Transcription of Finance News Network interview with Potash West (ASX:PWN) managing director, Patrick McManusRebecca Richardson: Hello, Rebecca Richardson for the Finance News Network. Joining me for an update from Potash West Limited
(ASX:PWN) is managing director, Patrick McManus. Patrick welcome to FNN. You are one of the few listed Australian companies developing a potash project. Can you give us an introduction?
Patrick McManus: Yes thank you. Potash West listed in May this year so it’s a very young company. The projects started about 18 months before that and a group of people have been developing that. We raised $6 million in the IPO and basically started our exploration programs and process development projects since then. And we are just starting to get our major drilling programmes underway, which will start next month. And in parallel we’re doing processing development work to extract the potassium from the glauconite material that we’re actually looking for.
Rebecca Richardson: Thanks, so what’s your share price and market cap?
Patrick McManus: When I looked last it was about 20 cents share price and we’ve got about 75 million shares on issue, so the market cap’s about $15 million.
Rebecca Richardson: Thanks Patrick. So can you briefly tell us about the Dandaragan Trough and its mineralisation?
Patrick McManus: Yes, the Dandaragan Trough is an area that was a shallow sea back about 60 million years ago when this glauconite deposited. Potassium in the ground water came off the Australian coast. As it settled into the shallow sea, the potassium precipitated with iron to make an iron potassium silicate, which is the glauconite. At the same time quartz was being eroded off and the two minerals settled together down to the bottom of the sea and produced greensand, which is a mixture of quartz and glauconite. That Dandaragan Trough is about 3,200 square kilometres of ground. We’ve got about 2,900 of it and are under exploration licenses ourselves. So we’ve got the majority of that basin and from that’s been done in the past, there’s a large amount of greensands present in most of the basin. Don’t know how much glauconite is in there yet or potassium contents, but there’s a lot of it there.
Rebecca Richardson: And do you own 100 per cent of the project?
Patrick McManus: Yes. When we floated, our asset was the potash and phosphate rights to tenements held by two companies, Image Resources and Elsinore Energy. That was 2,100 square kilometres of ground and subsequently we’ve taken another 800 square kilometres in our own name, and we’ve got 100 per cent of the mineral rights for that ground.
Rebecca Richardson: Thanks Patrick now to drilling, you recently completed an aircore drilling program on the western edge of the Trough. What did you discover about the size and depth of the deposit?
Patrick McManus: That drilling program was very encouraging in that the drilling we did indicated quite substantial thicknesses of potassium bearing material, up to about 30 metres in several of the holes which because it was right on the western edge, we weren’t expecting such thick sequences. So that’s encouraged us that as we get further into the centre of the Trough, the Poison Hill and the Molecap greensand sequences will be much thicker and we could get thicknesses of up to 50-80 metres, which would be made for very easy mining and a very small foot print.
Rebecca Richardson: Thanks Patrick. So what’s planned for the rest of the year and early into next year?
Patrick McManus: We have another drilling programme starting in November and that’s being guided by some very detailed mapping that we’ve done in the last six months. And in parallel to that there’ll be further process development work on the chemical extraction of the potassium from the glauconite. We’ve announced some results to that recently and there’s been some success there, so expect to build on that and continue that work.
Rebecca Richardson: Now to corporate matters Patrick, you have a considerable amount of drilling ahead to prove the resource. Are you funded for 2012?
Patrick McManus: Yes we raised as I mentioned, $6 million in the IPO and the work plan for that $6 million is to take the project to a scoping study that we expect to complete in December 2012. We’ve got $4.5 million of that left. The work through to 2012 will take us to a JORC resource on about 70 million tonnes. But given what we know of the size of the basin we think the source will be much larger, very much larger. But we would also understand the extraction costs much better which provided they prove to be economic, we will then go on and look at a much larger project based on exporting the product out of probably Geraldton or Coonana.
Rebecca Richardson: Last question. Where would you like to see the Company 12 months from now?
Patrick McManus: By about this time next year we will be, I hope, completing the scoping study that shows an operation based on that glauconite as a feed stock. We will be able to produce the potash at a much lower cost than the farming communities in WA are currently paying for material that comes all the way from the northern hemisphere. There’s the great logistics advantage that we could have by producing here in WA.
Rebecca Richardson: Patrick McManus thanks for the introduction.
Patrick McManus: Thanks Rebecca thanks for your time.
ENDS
