Confederation Minerals owns 15.5% of Magna Resources Ltd. whose principle project is The Green River Potash Project. This is located near Moab in southeast Utah and consists of 31 potash prospecting permit applications totaling 25,593 hectares (63,242 acres) and leases of 9 state sections for a total of 2,446 hectares (6,043 acres). It is within the limits of the Paradox Basin, a southeast-trending geological feature extending across southeast Utah and southwest Colorado, with dimensions of roughly 160 km by 50 km. This sedimentary basin has been the focus of oil and gas exploration since the mid-1950's and has supported potash extraction from the Cane Creek mine since 1964. Cane Creek utilizes low-cost, energy-efficient solution mining and solar evaporation potash recovery. A very arid climate, with 360+ days of sunshine per year, provides ideal conditions for these methods, and American Potash LLC could therefore potentially use the same mining technology as Cane Creek.
The Paradox Basin was formed during Pennsylvanian age subsidence and over the span of approximately 4 million years was filled with 1500-1800 m (5000-6000 ft) of cyclical evaporite sequences. In total, over 29 evaporite sequences accumulated in the Paradox Basin; all terminated with the deposition of halite, and 17 of these contain sylvite and other potash minerals.
The target salt cycles beneath American Potash's area of interest are Cycles 5 and 13, the latter being the thickest and potentially highest-grading, structurally-unthickened layer of the potash-bearing salt cycles in the Paradox Basin. The project area is centered on the postulated thickest part of the Cycle 13 accumulation in the northwest corner of the basin, possibly due to deposition here along some local structural depression.
Logs and reports for 38 historic oil and gas exploration wells drilled on the subject permit applications have been reviewed for indications of potash and indicate that in the property area Cycles 5, 13 and 18 contain significant concentrations of potash. The Cycle 5 potash horizon is currently being solution mined by Intrepid Potash at the Cane Creek mine. In the Green River property area, it ranges from 3.7-5.5 m (12-18 ft) in thickness, and, based on gamma ray logs, grades vary approximately between 15 and 25% K2O.
Cycle 13 has three distinct consecutive potash-bearing horizons with a cumulative thickness of 44-55 m (143-180 ft), which is thickening to the northwest. This Cycle 13 potash sequence can be traced across at least 14 km of the permit applications and is very probably continuous throughout. The upper potash-bearing horizon ranges in thickness from 14.6 m (48 ft) in the southeast to 21.3 m (70 ft) in the northwest and grades an estimated 4-7% K2O. The middle Cycle 13 potash horizon ranges from 4-4.6 m (13-15 ft) thick, with an apparent consistent grade of approximately 15% K2O. There is also a lower potash member, which ranges in thickness from 21.9-27.4 m (72-90 ft) but at lower grades, with an estimated K2O content of 1-2%. The middle horizon has the best potential of the 3 horizons of supporting a viable solution mining operation, due to its higher grades.
Cycle 13 also appears to be essentially flat-lying and undeformed beneath the property area, as illustrated by gamma and neutron log correlation along NW-SE section. This is critical, as it potentially reduces future exploration, development and mining complications that can exist with structurally deformed stratigraphy due to folding, faulting and associated salt diapir (salt dome) effects.
Preliminary interpretation of the historic oil and gas well log data also suggests several other potentially economic potash-bearing salt cycles occur within the area of interest above Cycle 13 (Cycles 5, 6 and 9) and below it (Cycles 16 and 18). One or all of these other cycles could potentially represent significant additional potash resource.
Most areas of the property have good road access via state, county and off-track (dirt) roads and probable access to ample water supply from nearby Green River. It is an arid area with low suitability for other uses such as farming, ranching, recreation etc, and is out of sight of any of the National Parks in Southern Utah. Interstate Highway 70 (I-70) runs east-west (from Denver to Salt Lake City) within a few miles north of the property, and a major power line corridor occurs nearby.
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