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As for the potash potential at Wynyard, Phinney says, the bankable feasibility study was based on only 20% of the property package and the remaining 80% has yet to be explored. “The deposit is so enormous, the resource is unbelievable,” he says. “When I first saw the drill core four and a half years ago and saw the size of the intervals, I couldn’t believe it. And the crystals in the lower zone are three inches by three inches thick...when you see crystals three inches thick, you know this thing had a lot of time to grow.”
Phinney compares the seam width of forty metres to the height of a sixteen-storey office building, adding that it is all continuous, except for one relatively small salt seam. “And that’s only in our top two zones, the lower third zone is equally as big and we haven’t been given the full extent of it yet.”
The chief executive, an engineer who started his career in mining working on base metal purification at Vale Inco in Thomson, and held various engineering positions through fifteen years at Potash Corporation of Saskatchewan (POT-T, POT-N) before co-founding Whitemud Resources in 2003 and subsequently founding Karnalyte Resources, says the 40-metre interval demonstrates uniform assays, which “gives us a huge competitive advantage in the industry.”
Another reason why the project is exciting, he says, is that the ore body allows Karnalyte to “do things that the rest of the industry just can’t do, and that’s why our capex is so low.” For instance, the deposit, which starts from a vertical depth of about 960 metres, is covered by a thick rock cap (to a depth of between 800 and 960 metres). The thickness of the rock cap allows the company to carve out caverns of about 100 metres by 170 metres that be can used to extract the potash and also serve as areas to dispose of the salt, so there is no need for tailings ponds at surface.
As for infrastructure, Phinney says, it couldn’t get much better. The project is about half a kilometre south of Highway 16 near Wynyard, and is close to existing rail. “We get to use the entire industry’s infrastructure and it doesn’t cost us anything,” he enthuses. “This is the richest, highest grade potash deposit ever found on the planet...it’s the most amazing project I’ve ever seen in my life.”
At presstime Karnalyte Resources was trading at $7.00 per share within a 52-week range of $4.85-9.65 per share. The company has about 27.5 million shares outstanding.