The Lake Wells Potash Project consists of a substantial tenement package securing a significant area of palaeovalley and salt lake terrain in the northeast part of the Yilgarn Craton, Western Australia. Pit sampling, auger and air-core (AC) drilling has demonstrated the presence of consistent high-grade potash brine concentrations to significant depths both on and adjacent to salt lakes.
LOCATION AND TENURE
The Lake Wells Potash Project is located 180 km NNE of Laverton and consists of granted exploration licences including the 100% owned E 38/1903, E38/2113, E38/2114, E38/3021 and E38/3039, and E38/2742 & E38/2744 over which Australian Potash has the rights to all potash minerals. The project area covers over 500 km2.
The project area is serviced by the well maintained Great Central and Lake Wells roads, and sits approximately 180km north-east of Laverton.
The Lake Wells Project is located on the north-eastern margin of the Yilgarn Craton, Western Australia. Geoscience Australia (Mernagh et al, 2013. Record 2013/039) recognised Lake Wells as a high potential potash salt lake system with interpreted palaeovalley trends (Figure 1).
Quaternary and Cainozoic sediments form a well developed, extensive transported regolith profile associated with the Lake Wells playa lake system. The Lake Wells Potash Project area is almost entirely covered by Quaternary aeolian (sand dune) deposits, depositional sheet wash and playa lake deposits. Basement rocks include Archaean granitic rocks rich in potassic and calcic feldspar along with greenstone rocks including basalt, gabbro, felsic schists and chert-shale-BIF units.
Drilling has revealed a variable regolith horizon consisting of surficial or near surface evaporite and sand/silt, silcrete+/-laterite, common lake clays with some well sorted sand units and puggy lacustrine clays with minor sand/silt. Archaean basement rocks including transitional porphyry, granite, ultramafic and amphibolite types were logged at the end of some holes.
Figure 1: Lake Wells Potash Project, palaeovalley interpretation (after Geoscience Australia Record 2013/039)
EXPLORATION TO DATE
Reconnaissance pit sampling/historic drill-hole sampling for brine potash potential in the Lake Wells playa lake areas commenced in 2014 (GPH Quarterly report, September 2014, dated 29/10/2014). The 2014 results were encouraging with a best potassium (K) result of 5790 mg/l (5.79 kg/m3) and a calculated 12.09 kg/m3 Sulphate of Potash (SOP).
Further pit sampling was completed in early 2015 confirming the high grade nature of the hand dug salt lake pit samples with the Company’s best value recorded to date: Sample LGW041 – 16.41 kg/m3 SOP).
Previous brine potash explorers have targeted shallow brine resources on playa lake systems resulting in resources or resource targets extending over a very large surface area. Australian Potash considers the Lake Wells Potash Project to be unique in that it is the only Australian brine potash project with extensive historic1 and recent drill coverage over the central portion of the target area. Detailed logs from gold and base metal exploration work dating back to the 1990’s have recorded water inflow, water table data and lithological information which has been used to generate a first pass aquifer volume model (Table 1, Figure 3). Four wide spaced lines of AC drilling were used for the model with the upper surface fixed to top of water table or first damp/wet sample in hole and the lower surface fixed to Archaean/hard rock basement. This drilling data revealed an interpreted deep paleochannel in the central part of the project area (+140m deep). This historic Western Mining Corporation’s (WMC) drill data enabled Australian Potash to model the aquifer and calculate a volumetric estimate for the aquifer at over 1.6 billion m3.
1 Williams, RI, 1998. Sand Dune JV. Annual Report For the Period 22 November 1996 to 31 December 1997. WMC Ltd. a54285.
Table 1. Aquifer modelling
Potash Exploration Drill Program
An air-core and auger drilling program was completed and this work represented the first stage in generating a potash brine resource at the Lake Wells Potash Project (Figures 2 & 3, Table 2). The drill pattern is considered to be relatively close-spaced or ‘tight’ for a first pass brine drilling campaign but was designed as such to adequately test the following models:
The drilling program achieved the following:
Figure 2: Lake Wells Potash Project, drill and auger collar plan with pit sampling
Figure 3: Lake Wells Potash Project, aquifer model
Figure 4: Lake Wells Potash Project, cross section
*See GPH: ASX Announcement 26/08/2015 – Appendix 1 for all SOP analysis and Appendix 3 Data Aggregate method
Table 2. Lake Wells Potash Project Air-core Drilling – Significant Intercepts
A passive seismic survey across the project area in the later months of 2015 identified an extensive, deep palaeovalley system, with recorded depths to basement rock of up to 170 metres. The purpose of the seismic survey program commenced in 2015 and ongoing through 2016 was to identify the shape and potential depth of the palaeochannel running through the project area, with the deepest areas targetted with drilling in an attempt to identify the presence of the permeable basal sand layers.
