The Lake Wells Potash Project

The Lake Wells Potash Project consists of a substantial tenement package securing a significant area of palaeovalley and salt lake terrain in the northeast part of the Yilgarn Craton, Western Australia. Pit sampling, auger and air-core (AC) drilling has demonstrated the presence of consistent high-grade potash brine concentrations to significant depths both on and adjacent to salt lakes.

LOCATION AND TENURE

The Lake Wells Potash Project is located 180 km NNE of Laverton and consists of granted exploration licences including the 100% owned E 38/1903, E38/2113, E38/2114, E38/3021 and E38/3039, and E38/2742 & E38/2744 over which Australian Potash has the rights to all potash minerals. The project area covers over 500 km2.

The project area is serviced by the well maintained Great Central and Lake Wells roads, and sits approximately 180km north-east of Laverton.

GEOLOGICAL SETTING

The Lake Wells Project is located on the north-eastern margin of the Yilgarn Craton, Western Australia. Geoscience Australia (Mernagh et al, 2013. Record 2013/039) recognised Lake Wells as a high potential potash salt lake system with interpreted palaeovalley trends (Figure 1).

Quaternary and Cainozoic sediments form a well developed, extensive transported regolith profile associated with the Lake Wells playa lake system. The Lake Wells Potash Project area is almost entirely covered by Quaternary aeolian (sand dune) deposits, depositional sheet wash and playa lake deposits. Basement rocks include Archaean granitic rocks rich in potassic and calcic feldspar along with greenstone rocks including basalt, gabbro, felsic schists and chert-shale-BIF units.

Drilling has revealed a variable regolith horizon consisting of surficial or near surface evaporite and sand/silt, silcrete+/-laterite, common lake clays with some well sorted sand units and puggy lacustrine clays with minor sand/silt. Archaean basement rocks including transitional porphyry, granite, ultramafic and amphibolite types were logged at the end of some holes.


Figure 1: Lake Wells Potash Project, palaeovalley interpretation (after Geoscience Australia Record 2013/039)

EXPLORATION TO DATE

2014

Reconnaissance pit sampling/historic drill-hole sampling for brine potash potential in the Lake Wells playa lake areas commenced in 2014 (GPH Quarterly report, September 2014, dated 29/10/2014). The 2014 results were encouraging with a best potassium (K) result of 5790 mg/l (5.79 kg/m3) and a calculated 12.09 kg/m3 Sulphate of Potash (SOP).

2015

Further pit sampling was completed in early 2015 confirming the high grade nature of the hand dug salt lake pit samples with the Company’s best value recorded to date: Sample LGW041 – 16.41 kg/m3 SOP).

Volumetric Model

Previous brine potash explorers have targeted shallow brine resources on playa lake systems resulting in resources or resource targets extending over a very large surface area. Australian Potash considers the Lake Wells Potash Project to be unique in that it is the only Australian brine potash project with extensive historic1 and recent drill coverage over the central portion of the target area. Detailed logs from gold and base metal exploration work dating back to the 1990’s have recorded water inflow, water table data and lithological information which has been used to generate a first pass aquifer volume model (Table 1, Figure 3). Four wide spaced lines of AC drilling were used for the model with the upper surface fixed to top of water table or first damp/wet sample in hole and the lower surface fixed to Archaean/hard rock basement. This drilling data revealed an interpreted deep paleochannel in the central part of the project area (+140m deep). This historic Western Mining Corporation’s (WMC) drill data enabled Australian Potash to model the aquifer and calculate a volumetric estimate for the aquifer at over 1.6 billion m3.

1 Williams, RI, 1998. Sand Dune JV. Annual Report For the Period 22 November 1996 to 31 December 1997. WMC Ltd. a54285.

Area (km2) Average thickness (m) Bulk volume (million m3) Porosity estimate Brine volume (million m3)
26 62 1,602 0.4 (upper) 641
0.33 (middle) 529
0.25 (lower) 400

Table 1. Aquifer modelling

Potash Exploration Drill Program

An air-core and auger drilling program was completed and this work represented the first stage in generating a potash brine resource at the Lake Wells Potash Project (Figures 2 & 3, Table 2). The drill pattern is considered to be relatively close-spaced or ‘tight’ for a first pass brine drilling campaign but was designed as such to adequately test the following models:

  • Presence and consistency of high-grade potash potential at significant depths in the deep regolith recognised at Lake Wells from previous explorers and recent Australian Potash drill coverage;
  • Evaluation of potash brine concentration beneath transported sand and dune areas adjacent to the salt lake margins. It has been generally considered that potash concentration decreases markedly within short distances from the salt lake surface. This observation was tested with over 50% of the drill holes completed over a 50-400m range from the salt lake surface.

