Transit Holdings steps into big leagues with potash exploration target of 5Bt in Utah Friday, July 08, 2011 by Proactive Investors
A one billion increase in the potash exploration target for Paradox Basin will provide momentum for Transit Holdings in the development of the project. Transit will kick off a drill campaign in July/August targeting the upgraded JORC Resource as part of a Pre-Feasibility Study. Transit Holdings (ASX: TRH) has increased the total potash JORC exploration target estimate for the Paradox Basin Potash Project, Utah, to 3.4 to 5.2 billion tonnes of sylvinite ore at an average grade of 23% to 34% KCl.
The upgrade was confirmed by Transit's specialist consultants, Agapito Associates, Inc.
With New York-listed Intrepid Potash Inc (IPI:NYSE) successfully producing potash from solution mining just 10 kilometres to the north of Transit?s Project, there is room for optimism for the potential of Transit's producing potential at Paradox Basin.
Right-of-Way access was recently granted by the Bureau of Land Management to access State leasing blocks.
Previously the exploration target for the company's 90%-owned US potash asset was from 2.5 to 3.8 billion tonnes of sylvinite ore at an average grade of 19% to 29% KCl.
In June Transit was granted approval from the U.S. state of Utah to commence a maiden potash focused drill campaign at the joint venture Paradox Basin Potash project.
The approval was received within two months of filing the application and drilling will begin in July or August, consisting of four exploratory wells to augment a database of historical drilling.
Importantly, the company?s focus is on sylvinite, a high grade form of potash ore that is cheaper and more effective to process to a saleable form than any other form of potash ore.
Transit expects to have a JORC Resource after drilling the four holes and the analysis of subsequent results.
The company and joint venture partner, K2O Utah LLC, are currently preparing the budget and initial drill campaign as part of the project?s Pre?Feasibility Study.
The drill campaign follows a Scoping Study completed by the joint venture based on two million tonnes per annum production of KCl (potassium oxide) from solution mining of the potash deposit. The study demonstrated the project has robust financials.
The joint venture will shortly begin working on approvals to drill on federal land to further delineate the resource.
The project covers applications for 386 square kilometres of prospective potash permits in the Paradox Basin in southeast Utah and the project is in close proximity to infrastructure because of surrounding gas fields.
The company said increased quantity and grade of the exploration target was attributed to:
- Improving the land position by adding another area richer in sylvinite while eliminating an area which was not as attractive; and - The addition of data from Whiting Petroleum?s Threemile 43-18H hole and several historical holes which confirm bed continuity extending several miles south and southeast of the property.
Transit?s potash project is located in a sought-after position within the Paradox Basin and, can tick off a number of boxes including, close proximity to quality infrastructure, flat topography, flat lying potash beds and a high grade sylvinite target.
Transit appears undervalued when compared with other potash companies based on a possible Resource for Transit from the initial 4 holes.
TRH Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