Continued seismic surveying in the early months of 2016 identified the deep palaeochannel to extend into the neighbouring Lake Wells Exploration Pty Ltd tenure, over which Australian Potash had secured potash exploration and exploitation rights in late 2015. The palaeochannel was now estimated to extend over 20kms.
In March 2016, the Company released an exploration target* for the Lake Wells Potash Project, of between 6Mt and 37Mt of recoverable Sulphate of Potash at a grade range of 8,900mg/l to 13,900mg/l.
*The potential quantity and grade of the exploration target is conceptual in nature. At the time of release there had not been sufficient exploration to estimate a Mineral Resource and it was uncertain at that time if further exploration would result in the estimation of a Mineral Resource.
Substantial Basal Sand
In April 2016 the Company reported the results of 4 air-core holes drilled to basement. All 4 holes were drilled to depths of +163m and intersected basal sands at the bottom of the sedimentary sequence (at the bottom of the hole) of between 20m and 50m. The presence and width of the basal sands augered well for the project, as it is from this layer that the Company is proposing to abstract large volumes of the high-grade potash brines confirmed in the earlier drilling (Figure 5).
Figure 5: The presence of highly permeable basal sands augered well for the subsequent test-pumping program
Maiden SOP Mineral Resource Estimate
In June 2016, the Company released its Maiden SOP Mineral Resource Estimate:
18.4 million tonnes of SOP at 8.05 kg/m3 including
High-grade zone: 10.5 Mt of SOP at 9.03 kg/m3
The size and grade of the Inferred resource estimate gave strong encouragement to continue with the installation of test-production wells, or bores, with that program commencing in late July 2016.
Test-production Bore Program
Originally planned to include the installation of 4 test-production bores, the program was reduced to 3 on the completion of the air-lift development of the first 3 wells installed. The Company decided to expedite the test-pumping program, which is the second part of the Test-production bore program.
As part of the process of installing, or building, a bore, high pressure air is injected into the hole to clear debris from it. This process is referred to as air-lift development, as the debris is lifted out of the hole. This process is also a fair proxy for the subsequent test-pumping process that is the final stage in the building or development of a well.
Figure 6: Air-lift development rates on the test-production wells returned impressive results, with highest being 35l/s
The Company’s field hydro-geological team is now conducting a comprehensive test-pumping program on the installed test-production wells. It is anticipated that results from this program will be available in December 2016.
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The Laverton Downs Project is located 15 kilometres north of the Laverton township, and comprises two tenements, E38/2724 and E38/3014. The project area captures the gold prospective Admiral Hill Shear on the east side and the interpreted Lancefield Mine sequence on the west side (Lancefield Gold Mine current resource 596,000 oz gold – Source: www.focusminerals.com.au).
Preliminary studies of previous explorers’ reports show E38/2724 contains encouraging soil anomalies (up to 26 ppb Au) and historic shallow, gold-in-hole results (200-500 ppb Au range) with negligible follow up drill testing. Historic reports also revealed that a number of zinc-copper gossans were mapped on the project area and have been inadequately drill tested.
RAB drilling completed in two phases in November, 2013 and February, 2014 recorded significant and anomalous drill-hole gold intercepts. The best intercept recorded being 3m @ 10.17 g/t Au from 23m. In November 2014 the Company conducted a 760m RC drilling campaign across 8 holes at the Stinson Prospect. The best results recorded included 4m @ 1.99 g/t Au within a broader zone of 16m @ 0.57 g/t Au, 4m @ 1.00 g/t Au and 8m @ 0.21% Zn from 28m.