The drilling program achieved the following:

  • Confirmed reconnaissance brine pit sampling at shallow depths and clearly demonstrated the existence of broad downhole widths of high-grade potash at a range of depths to +130m;
  • Holes completed on salt pans and on adjacent land and elevated sand-kopai dunes achieved good brine flows from varying depths;
  • Detailed logging in conjunction with previous lithological drill data provided a better understanding of regolith, palaeochannel form and weathered Archaean bedrock profile, and;
  • A sound foundation of drill, sample and analytical data to commence JORC2012 compliant inferred resource modelling work.


Figure 2: Lake Wells Potash Project, drill and auger collar plan with pit sampling

 


Figure 3: Lake Wells Potash Project, aquifer model

 


Figure 4: Lake Wells Potash Project, cross section

Hole Northing Easting RL Interval* Width SOP Hole Depth
  m m m From (m) To (m) m kg/m3 m
PLAC001 6984310 502503 447 0 89 89 12.28 89
PLAC002 6986265 503667 451 0 54 54 11.30 125
PLAC003 6987290 504936 448 3 27 24 10.26 27
PLAC004 6989581 502865 448 0 69 69 11.80 69
PLAC005 6988482 500271 449 0 30 30 12.34 30
PLAC007 6987185 502280 450 0 96 96 12.73 105
PLAC008 6988271 503135 448 0 62 62 10.62 62
PLAC009 6985447 502287 449 0 48 48 11.35 141
        93 96 3 9.86  
PLAC010 6984202 501394 446 0 30 30 13.30 31
PLAC011 6985628 500540 448 0 30 30 13.74 138
PLAC012 6987435 500480 446 0 27 27 13.62 27
PLAC013 6987782 499069 451 0 18 18 13.35 18
PLAC014 6985903 499000 446 0 63 63 12.23 84
PLAC015 6983905 503707 454 3 105 102 11.63 141
        117 141 24 10.66  
PLAC016 6983910 504600 448 0 42 42 12.36 107
PLAC017 6982990 501984 447 0 12 12 11.46 12

*See GPH: ASX Announcement 26/08/2015 – Appendix 1 for all SOP analysis and Appendix 3 Data Aggregate method

Table 2. Lake Wells Potash Project Air-core Drilling – Significant Intercepts

Seismic Survey

A passive seismic survey across the project area in the later months of 2015 identified an extensive, deep palaeovalley system, with recorded depths to basement rock of up to 170 metres. The purpose of the seismic survey program commenced in 2015 and ongoing through 2016 was to identify the shape and potential depth of the palaeochannel running through the project area, with the deepest areas targetted with drilling in an attempt to identify the presence of the permeable basal sand layers.

2016

Continued seismic surveying in the early months of 2016 identified the deep palaeochannel to extend into the neighbouring Lake Wells Exploration Pty Ltd tenure, over which Australian Potash had secured potash exploration and exploitation rights in late 2015. The palaeochannel was now estimated to extend over 20kms.

Exploration Target

In March 2016, the Company released an exploration target* for the Lake Wells Potash Project, of between 6Mt and 37Mt of recoverable Sulphate of Potash at a grade range of 8,900mg/l to 13,900mg/l.

*The potential quantity and grade of the exploration target is conceptual in nature. At the time of release there had not been sufficient exploration to estimate a Mineral Resource and it was uncertain at that time if further exploration would result in the estimation of a Mineral Resource.

Substantial Basal Sand

In April 2016 the Company reported the results of 4 air-core holes drilled to basement. All 4 holes were drilled to depths of +163m and intersected basal sands at the bottom of the sedimentary sequence (at the bottom of the hole) of between 20m and 50m. The presence and width of the basal sands augered well for the project, as it is from this layer that the Company is proposing to abstract large volumes of the high-grade potash brines confirmed in the earlier drilling (Figure 5).


Figure 5: The presence of highly permeable basal sands augered well for the subsequent test-pumping program

Maiden SOP Mineral Resource Estimate

In June 2016, the Company released its Maiden SOP Mineral Resource Estimate:

18.4 million tonnes of SOP at 8.05 kg/m3 including

High-grade zone: 10.5 Mt of SOP at 9.03 kg/m3

The size and grade of the Inferred resource estimate gave strong encouragement to continue with the installation of test-production wells, or bores, with that program commencing in late July 2016.

Test-production Bore Program

Originally planned to include the installation of 4 test-production bores, the program was reduced to 3 on the completion of the air-lift development of the first 3 wells installed. The Company decided to expedite the test-pumping program, which is the second part of the Test-production bore program.

Air-lift development

As part of the process of installing, or building, a bore, high pressure air is injected into the hole to clear debris from it. This process is referred to as air-lift development, as the debris is lifted out of the hole. This process is also a fair proxy for the subsequent test-pumping process that is the final stage in the building or development of a well.


Figure 6: Air-lift development rates on the test-production wells returned impressive results, with highest being 35l/s

Test-pumping program

The Company’s field hydro-geological team is now conducting a comprehensive test-pumping program on the installed test-production wells. It is anticipated that results from this program will be available in December 2016.

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