Pebble Creek applies for permits to explore potash on 6,000 square kilometers in Rajasthan, India

Pebble Creek applies for permits to explore potash on 6,000 square kilometers in Rajasthan, India

Pebble Creek Mining Ltd. is pleased to announce that the state government of Rajasthan, India has accepted the Company’s applications for Reconnaissance Permits in the Nagaur-Ganganagar Basin on July 25, 2008. The state government advises that the applications will be vetted in a timely manner. Potash applications do not require secondary approval by the central Indian government.

The basin is located in the desert of northwestern Rajasthan and occupies 100,000 square kilometers. Within the basin are nine smaller evaporite sub-basins. Evaporites are mineral salts that precipitated in brine pools as the seawater evaporated.

The Geological Survey of India (“GSI”) conducted geophysical studies and drilled 72 holes totalling 61,700 metres in the sub-basins from 1974 to 1991, and reported the results in Special Publication No. 62. The Company has reviewed GSI’s descriptive work, which is summarized below.

The basin contains clastic and carbonate formations dating from late Proterozoic through Cambrian ages, then Carboniferous through Jurassic, and finally Tertiary and Quaternary. In the middle of the stratigraphic sequence the Hanseran Evaporite Group has an aggregate thickness of 100 to 656 metres. The Hanseran contains seven cycles of halite (sodium chloride) formations at depths of 300 to 1,200 metres below the surface. It is considered “Eocambrian” age, or approximately 940 to 600 million years old.

The various halite cycles in the Nagaur-Ganganagar Basin range in thickness from several metres to 272 metres, generally thicker in the centres of the sub-basins. A cycle generally has a thick halite bed, with potash beds at or near the top. The cycles are numbered 1 to 7 upward from the base, and the highest grade potash is generally found near the tops of cycles 2, 3 and 5.

Potash is a general name for salts containing potassium. The most common in this series are polyhalite, sylvinite, sylvite, langbeinite and carnallite. At the Nagaur-Ganganagar Basin, polyhalite beds range from 5 cm to 27 metres in thickness and contain from 0.1 to 10.2% potassium. Sylvite beds range in thickness from 10 cm to 4.3 metres and contain from 0.2 to 22.75% potassium.

The Company’s Reconnaissance Permit applications are in three non-contiguous tracts of 2,000 square kilometers each, covering seven of the nine sub-basins (the Satipura, Bharusari, Lakhasar, Arjunsar, Jaitpura, Malkisar and Hanseran sub-basins). The Satipura, Bharusari and Lakhasar sub-basins were reported by GSI as having the highest grades and thickest deposits, with potash beds found mainly between depths of 505 and 750 metres. The sub-basins range in diameter from about 1,000 to 3,000 metres.

During the course of its research GSI estimated an historic mineral resource. Details can be found in GSI Special Publication No. 62, 2005, Kolkata, 700016, India. GSI provided a historic estimate of “probable” potash of 404 million tonnes containing 4.60% potassium, half of which is in Satipura and the remainder in Bharusari and Lakhasar. The historic estimate was based on a minimum bed thickness of 1.5 metres and a cutoff grade of 3% elemental potassium. GSI also provided a “possible” estimate of potash in all three aforementioned basins of 2,070 million tonnes containing 4.60% potassium. No mention was made of prospective mining methods or loss of material left behind as pillars.

The historic estimates were prepared prior to National Instrument 43-101 (NI 43-101) and were based on 72 drill holes covering an area of approximately 50,000 square kilometers in an uneven pattern, with some holes located 1 or 2 km apart and others scattered at greater distances. In addition GSI reported that some of the more soluble potash salts dissolved in the drilling fluids and the resultant grade estimates could be biased.

A qualified person has not done sufficient work to classify the historical estimates as current mineral resources. The Company is not treating the historical estimates as current mineral resources within the meaning of NI 43-101 and therefore, the historical estimates should not be relied upon.

Although Pebble Creek does not endorse the historical estimates, the studies conducted by GSI suggest that further exploration in the areas is warranted.

About India. India presently produces no potash. For several decades India was a socialist country that had little profit-oriented mineral exploration and mine development. Pebble Creek believes that India is the least explored of any country occupying a mineral-rich Precambrian shield.

India is purchasing potash under yearly contracts from other countries, including Canada, the world’s leading producer. A recent annual contract increased the price to the equivalent of US$530 per tonne FOB Vancouver.

India’s annual growth rate has been 9% in recent years and its potash imports are keeping pace. The Company believes the time is right to explore the Nagaur-Ganganagar Basin for commercially viable potash.

India has three levels of mineral tenure: Reconnaissance Permit (“RP”), Prospecting Licence (“PL”) and Mining Lease (“ML”). An RP is valid for three years and after two years it must be reduced to the lesser of 50% of the subject area or 1,000 square kilometers. The RP holder can drill up to 10 holes per 100 square kilometers of area.

The holder of an RP has preferential rights under existing law to obtain a PL on part of that area. A PL is generally limited to 25 square kilometers unless the applicant can substantiate that more area is needed for workmanlike exploration. The term of a PL with extensions is five years. Unlimited drilling and testing can be performed.

The holder of a PL has preferential rights to obtain an ML, which has a term of 20 or 30 years and can be extended in 20 increments. An ML is generally limited to 10 square kilometers unless, as above, the applicant can substantiate the need for a larger area.

India has been working towards a New Mining Policy for three years, which has now been cleared by the cabinet and is awaiting implementation by Parliament. Once the policy becomes law, the right to convert an RP or PL to the next higher level will become absolute instead of preferential, size limits of tenures will increase under certain conditions and other reforms in favor of the mining industry will take effect.

As reported widely in the world press, on July 22, 2008 the Congress Party’s coalition government won a no-confidence vote in Parliament and emerged in a stronger position to pursue its reform agenda. This bodes well for the mineral industry in India which many have considered to be over-regulated.

Andrew Nevin, P.Eng., President and Chief Executive Officer of the Company, is the qualified person under NI 43-101 who reviewed but has not verified the historic data contained in this news release. He did verify locations of ten drill holes in five of the sub-basins by finding the steel collar pipes cemented in the holes. Dr. Nevin has approved of this news release.

About Pebble Creek. The Company has been exploring in India since 1995 and has built up a technical and business infrastructure. The Company’s main project is the Askot massive sulphide deposit in Uttarakhand state; however it maintains an active pipeline of other projects in the exploration stages.

On behalf of the Board, Gyan C. Singhai, P.Eng.

Executive Chairman

For further information

Gyan Singhai, Executive Chairman, Telephone: (604) 696-6101
Mike Romanik, Investor Relations, Verenex Capital Corp., Telephone: (204) 724-0613

Source: Pebble Creek Mining Ltd.

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