American Potash signs new Green River option with LiK
2023-04-17 10:01 ET - News Release
Mr. Jonathan George reports
AMERICAN POTASH SIGNS NEW OPTION AGREEMENT ON ITS GREEN RIVER POTASH AND LITHIUM PROJECT, PARADOX BASIN, UTAH
American Potash Corp. has entered into a new option agreement with LiK Resources LLC, a private Houston-based exploration company, on its Green River potash and lithium project, located in the Paradox basin in Utah.
The Option Agreement replaces the previous option agreement entered into by the Company and LiK on December 17, 2021. To earn a 70% interest in the Project, LiK must now:
- make cash payments of $150,000 (USD) (received).
- advance $3 million USD to the Company by April 28, 2023, to be used exclusively for permitting and drilling the first exploratory well under the supervision of a mutually agreed upon top-tier industry consultant.
- complete two separate Pre-Feasibility Studies; one for lithium and one for potash, evaluating a minimum of six mineral leases or claims within the Project by December 31, 2024.
- commission a valuation of the Project by an independent, mutually agreed upon third-party, to be delivered 90 days from the completion date of the Pre-Feasibility Studies; and
in the event LiK is a publicly traded company with a market capitalization of more than one hundred million dollars ($100 million USD), transfer one million dollars($1millionUSD) worth of its common shares to the Company within forty-five days of completion of the Pre-Feasibility Studies and valuation of the Project.
Following completion of the above requirements, LiK will be deemed to have earned a 70% interest in the Project. LiK may then elect to acquire the remaining 30% from the Company by making a cash payment based on the valuation, within 90 days of the date of its completion. If LiK does not elect to purchase the remaining 30%, the parties will then enter into a joint venture to further develop the Project.
The Option Agreement applies only to the Company's 11 State of Utah mineral leases and 128 Federal placer mining claims, and excludes areas subject to the Potash Permit Applications which are currently under final review by the BLM (Bureau of Land Management).
Upon receipt of the $3million USD advance referred to above, the Company intends to immediately commence discussions with select consultants to obtain quotes for managing, supervising and drilling the first exploratory well The first well which the parties have agreed to drill is referred to as Duma Point and is located approximately a half mile west of an historical oil and gas well which indicated a potash interval of 5.9 meters with a composite grade of 24% KCL from gamma-log data. Drilling is anticipated to begin within the next four months.
About the Green River Potash and Lithium Project
A NI 43-101 Technical Report by Agapito Associates Inc. states that the Green River Potash and Lithium Project hosts an Exploration Target estimated to contain 600 million to 1 billion tons of sylvinite grading between 19% to 29% KCL*.
This target was modelled utilizing gamma-log data from 33 historical oil and gas wells within and near the project area, and based on a specific stratigraphic horizon know as Cycle 5. This is one of the same horizons that Intrepid Potash Inc. (NYSE-IPI), America's largest potash company, produces from at their nearby Moab solution mine, providing strong evidence of stratigraphic continuity within this part of the Paradox Basin.
The Company holds a 100% interest in eleven State of Utah (SITLA) mineral and minerals salt leases covering over 7,000 acres, 128 Federal lithium brine placer claims covering 2,650 acres, and is in the final stages of the application process for 11 Federal (BLM) Potash Exploration permits comprised of approximately 25,000 acres.
Significantly, three of the State leases and a large area covered by the Federal (BLM) Potash Permit applications, lie within or border, an area designated for future potash and brine and processing, including energy efficient solar evaporation ponds.
Located only 20 miles northwest of Moab, Utah, the project has significant logistical advantages including close proximity to major rail hubs, airport, roads, water, towns and labour markets.
The U.S. imports more than 90% of its annual potash requirements, and domestic producers receive a higher sales price due to proximity to market; as of March 31st,2023, the muriate of potash price was quoted at $562.50 USD per tonne (fob Vancouver) - Intrepid Potash, America's largest potash producer, reported receiving an average realized price for potash of $713 USD per ton in 2022***.
Kent Ausburn, PhD, PG, a qualified person within the meaning of NI-43-101 and a director of the Company has reviewed and approved for the technical details of this release.
We seek Safe Harbor.