Confederation Minerals is Pleased to Announce 56% Owned Magna Resources has Released a Technical Report Indicating Significan...
May 30 2012 - 8:15AM
Marketwired Canada
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES
Confederation Minerals Ltd. (TSX VENTURE:CFM) is pleased to report that 56%
owned Magna Resources Ltd. ("Magna" or the "Company")(CNSX:MNA) has announced
that American Potash LLC ("American Potash"), a wholly-owned subsidiary of
Magna, has received an independent Qualified Person ("QP") review and National
Instrument ("NI") 43-101 compliant Technical Report prepared by Agapito
Associates Inc. of Grand Junction, Colorado ("Agapito Report") regarding the
Company's extensive 20,619 hectares ("ha") Green River Potash Project (the
"Property") located within the geologically favorable Paradox Basin near the
town of Moab in Grand County, Utah.
Key Highlights of the Agapito Report include:
-- 600 million - 1 billion tonnes of potash are permissive in the horizon
known as Cycle 5, the main exploration target, which is known to host
potash at a nearby producing mine;
-- The Cycle 5 potash bearing horizon has the potential to grade up to 19-
29% KCl (potassium chloride) as indicated by down-hole gamma ray
surveys; and
-- The Cycle 5 sedimentary horizon is extensive and very continuous at
depth throughout the Company's large 20,619 ha property.
The Property is situated in the renowned Paradox Basin, host to the same
geological setting as the United States' sole solution mining potash operation
called Cane Creek. There, the sedimentary bed known as Cycle 5, which underlies
and extends throughout the Property, contains the principal potash
mineralization that is mined at Cane Creek and is the Company's prime
exploration target. Magna's Property has excellent infrastructure and year-round
access, and drilling is planned for the coming fall months.
"The postulated size and grade of the exploration target at the Company's Green
River Potash Project, as indicated by the Agapito technical report, is
impressive," states Mike Sieb, President, Magna Resources Ltd. "Tapping into one
of the largest commodity growth sectors with a project of this potential
magnitude, combined with a favourable location and climate, represents a rare
undeveloped opportunity for Magna."
Exploration Target
The Agapito NI 43-101 compliant technical report states that Magna's Green River
project has the potential to contain significant potash mineralization in
sufficient quantities and grade to be an attractive target for exploration and
potentially amenable to solution mining.
While no potash drilling has been conducted to date on the Property, numerous
oil and gas wells blanket the area. A total of 33 local and regional wells were
reviewed, forming the basis for the exploration target determination in the
Agapito Report. The majority of these historic wells penetrated the potash beds
of interest as indicated by a combination of lithology and down-hole geophysical
surveys including gamma ray, neutron density, neutron, resistivity and sonic log
data. Gamma ray response levels provided the principal basis to infer the
location, identification and estimation of potash beds' grade and thickness in
oil and gas wells.
Preliminary analysis of down-hole electric log ("elog") data suggests that
Potash Cycle 5 is a regionally-extensive sylvinite bed in the northern Paradox
Basin demonstrating continuous thicknesses and improving in thickness and grade
across the Property to the northeast. The best zone of mineralization appears
centralized to the northeast quadrant of the Property where inferred
potash-bearing Cycle 5 ranges from about 3 to 6 m thick and grades 22 to 25%
eKCl (the prefix 'e' in eKCl indicates that the grade was estimated utilizing
the response from the gamma ray log surveys and was not measured from chemical
analysis of the core).
The Agapito Report classifies Cycle 5 as a NI 43-101 exploration target
("Exploration Target") projected to contain between 600 million and 1 billion
tonnes of sylvinite with an average grade ranging between 19 and 29% eKCl,
assuming a bed thickness cut-off of 2.0 m and a composite grade cut-off of 15.8%
eKCl. Cycle 5 ranges between 1,200 and 1,900 m depth on the Property.
Table 1: Summary of the Cycle 5 Exploration Target(i)
--------------------------------------------------
Range
--------------------------------------------------
Average grade (% eKCl) 19 - 29
Average thickness (m) 2.5 - 5.0
Tonnage (Mt) 600 - 1,000
--------------------------------------------------
(i) Target cut-offs: 15.8% eKCl bed composite grade and 2.0 m bed thickness.
The Company is planning an initial drill program for the fall of 2012 to test
the extent, grade and thickness of Cycle 5 within the Property.
It should be noted that Exploration Targets are conceptual in nature and there
has been insufficient exploration to define them as Mineral Resources, and,
while reasonable potential may exist, it is uncertain whether further
exploration will result in the determination of a Mineral Resource under NI
43-101. The Exploration Target stated in the Agapito Report is not being
reported as part of any Mineral Resource or Mineral Reserve.
General Aspects of the Green River Potash Property
The Property encompasses 20,619 ha of land comprised of 11 state potash leases
totaling 2,853 ha owned by the State of Utah and 25 federal potash prospecting
permit applications ("PPA") totaling 17,766 ha applied for with the Bureau of
Land Management ("BLM") located in Grand County, Utah, 32 kilometers ("km") west
of Moab. The Property is adjacent to the Green River which lies to the west. The
Green River Property is accessed via numerous improved and unimproved roads from
US Highway 191 and Interstate 70, which is a major traffic corridor connecting
with Grand Junction (180 km) to the east and Salt Lake City (370 km) to the
northwest.
