europe with its East Exploration joint venture project. The company acquired the right to earn up to a 55 percent interest in the project, located in the South Harz potash district of Germany. This strategic acquisition will allow Potash West to better serve European agricultural markets.

The joint venture has applied for two exploration license areas covering 450 square kilometers over the Kuellstedt and Graefentonna areas. Historical drilling on both areas – carried out before Germany’s reunification in 1990 – has intersected potash mineralization over large areas.

Under the terms of the agreement, Potash West has the right to earn:

  • A 25 percent interest in the JV by paying $100,000 towards license applications and the project’s advancement (completed)
  • A further 25 percent interest for a payment of $200,000
  • A further 5 percent interest for a payment of $50,000

Potash West will be working on the project with Ercosplan, world renowned potash consultants with a wealth of expertise in the region. The company plans to first target the Kuellstedt license area for evaluation, reviewing all existing data and targets. This is expected to be complete by the December quarter.
The region South Harz has seen significant potash mining over the past 100 years, with Germany being the fourth largest potash producer in the world. Both exploration properties are located close to existing producers such as K+S Kali GmbH, and next to established infrastructure for servicing both regional and global markets.

A research note from Helmsec Global Securities suggested that Potash West could “quickly and cheaply” move its German assets to JORC status, and anticipated that the company would see “a rapid advancement into the status of a potash producer,” after that.

Summary

Potash West NL has a dominant land position over one of the largest known glauconite deposits in the world. It has also expanded into the European potash market through a joint venture agreement for an exploration project in Germany. High recovery rates are possible with a relatively simple potassium extraction method as demonstrated on similar deposits of glauconite in India, USA and recently by Potash West. Potash West is in a prime position to exploit and commercialize the large potassium rich deposits of the Perth Basin and the historic South Harz potash disctrict  in Germany in order to take advantage of an increasing  world demand for potash fertilizer.

Management

Adrian Griffin, BSc (Hons) MAusIMM, MGSA, TMS – Chairman
Mr. Griffin, an Australian-trained mining professional, has had exposure to metal mining and processing worldwide during a career spanning more than three decades. A pioneer of the lateritic nickel processing industry, he has helped develop extraction technologies for a range of minerals over the years. Today, Mr. Griffin specializes in mine management and production. He is a former chief executive officer of Dwyka Diamonds Limited, an AIM-and ASX-listed diamond producer, was a founding director and executive of Washington Resources Limited and also a founding director of Empire Resources Limited, Ferrum Crescent Limited and Reedy Lagoon Corporation Limited. Additionally, Mr. Griffin was a founding director of ASX-listed Northern Uranium Limited, of which he is currently a non-executive director. He is also managing director of ASX-listed Midwinter Resources NL, an African-focused iron ore project developer.

Patrick McManus, BSc (Hons), MBA, FAusIMM, FAICD - Managing Director
Mr. McManus has a degree in mineral processing and an MBA. A mining professional in industrial minerals for more than thirty years, his work has taken him to many sites within Australia, such as Eneabba and the Murray Basin, and over seas destinations, such as Madagascar, Indonesia and the United States. During that time, Mr. McManus has worked in operational, technical and corporate roles for Rio Tinto, RGC Limited and Bemax Resources Limited.

Gary Johnson, MAusIMM, TMS, AICD - Non-executive Director

Mr. Johnson is a metallurgist with more than thirty years of broad experience in all aspects of the mining industry. In his early career, he gained operational and project expertise with a range of metals in operations in Africa and Australia. Later, he was a member of the team operating the metallurgical pilot plant at the giant Olympic Dam copper, gold and uranium project in South Australia.

In 1998, after ten years as chief metallurgist with a large gold producer, Mr. Johnson formed his own specialised hydrometallurgical consulting company. During this period he worked closely with LionOre Mining International to develop the Activox® process for treating sulphide concentrates. Then, in 2006, LionOre acquired Mr. Johnson’s consulting company, and he joined LionOre as a senior executive. In 2007, LionOre was taken over by MMC Norilsk Nickel and in 2009 he became managing director of the latter’s Australian operations.

Currently, Mr. Johnson runs his own consulting company, which specialises in high-level metallurgical and strategic advice. He also holds several patents in the field of hydrometallurgy and is a director of the TSX-listed Hard Creek Nickel Corporation.