Outside of and away from the paleo-valley hosting the Lake Wells Potash Project, the tenements comprising the Great Central Project have been largely under explored. The Archaean geology is not well understood and in many places covered by sand deposits, discouraging past explorers. Studies carried out by the Geological Survey of WA in 2010 found that the Yamarna Belt was similar in age and characteristics to the Kalgoorlie Terrane greenstone rocks.
The Great Central Project forms the most extensive of the exploration properties and consists of a tenement package securing a significant area of deformed greenstone-granitoid in the northeast part of the Yilgarn Craton, Western Australia. The Project includes a range of geological settings and has immediate drill targets prospective for gold, nickel, platinum group elements (PGE), base metals and uranium. Complex structural setting and lithology, known shallow gold and base metal drill-hole anomalies, a paucity of effective, historic exploration work and only minor Permian and Proterozoic cover make the Great Central Project compelling.
LOCATION AND TENURE
The Great Central Project is located 160 km NNE of Laverton and occupies a portion of Lake Wells Station and Vacant Crown Land. The project consists of four granted exploration licences (E 38/2901 and E38/2505). The project covers 190km2.
The Lake Wells Project is located on the north-eastern margin of the Yilgarn Craton, Western Australia. Recent work by Pawley et al (2009) from the Geological Survey of Western Australia (GSWA) has suggested a regional-scale fault zone, the Yamarna Fault Zone (YFZ) is a Yilgarn Craton terrane boundary situated on the western margin of the Mount Gill Greenstone Belt. The YFZ resembles other regional terrane boundaries (such as the Laverton Shear Zone) in that it is a deep-rooted structure that divides two contrasting metamorphic terranes of contrasting ages. The GSWA has also completed recent mapping (Pawley, 2010) that suggests the Yamarna Terrain has rocks of similar age and character as the fertile Kalgoorlie Terrane.
Thin, highly strained and folded WNW-NNW trending Archaean greenstone belts have been recorded in subcrop observations, previous explorers’ drill-hole data and interpreted from regional and detailed aeromagnetics and gravity surveys. Two main greenstone belts have been recognised as the Ulrich Range Greenstone Belt in the northwest part and the Mount Gill Greenstone Belt in the central and south-east parts. Metamorphic grade of the greenstone rocks are greenschist to lower amphibolite facies. These greenstone belts consist of basalt, amphibolite, gabbro and felsic schists with chert-shale-BIF units. The greenstone belts are located within large areas of granitic rocks. Limited outcrop and drill data indicates the granitoid rocks consist of quartz-feldspar granite, adamellite, diorite and gneissic granite.
The Lake Wells Project area is almost entirely covered by Quaternary aeolian (sand dune) deposits, depositional sheet wash and playa lake deposits. Remnants of transported, pisolitic laterite have been observed within the sand dune terrain on the southern and central parts of the project. The sand dunes consist of fine to medium-grained, well-sorted quartz sand.
An E-W trending Archaean package dominated by mafic– ultramafic rocks and abundant porphyry-aplitic form low, resistant rises and small hills in the western part of the project. Massive E-W Proterozoic quartz reefs intrude the greenstone sequence in this area.
Significant historic exploration and mining has been completed over the Leonora area. The Leonora gold camp includes the Sons of Gwalia, Harbour Lights and Tower Hill mines with a cumulative gold production/resource of over 8 Moz. Other gold mines and prospects (Mertondale 1-5, Nambi) are located to the west and north of Leonora. Major base-metal deposits (Teutonic Bore, Jaguar) have been discovered to the north of Leonora.
Previous explorers’ data includes aeromagnetics and gravity surveys and RAB and RC drilling. Isolated reconnaissance RC drilling (max 250m deep angled holes) and wide-spaced (~200 m x 100m RAB/AC) drilling (Gunther, 2004) in the western part of the tenement (Figure 2) returned several anomalous gold zones in weathered, hematite-altered sandstone (Iron Tank Prospect). An historic RC hole (ITRC004) returned a shallow intercept of 28m @ 0.50 g/t Au from 17m, including 4m @ 1.00 g/t Au from 25m (Gunther, 2004). This gold intercept has not been followed up with systematic, shallow drill testing and remains open to the north and south and has not been adequately tested at depth.