Major oil and gas pipelines and electrical transmission lines pass through
utility corridors in close proximity to the Property. The Union Pacific Railroad
Central Corridor mainline, connecting Denver and Salt Lake City, is 18 km north
and the Cane Creek Subdivision railroad spur, servicing the potash solution mine
operated by Intrepid Potash Inc. ("Intrepid"), is 16 km east of the Property.
The Property encompasses relatively flat, sparsely vegetated terrain on the east
side of the Green River, consisting of broad stepped mesas with low rolling
hills generally ranging in elevation between 1,370 and 1,670 meters. The
topography is sufficiently flat and the arid to semi-arid climate is suitable to
potentially accommodate evaporation ponds on various parts of the Property.
The Property is located within a geologic province known as the Paradox Salt
Basin that extends approximately 160 km in width and 320 km in length in a
northwest-southeast direction spanning southeastern Utah and southwestern
Colorado. During middle Pennsylvanian time, the Paradox Basin formed as a
restricted shallow marine environment marked by 29 evaporite sequences with
potash noted in 17 of the 29 evaporite cycles (Hite 1960, 1983). Intrepid's
local operation is extracting the potash from Cycles 5 and 9 through solution
mining and utilizing solar evaporation to re-crystallize the product for sale
and shipment.
Green River Potash Project NI 43-101 Technical Report
Agapito Associates, Inc. ("Agapito") was commissioned by American Potashto
provide an independent QP review and NI 43-101 Technical Report on the Property.
The Agapito Report incorporates information from an earlier NI 43-101 report
("2009 Report") on the Property prepared for American Potash. The 2009 Report
was an informational document focused on the Property's incipient exploration
potential. The current Agapito Report quantifies the Property's potash
exploration potential in the form of an NI 43-101 Exploration Target. The
Exploration Target estimate was prepared in accordance to the NI 43-101
guidelines of the Canadian securities regulators.
Potash bed correlations were developed from a total of 33 historical oil and gas
wells within which top and bottom picks and bed composite eKCl grades were
estimated and compiled. Potash bed thicknesses and grades were spatially modeled
across the Property using Carlson Mining 2011 Software Geology Module (Carlson
2011), an industry-recognized commercial-grade geologic and mine modeling
software system.
The potash beds of interest were gridded into single layers of 50-m-square
blocks of variable vertical thickness representing the local thickness of the
respective potash bed. Block thickness and eKCl grade values were estimated from
neighboring wells (point data) using an Approximation Base on Smoothing ("ABOS")
modeling algorithm. The ABOS method is well-suited to modeling tabular deposits
with widely spaced holes and produces results comparable to other common methods
such as kriging, radial basis functions, or minimum curvature. Grids were also
created for top and bottom elevations of each bed based on well intercept
elevations and using the ABOS method. Seam conformance was invoked in the ABOS
algorithm which forced the prescribed sequence of stratigraphy at all grid
locations, thus improving structural accuracy in areas with weaker drill-hole
control.
In-place potash tonnages were calculated using an in-situ bulk density of 2.08
tonnes per 3 cubic meters (t/m) typical for sylvinite.
As required by NI 43-101, a technical report to support the Exploration Target
estimate will be filed on SEDAR and be publically available within 45 days
following the date of this release.
Vanessa Santos, Chief Geologist with Agapito and a Licensed Professional
Geologist in the State of South Carolina, and Leo Gilbride, Senior Consultant
with Agapito and a licensed Professional Engineer in the State of Colorado, are
both the Qualified Persons (as defined by NI 43-101) for having prepared the
Exploration Target estimates and scientific and technical information in this
press release and have reviewed the results as reported in the table above.
The specific data referred to herein was obtained from historical sources
believed to be reliable but which have not and cannot be verified.
About American Potash
American Potash, a Nevada limited liability corporation, is a wholly owned
subsidiary of Magna Resources Ltd. Magna is a company dedicated to the
acquisition and development of potash mineral deposits in the USA and elsewhere,
and trades on the Canadian National Stock Exchange under the symbol MNA. Magna
consolidated 100 percent (%) membership interest in American Potash after
acquiring Confederation Minerals Ltd.'s 50% interest in American Potash on
January 12, 2012.
About Confederation Minerals
Confederation Minerals Ltd. is a British Columbia based company engaged in the
business of acquisition, exploration and development of mineral properties. Its
objective is to locate and develop economic precious and base metals properties
of merit. Confederation Minerals Ltd. holds an option agreement to acquire up to
70% of the Newman Todd project in the Red Lake Mining District of Northern
Ontario as well as 100% ownership in two other properties in the Red Lake Mining
District of Ontario. Confederation Minerals Ltd. owns 56% of Magna Resources
Ltd.
Confederation Minerals
On Behalf of the Board:
Brian Bapty, Ph.D., President
Statements in this press release other than purely historical information,
historical estimates should not be relied upon, including statements relating to
the Company's future plans and objectives or expected results, are
forward-looking statements. News release contains certain "Forward-Looking
Statements" within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended. Forward-looking statements are based on
numerous assumptions and are subject to all of the risks and uncertainties
inherent in the Company's business, including risks inherent in resource
exploration and development. As a result, actual results may vary materially
from those described in the forward-looking statements.
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