Transit Holdings (ASX: TRH) has been granted approval from the U.S. state of Utah to commence a maiden drill campaign at the joint venture Paradox Basin Potash project.
The approval was received within two months of filing the application and drilling will begin in July or August, consisting of four exploratory wells to augment a database of historical drilling.
Importantly, the company’s focus is on sylvinite, a high grade form of potash ore that is cheaper and more effective to process to a saleable form than any other form of potash ore.
Transit expects to have a JORC Resource after drilling the four holes and the analysis of subsequent results.
The company and joint venture partner, K2O Utah LLC, are currently preparing the budget and initial drill campaign as part of the project’s Pre–Feasibility Study.
The drill campaign follows a Scoping Study completed by the joint venture based on two million tonnes per annum production of KCl (potassium oxide) from solution mining of the potash deposit. The study demonstrated the project has robust financials.
The exploration target at the project is 2.3 billion tonnes of sylvinite potash ore grading at 32.8% KCl.
The exploration target assumes a grade thickness cut-off of 20% K2O per metre (grade by thickness), below which mineralisation is excluded from the estimate.
The joint venture will begin working on approvals to drill on federal land to further delineate the resource.
Transit holds a 90% stake in the project with K2O Utah LLC holding the remaining interest.
The project covers applications for 386 square kilometres of prospective potash permits in the Paradox Basin in southeast Utah and, importantly, the project is in close proximity to infrastructure because of surrounding gas fields.
The identification of substantial subterranean aquifers and opportunities to capture seasonal snowmelt provides confidence in the availability of water for the project, to add to an impressive suite of infrastructure in the region.
Paradox Basin is strategically located close to key agricultural regions of the U.S. and as such is ideally situated to supply fertiliser manufacturers and agricultural cooperatives in the western and southwest regions of the country.
Currently 85% of potash requirements are imported into the U.S., highlighting the domestic demand for potash.
Given its proximity to key U.S. rail infrastructure leading to West Coast ports, the project also has substantial export potential.