Passport Metals Inc. Acquires Potash Property in Arizona
Passport Metals Inc. has entered into a mineral option agreement with Southwest Exploration Inc., a private Arizona incorporated company, to acquire a 100 per cent interest in 13 State Leases, comprising 8,413.3 acres (3,404.76 ha). The properties to be designated the “Holbrook Holdings” are located in Navajo County, covering portions of the prospective “Holbrook Basin”. According to Steven Rauzi, of the Arizona Geological Survey, the Holbrook salt basin contains halite (common table salt) and potassium-rich deposits in the early Permian Supai Formation. Previous exploration has reported the presence of potassium minerals sylvite, carnallite, and polyhalite in the main potash zone.
Passport is acquiring 100% of the Holbrook Holdings, subject to a 1% NSR retained by Southwest Exploration Inc., by making payments of up to $1,000,000 over two years and the issuance of 250,000 shares and in addition warrants exercisable for a further 1,000,000 shares. Passport will have to expend minimum exploration commitments of US$200,000 on the Property and complete a National Instrument 43-101 report. A finder’s fee will be paid in accordance with TSX Venture Exchange policies.
The city of Holbrook is located 380 kms (235 miles) north and east of the capital of Phoenix, by Interstate highway. Holbrook, with a population of 5,100, is located about 12 kms (8 miles) west of the western edge of the Holbrook Basin and is the logistical center for proposed exploration programs.
Potash occurrences in Arizona have been known for many years, but the recent increases in the price of potash and two recent publications have generated a strong acquisition interest for prospective properties (Open-File Report OFR-08-07, “Potash and related resources of the Holbrook basin, Arizona” by AZGS geologist Steve Rauzi (July 2008), and a summary of this report in the Arizona Geological Survey (“AZGS”) quarterly newsletter published September 18, 2008). The AZGS Open File Report 08-07 is based on analysis of drill hole logs and cores. The AGS released the first calculation of potash resources in the Holbrook basin (Link).
The Holbrook basin underlies 600 square miles, with the top of the potash situated from 213 to 610 metres below the ground surface; most of the potash mineralization is located at about 365 to 396 metres below surface. Maximum thickness of the potash is about 12.2 metres. Total volume estimates range from 5.68 to 6.45 cubic kilometers.
In the 1960s and 1970s, Arkla Exploration Company and Duval Corporation drilled more than 100 holes to delineate the potash in the Holbrook salt basin. Only five holes were drilled through the entire thickness of salt but 127 holes were drilled into the upper 30 to 91 metres of salt where potash is present. By early 1966, Arkla estimated a geological potential of more than 285 million tons averaging nearly 20% K2O underlying its lease block.
Passport has not prepared nor confirmed this resource estimation and as it pre-dates National Instrument 43-101, it does not comply with NI 43-101 requirements for mineral resource estimation. No qualified person has done sufficient work to classify the historical estimate as a current resource. Passport does not treat these numbers as a current resource on the property and the resource should not be relied upon, but remains an historic figure.
The historical data was the basis for the acquisition of prospective property acquired by Southwest and being optioned by Passport. The current State leases represented as the Holbrook Holdings being acquired by Passport from Southwest Exploration Ltd. closely approximate the historical leases held and explored by Arkla.
Passport plans an immediate detailed review of oil and gas wells and potash holes in the Holbrook Basin on the Holbrook Holdings. This review is expected to generate an exploration drill program to confirm, define and establish a 43-101 compliant potash resource.
Passport also announces it has retained the services of KCrew Communications Inc. (“KCrew”) of 1250 – 789 West Pender Street, Vancouver, BC to support its investor relations activities. The term of their contract is three months. In consideration of their services, Passport has agreed to pay KCrew a fee of $8,500 per month and grant options to purchase 100,000 shares at a price of $0.14 per share.
Both the acquisition from Southwest and the investor relations contract with KCrew remain subject to regulatory approval.