IC Potash has established substantial mineral reserves that will support a long-life and low cost mining operation. The total mineral reserves are over 400 million tons, with a continuous thickness, constant grade, and low dip. These reserves represent upwards of a 100 year mine life, which represents the scalability and economic potential of the Ochoa Project.
The mineral deposit occurs at depths of 975 to 1,600 feet within the project area, and is considered to be minable using conventional room and pillar mining methods with continuous miners and other underground mining equipment. The mining method is common to the New Mexico potash mining district.
The mineral reserves for the Ochoa project have been verified by Gustavson Associates, LLC of Lakewood, Colorado, and have been prepared in compliance with National Instrument 43-101 Standards.
The Ochoa Project Mineral Reserves Tabulation
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Reserves Within 40 Year Mine Plan
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|
|
Total Ore Tons |
Recovery Factor |
Recovered Ore Tons
|
Polyhalite Grade
|
| Proven |
76,950,000
|
84.29%
|
64,861,000
|
80.14%
|
|
Probable
|
93,632,000
|
79.69%
|
74,613,000
|
78.78%
|
| Total Proven & Probable |
170,582,000
|
81.76%
|
139,474,000
|
79.39%
|
|
Remaining Reserves Within Proposed Mine Plan
|
||||
| Proven |
115,709,000
|
84.62%
|
97,911,000
|
76.51%
|
| Probable |
128,163,000
|
83.44%
|
106,935,000
|
75.33%
|
| Total Proven & Probable |
243,872,000
|
84.00%
|
204,846,000
|
75.89%
|
|
Total Proven and Probable Reserves Within Entire Proposed Mine Plan
|
||||
|
|
414,454,000
|
83.08%
|
344,320,000
|
77.33%
|
Exploration Methodology
The exploration work completed at the Ochoa Project includes six widely distributed drill holes (Phase I), seven in-fill drill holes (Phase II), and seven additional in-fill drill holes (Phase IIB). Other exploration work includes the studying of approximately 1,000-mi2 area in order to identify major geologic features and determine the basic distribution of lithologic units, including polyhalite mineralization. This work relied on published reports and was supplemented with petroleum data records and well logs obtained from public and commercial sources. ICP also acquired 812 geophysical borehole logs from various exploration sources. Wireline log readings from these boreholes have been used to interpret subsurface lithology.
The IC Potash core holes were used to anchor correlation efforts to all control points generated by geophysical logs. The thickness of polyhalite from core analysis was tied to the wireline log signatures and correlations were made working outward from IC Potash core holes. Correlation confidence is extremely high between all well controls for all formations and markers, as well as for the top and base of the polyhalite bed. Informal makers also exhibited high correlation confidence and provided additional constraint on the volume within which the polyhalite bed occurs.
Regional Geology
The Area of Interest ("AOI") lies at the northeastern margin of the Delaware Basin. The Delaware Basin and neighbouring Midland Basin to the east are structural sub-basins of the large Permian Basin that dominated 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 remainder of the Salado Formation sediments was 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 of that 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 ICP's Ochoa Project is the polyhalite within the Rustler Formation. The Rustler Formation disconformably overlies the Salado Formation.
The occurrence of polyhalite in the AOI was inferred by IC Potash by analyzing 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 IC Potash confirmed the mineralogy to be polyhalite.
Location of Delaware Sub-Basin
