NGEx Resources kicks off potash drill program

NGEx Resources (NGQ-T) has begun drilling its Bada potash project, about 150 km southeast of Asmara, the capital of Eritrea, and about 30 km inland from the port of Mersa Fatma on the Red Sea.

NGEx plans to drill an initial six to eight shallow holes to test the potash potential of its 431-sq-km licence in Eritrea’s portion of Danakil Depression.

The Danakil Depression is an evaporite basin extending southward into Ethiopia, where exploration in the 1960s discovered the large Crescent and Musley potash and sylvite deposits.

NGEx’s drill program will test the margins of both sides of the basin for shallow (less than 100 metres) potash mineralization. The company says modeling of geophysical data suggests that the basin contains up to 1 km of sediments, which are thought to include thick evaporite sequences that host potash mineralization elsewhere in the basin.

The first drill results are due out in October.

“The Danakil Basin is emerging as potentially the most significant new potash play in the world,” NGEx’s president and chief executive, Wojtek Wodzicki said in a prepared statement announcing the drill campaign. “Elsewhere in the Basin, potash has been intersected at depths of less than 100 metres, which compares favorably with other well-known potash basins such as Saskatchewan where the potash beds lie at depths of approximately 1 kilometre.”

Wodzicki noted that the potential for shallow mineralization will “dramatically reduce exploration and development costs” and that the Bada licence’s close proximity to the Red Sea coast “would give any discovery significant logistical and cost advantages over any deposits on the Ethiopian side of the border.”

Wodzicki, a geologist by training, has worked in the mining industry since 1987 and has managed exploration programs on five continents. Before taking the helm of NGEx, he served as vice president of strategic partnerships for Lundin Mining (LUN-T) and as president and chief executive of Sanu Resources before it was acquired by Lukas Lundin-led Canadian Gold Hunter, which changed its name to NGEx Resources in 2009.  Before he joined Lundin, Wodzicki worked at Teck (TCK.B-T, TCK-N) and managed exploration offices in Bolivia, Peru, Chile and Argentina before finishing as general manager of exploration for North America, Europe, and Africa.

The Danakil Basin boasts several potash projects including the Colluli potash project of Western Australia’s South Boulder Mines (STB-A), 100 km south of the Red Sea port of Mersa Fatma and about 200 km southeast of Asmara.  

Allana Potash‘s (AAA-V, ALLRF-O) Dallol project in Ethiopia is about 100 km from the Red Sea coast and 600 km via road from the deep water port of Djibouti.

Dallol has measured and indicated resources of 673 million tonnes with an average grade of 18.65% potassium chloride (KCl) for 126 million tonnes contained KCl. Inferred resources add 596 million tonnes averaging 19.96% KCl for 119 million tonnes contained KCl.

Other companies working in the Danakil Basin include BHP Billiton (BHP-N) and Sainik, a coal mining company based in India, which is developing the Musley deposit. 

Allana’s concessions cover part of the previously defined Musley potash deposit, which lies on the edge of the 1,000-sq.-km evaporite basin along northern Ethiopia’s portion of the East African rift.