Northwest of the Iron Tank Prospect lies the Crawfords gold prospect (held by Golden State Resources Ltd). Crawfords lies only 80 m from the Company’s tenement boundary and the Golden State Resources website (www.goldenstate.com.au/projects/ minerals) describes mineralised structures on the project area to be broad and intensely altered with zones of gold anomalism up to 150 m thick. The Crawfords prospect gold mineralisation appears to be associated with a sheared and strongly altered sandstone/conglomerate sequence. Intercepts including 13m @ 3.46 g/t Au from 40m have been recorded amongst other lower grade values. The along strike potential of the Crawfords Prospect onto the Company’s tenure has not been adequately tested and drilling program should target this trend and follow- up encouraging intercepts at the Company’s Iron Tank Prospect.
A previous explorer (Johnson’s Well Mining NL, Hansen, 1997) has recorded elevated palaeochannel drill-hole intersections within a range of lower values to the south of Mailman Hill and the western, Tertiary Age sediment covered part of the project is considered prospective for this style of mineralization.
Please note, where assay values for rock chip samples and drill intercepts are quoted they represent the best results from a series of lower grade values. They should not be taken to represent the average grade of the samples unless otherwise stated.
The Mailman Hill Project is a strategic ground holding of considerable area in a tightly held region well known for large- scale gold, base-metal and nickel mines. The project area is underexplored with partially concealed greenstone rocks, captures major structural features and interpreted splays and has strong gold and base-metals potential.
Given the geological setting and historic gold anomalism and encouraging results, the project is considered to be prospective for gold and base metal mineralisation and to be worthy of further exploration. There is a significant amount of previous exploration and much of that work was not exhaustive. The project is considered to be an advanced exploration project with immediate drill targets available.
PLANNED EXPLORATION AND BUDGET
A RAB/AC drill program should be devised to test gold targets. Further investigation is required to assess the base-metal potential (Teutonic Bore or Jaguar-style) of the faulted felsic volcanoclastic sequence dominating the eastern part of the project area.
The along trend potential of the Crawfords Prospect into the western section of the Leonora Project is significant and requires priority AC/RAB testing.
Preliminary exploration work completed has consisted of previous explorers’ compilation, field reconnaissance and targeting. AC/ RAB drilling is planned to test gold and base-metal targets. RC and diamond drilling will be planned following the evaluation of first pass AC/RAB drilling.
The budget will be spent on the granted tenements. The exploration budget will be subject to modification on an ongoing basis depending on the results obtained from exploration and development activities as they progress. It is also noted that proposed expenditure is sufficient to cover the minimum expenditure obligation for the Mailman tenements as specified by the Department of Mines and Petroleum of Western Australia.
It is considered that the Company has a reasonable proposed exploration budget over two years consistent with its stated objectives and that this program is warranted and justified on the basis of the exploration activity and demonstrated potential for discovery of gold and base metals mineralisation.
(100% Australian Potash Limited)
The Hack Well Project consists of a large exploration licence (E 38/2945) located 40 km south of Laverton. The project is located in the central part of the highly prospective Laverton Tectonic Zone (‘LTZ’) and in proximity to world class, multimillion ounce gold mines including Sunrise Dam and Granny Smith.
Australian Potash’s Hack Well project was formerly part of the Barnicoat project (held by Barrick PD Australia Limited) which included the Kerringal and Jubilee gold mines (Hack Well tenure envelops the Jubilee gold mining lease). The Keringal and Jubilee mines have previously produced over 0.5 Moz of gold.
The project captures favourable rocktypes (mafic-ultramafic types) and north and north north east trending structures which are interpreted to be closely associated to mineralisation at Keringal and Jubilee.
A review of historic drilling has revealed a number of significant gold intercepts including:
JBR427 – 4m @ 4.60 g/t Au from 36m
WDR041 -3m @ 1.15 g/t Au from 34m
JBR415 -4m @ 1.60 g/t Au from 48m
JBR230 -12m @ 0.50 g/t Au from 20m
The majority of the significant gold intercepts appear to remain open along trend and at depth.
Gold drill targeting is currently being finalised and a drill campaign is planned for the 2017 field season.
Figure 1. Hack Well Historic Drill Plan
Australian Potash Limited
31 Ord St
West Perth Western Australia 6005
PO Box 1941
West Perth Western Australia 6872
+61 8 9322 1003
Please direct all correspondence to:
c/- Mr Matt Shackleton
+61 (0)438 319 841