Geological Overview.

A key component in the ability to develop a cost-effective and lucrative mining operation is the quality of the deposit. The Ochoa project’s high-grade polyhalite deposit is accessible, has sub-horizontal and conformable bedding, and consistent mineral and chemical compositions throughout.

The Area of Interest (AOI) lies at the northeastern margin of the Delaware Basin. The Delaware Basin and neighboring Midland Basin to the east are structural sub-basins of the large Permian Basin that dominate the region of southeast New Mexico, western Texas, and northern Mexico. The AOI has limited bedrock exposures and surface conditions are dominated by windblown sand dunes, caliche, and poorly developed soil horizon. Extensive and thick evaporite deposits occur throughout the Late Permian (Ochoan) age rocks of the Delaware Basin. These evaporites occur between the Capitan Reef limestone of the underlying Guadalupe Series and the fine clastic sediments of the Triassic Dewey Lake red beds.

The Ochoan Series consists of the Castile, Salado, Rustler, and Dewey Lake Formations in the northeastern Delaware Basin. The oldest evaporite cycle of the Ochoa Series is known as the Castile Formation. The Castile consists of anhydrite and halite within the Delaware Basin. The overlying Salado Formation is structurally and lithologically complex and, in addition to the cyclic anhydrite, halite, and clay sedimentation, it is also host to the McNutt potash zone. Potassium bearing salts accumulated in the northeastern Delaware Basin. With later subsidence, the remaining Salado Formation sediments were deposited, followed by anhydrite, interbedded polyhalite, halite, and dolomite of the Rustler Formation and the Dewey Lake Formation continental red beds. Collectively, the Castile, Salado and Rustler evaporite-bearing formations are over 4,000 feet thick.

Rocks of the Ochoa Series underlie an area of about 400,000 square miles. Potash salts are found throughout the southern half of the area. Potash in the Salado Formation occurs as interbeds within both the anhydrite and halite units of the cyclic units. In the former, it occurs in the form of polyhalite and in the latter as sylvite, langbeinite, or carnallite. The Salado Formation in the northern Delaware Basin is divided into three units of which the middle zone, known as the McNutt potash zone, varies in thickness between 120 feet in the northwest part of the Delaware Basin to over 590 feet in the eastern part of the basin. Within the McNutt zone, there are 11 distinct potash cycles of which five have been commercially developed in the Carlsbad area.

The target horizon of the Ochoa mine is polyhalite within the Rustler Formation. The Rustler Formation disconformably overlies the Salado Formation. The occurrence of polyhalite in the AOI was inferred by ICP through analysis of geophysical logs of oil and gas wells. Elevated gamma ray readings were observed in the Tamarisk member of the Rustler Formation at a depth between 1,200 and 2,000 feet. Subsequent core drilling by ICP confirmed the mineralogy to be polyhalite. read more +