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Potash West NL shareholders get priority in upcoming float

Potash West sold its interest in the South Harz project to Davenport during 2015 in exchange for Davenport shares.
Potash West NL shareholders get priority in upcoming float
PWN shareholders get priority in upcoming potash float

Potash West NL (ASX:PWN) shareholders will be able to apply for up to five million shares that have been set aside in the upcoming Davenport Resources Ltd (ASX:DAV) initial public offering.

Davenport will look to raise $6 million and be focusing on its South Harz potash project in Germany and high potential Southern Cross Bore iron-oxide copper gold project in the Northern Territory.

Potash West sold its interest in the South Harz project to Davenport during 2015 in exchange for Davenport shares.

Patrick McManus, managing director, commented: ““The listing of Davenport provides the funding to progress the South Harz potash project by drilling identified targets on the Küllstedt licence. 

“Planning is in progress for this and we look forward to results in 2017.”


South Harz potash project

The project is located in Thuringia, Central Germany and consists of 2 exploration licences, Küllstedt and Gräfentonna, in a region with significant potash production and exploration in the past.

There has been little exploration activity in the area in the last 30 years, but a review of the data derived from previous drilling at Küllstedt has allowed the reporting of an Exploration Target on the licence.

Twinning of some existing drill-holes could allow reporting of a maiden JORC compliant potash resource on Küllstedt relatively quickly.


Southern Cross Bore project

Davenport currently also holds the Southern Cross Bore project, which has good potential as an iron-oxide copper gold deposit.

Located just 75 kilometres from Alice Springs, the project comprises 600 square kilometres of exploration licences.

Some significant results have been recorded from drilling in 2012, including 24 metres at 4.19 g/t gold and 0.33% copper from 79 metres, and 34 metres at 3.83 g/t gold and 0.44% copper from 63 metres.


Proposed two-year expenditure plan

The proposed two-year expenditure program, pending completion of a A$6 million IPO, includes:

- $3.4 million: Evaluation and drilling at Küllstedt and Gräfentonna;
- $0.4 million: Southern Cross Bore target evaluation;
- $1.0 million: Administration;
- $0.9 million: Cost of offer and transactions; and
- $1.2 million: Working capital.


Indicative timetable

- 24 October: Replacement prospectus lodged with ASIC;
- 26 October: IPO opens;
- 25 November: Offer closes;
- 6 December: Allotment of shares; and
- 14 December: ASX listing and trading commences.


Investment drivers

- Projects located in Central Germany where world-class infrastructure networks exist and are being utilised by current potash producers to get product to key markets;
- History of sylvinite and carnallilite production on and around the exploration licences and over 100 years of regional production (100 million tonnes of potash prior to 1993);
- Well documented past exploration with historical potash drill intersections of up to 58 metres with grades of up to 18% potassium oxide of mineralisation in the south and up to 14% potassium oxide in the north;
- Extensive in-country expertise with a deep knowledge of mineralisation will enable rapid resource definition and growth building from extensive historical drilling records;
- Planning in progress for a drill program expected to commence early next calendar year to confirm historical results and allow estimation of a JORC Inferred Resource; and
- Retained Australian tenements at Southern Cross Bore with existing high grade copper-gold intersections in IOCG style mineralisation in the sought after Arunta region of Central Australia, ready for follow-up drilling.

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