Canadian explorer Grizzly Discoveries (CVE:GZD) (OTCQX:GZDIF) saw its shares soar on Monday after the company announced that exploration work is underway at its Alberta potash project.
"We are aggressively pursuing the development of this project given our belief that agricultural products and foodstuffs could experience significant inflation over the next several years," said president and CEO Brian Testo.
Grizzly currently owns 100% of 1.88 million acres in two major potash-prospective Alberta blocks, with the North block centred about the towns of Lloydminster and Provost, and the South block located northeast of Medicine Hat.
The company also holds a 50% interest in an additional 458,000 acres of 21 metallic and industrial mineral permits in Provost, along the Alberta-Saskatchewan border.
This means that Grizzly's total land holdings for potash stand at more than 2.34 million acres.
Starting over the next month, the company will acquire seismic data on the properties, which will then be followed by a drilling program to identify target potash areas. The first stage of drilling is planned for September or October, the company said.
According to Grizzly, a number of its permits are located in close proximity to a reported occurrence of potash minerals in a deep well, named VCO #15, in the Vermilion area of east-central Alberta. Based on govermnet data, recent analytical work on what is left of the drill core from VCO #15 yielded potassium oxide (K2O) grades of up to 18.6%.
Once areas that are considered most prospective for potash are identified, the company intends to pursue stage two resource-type drilling, which is anticipated to begin in 2012.
"This economic environment, combined with the immense size of the project and indications of historic potash mineralization at depths favorable for solution mining, bode very well for the future results of our exploration," added Testo.
Grizzly shares surged more than 27% on Monday to trade at $0.70 as of 1:07pm EST.