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Drilling program confirms thickness and grade for IC Potash ahead of feasibility study

Published: 18:11 27 Jun 2013 BST

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The results of IC Potash Corp.’s (TSE:ICP) phase 3 drill program have confirmed both the thickness and grades seen in previous drilling programs at the company’s Ochoa sulphate of potash project in New Mexico as well as substantiating the accessibility of the project’s ore, the Toronto-based explorer announced Thursday.

The drill program, conducted over 12 exploration core holes between early August of 2012 and late March of this year, has confirmed the thickness and grades of the mineral polyhalite, which contains four nutrients and is low in chlorine.

Core samples from the drilling program are being used in the pilot plant optimization work being conducted in connection with the definitive feasibility study (DFS) expected to be published during the third quarter. 

The rock core is also being used to confirm rock mechanics necessary for preparation of the detailed mine plan.

IC also intends to prepare an updated mineral resources and reserves estimate for the definitive study. 

With the completion of the phase 3 program, the company now has drilled, cored and analyzed 31 holes in the main resource area.  "The successful outcome of our phase 3 drill program has served to continue supporting the fact that our Ochoa Project is a long-life, high quality asset capable of producing premium quality SOP from polyhalite at significantly lower costs than other prevailing SOP production methods,” said ICP president and CEO Sidney Himmel.

“With our Feasibility Study on schedule to be completed during the third quarter, we look forward to sharing the detailed findings of the drill program, including a revised estimate of Ochoa's mineral resources and reserves."

The drilling results come a matter of weeks after the potash developer received a speculative buy rating and a bullish 12-month price target of $1.40 per share in its initial coverage from analyst Kiril Mugerman at Industrial Alliance Securities, well above the company's current trading price of 50 cents.

It is easy to ascertain the reasoning behind the bullish assessment – while for most producers, the expense of making a single tonne of SOP is around $560, IC Potash anticipates having the world’s lowest cost of production per tonne.

“We’re at the very bottom,” Himmel said at the recent Resource Exploration and Development Summit in Toronto of plans for a production cost of $162 per tonne at the company’s 100 per cent owned Ochoa property in southeast New Mexico. 

The company was trading up on the TSX Thursday, up as much as 2 cents in intraday trading to hit as high as 51 cents from a previous close of 49 cents.

 

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