Red Moon Potash Announces Maiden Resource Estimate for the Captain Cook Halite (Salt) Project in Western Newfoundland
ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwired - Jan 14, 2016) - Red Moon Potash Inc. ("the Company" - "Red Moon") (TSX VENTURE:RMK) announces that it has received a National Instrument 43-101 maiden Mineral Resource Estimate on the Captain Cook Halite Project in western Newfoundland. The Resource Estimate was completed by APEX Geoscience Ltd. (APEX Report) and has an effective date of January 11th, 2016.
Resource Estimate Highlights
- Using a 95.0% lower base cut-off for sodium chloride, the Captain Cook Halite Resource Estimate is classified as "Inferred" and demonstrates that there is 908 million tonnes of high purity halite (96.9% salt) for 880 million in-situ tonnes of salt (Table 1);
- Additional analytical work was conducted as part of the estimation, the results of which help to define a thick section of high purity halite. For example, the best halite intersection, from drillhole CC-4, contains 96.8% NaCl over 335.3 m, which includes two large segments of high purity halite of 98.0% NaCl over 125.3 m and 97.5% NaCl over 177.3 m;
- The Technical Report summarizes: positive physical and chemical characteristics; salt composition and quality; market applicability; and infrastructure/transportation readiness, all of which support the conclusion that the Captain Cook halite deposit is a deposit of merit and warrants further delineation/evaluation work;
- The Captain Cook project area has access to important infrastructure including: two nearby deep water ports; airports at Stephenville and Deer Lake; the Trans-Canada highway; high voltage power grid; and an extensive road network including a well-maintained, all-weather gravel road connecting the deposit with the Turf Point Port, approximately 5.5 km from the deposit
Resource Estimate Overview
The Captain Cook deposit is classified as an Inferred Resource based on geological confidence, data quality and grade continuity. The most relevant factors used in the classification process were: drillhole number and spacing density; level of confidence in the geological interpretation; estimation parameters (i.e. continuity of halite); and number and nature of the existing sampling. The resource area is 3.73 km2.
Mineral resource modeling and estimation utilized a three-dimensional block model based on geostatistical applications and used inverse distance squared (ID2) estimation algorithms. Five drillholes, together with seismic data, were used to guide the geological interpretation of the resource area. Within the model, the thickness of the halite zone ranges from 68 m to 343 m, has an average thickness of 200 m to 250 m, and occurs at depths of between 183 m and 394 m.
To demonstrate that the halite has reasonable prospects of economic extraction, the mineral resource is reported at a lower base case cut-off of 95.0% NaCl. This is the general standard used in the purchase of road salt and follows the specification outlined in American Society for Testing and Materials (ASTM) Designation D632-12 (2012), which is applicable for sodium chloride intended for use as a de-icer and for road construction or maintenance purposes. Accordingly, with respect to reporting a resource estimate that abides by the General Guidelines of NI 43-101, the Red Moon halite test work results show that the Captain Cook halite deposit has good prospects of economic viability for an industrial mineral deposit.
Patrick Laracy, President, stated, "Given our successful drilling campaigns in the Captain Cook area we are very pleased that the maiden resource estimate supports our expectations of a high grade, large tonnage salt deposit. It vindicates the significant investment we have made in the Bay St. George area, particularly in the currently depressed equity markets for exploration ventures."
The APEX Report recommends a two phased budget of $2,326,500 for further definition drilling, geotechnical work, marketing analysis and environmental studies towards a pre-feasibility study. Based on the positive resource estimate the Company will continue to advance the project towards a feasibility stage including a market analysis for salt as a road de-icer in the northeastern seaboard area of North America. Internal research indicates that the United States is estimated to have imported approximately 18,000,000 tonnes of salt in 2014. Rock salt prices in the US for 2014 averaged USD$55 per tonne F.O.B. at the minesite. This represents a material increase in both imported tonnage and price since 2010 (Source: Salt, US Geological Survey, Mineral Commodity Summaries, January 2015). The marketing analysis work will continue while further drilling and related work will be subject to financing. The company is seeking partners to provide the financing to advance the project.
The APEX Report will be filed on Sedar. Interested parties can also access the report at www.redmoonpotash.com including contextual information, diagrams and maps. Patrick J. Laracy, P.Geo., President and Patrick Collins P.Geo. are qualified persons and have prepared, supervised and approved the scientific and technical contents of this news release as defined in National Instrument 43-101.
| NaCl lower cut-off (%) | Volume (m3) | Tonnes (million) | Density (kg/m3) | NaCl (%) | Tonnes in-situ (million) | |
| 88 | 682,000,000 | 1,473 | 2.16 | 95.3 | 1,405 | |
| 89 | 677,000,000 | 1,462 | 2.16 | 95.4 | 1,395 | |
| 90 | 672,000,000 | 1,451 | 2.16 | 95.4 | 1,385 | |
| 91 | 653,000,000 | 1,410 | 2.16 | 95.6 | 1,348 | |
| 92 | 602,000,000 | 1,301 | 2.16 | 95.9 | 1,248 | |
| 93 | 557,000,000 | 1,203 | 2.16 | 96.2 | 1,157 | |
| 94 | 499,000,000 | 1,078 | 2.16 | 96.5 | 1,040 | |
| 95 | 420,000,000 | 908 | 2.16 | 96.9 | 880 | |
| 96 | 304,000,000 | 657 | 2.16 | 97.4 | 640 | |
| 97 | 190,000,000 | 410 | 2.16 | 97.9 | 401 | |
| 98 | 71,000,000 | 154 | 2.16 | 98.6 | 152 | |
| 99 | 17,000,000 | 37 | 2.16 | 99.3 | 37 | |
| Note 1: | Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the mineral resource will be converted into a mineral reserve. | |||||
| Note 2: | The quantity of reported inferred resource in these estimations are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource, and it is uncertain if further exploration will result in upgrading them to an indicated or measured resource category. | |||||
| Note 3: | The estimate of mineral resources may be materially affected by geology, environment, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. | |||||
| Note 4: | Tonnes have been rounded to the nearest 1,000,000 (numbers may not add up due to rounding). | |||||
| Table 1. The Captain Cook Inferred Halite Mineral Resource estimate. The maiden inferred resource (highlighted) is reported as a total volume and tonnage using a nominal bulk density of 2.16 kg/m3 and a lower cut-off of 95.0% NaCl. The disposition of the deposit is also shown by iteratively estimating the tonnage at varying cut-offs. |
Red Moon is engaged in the exploration for salt and potash in western Newfoundland. Vulcan Minerals Inc. (TSX VENTURE:VUL) owns approximately 67% of the common shares of Red Moon and owns a 3% royalty on the project lands. The Company currently owns 922 mineral claims covering approximately 23,050 hectares of prospective lands for industrial minerals in the Bay St. George Sub-basin. The basin is of similar geology to the Sussex Sub-basin in New Brunswick where potash and salt are currently being mined.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors beyond the Company's control may affect the actual results achieved. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except by law, the Company undertakes no obligation to publicly update or revise forward-looking information.
Contact
Red Moon Potash Inc.
Patrick J. Laracy
President
(709) 754-3186
(709) 754-3946
info@redmoonpotash.com
www.redmoonpotash.com
