VANCOUVER — Little more than a month after closing an $11-million financing, Potash One (KCL-V, KCLOF-O)–which recently changed its name from ISX Resources — is going back to the market looking for another $14 million in funding for planned development of its Legacy potash project, in south-central Saskatchewan.
The aspiring potash miner plans to sell 3.5 million units (consisting of a share and half a warrant) at $4 apiece in the non-brokered private placement. Whole warrants will be exercisable at $4.75 for 15 months, but after a 4-month hold period, the company can move that up to a 30- day expiry if its shares close at or above $6 for 10 trading days.
Potash One has an option to acquire the Legacy project (previously called Findlater), a 394-sq.-km potash subsurface exploration permit in Saskatchewan. The project was previously explored by Imperial Oil Ltd. (now Exxon Mobil [XOM-N]) and Lumsden Potash Development.
An early 2007 technical study identified three main intervals at Legacy containing sylvinite (a mixture of potassium chloride and sodium chloride and the main ore in potash production) with potential economic interest: the Patience Lake, Belle Plaine and Esterhazy members.
An indicated resource of 36.8 million tonnes K2O was outlined, plus 360.4 million inferred tonnes K2O hosted in both the Patience Lake and Belle Plaine potential solution mining intervals.
The report also identified a further 4 million indicated tonnes and 31.1 million inferred tonnes K2O, if solution mining recovered the potash between the two main evaporite beds.
Grades within the evaporate beds generally range from 19-22% K2O.
The deposit consists mostly of flat-lying sedimentary deposits of interbedded halite, sylvite, carnallite, clay, and minor anhydrite and dolomite beds.
Legacy is located north of and adjacent to Mosaic Co.’s (MOS-N) Belle Plaine solution potash mine.
The solution mining process consists of injecting heated water into the sylvinite-bearing seams where it is dissolved and then brought to surface through extraction wells. The solution, or brine, is processed through a refinery to recover the potash.
Worldwide potash demand for use in the fertilizer industry has been strong, driven by increasing demand from developing countries –particularly China and India.
Shares of Potash One jumped 10% on the news, closing up 41 at $4.41 apiece.
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