Potash One Inc. - Conventional Mining Assets

Potash Legacy Project Conventional Mining Assets Technical Reports Geology of Solution Mining of Potash in Saskatchewan Photos

In April 2009, Potash One added two subsurface mineral (potash) permit areas to its portfolio with the acquisition of Potash North Resource Corp. These permit areas include KP 416 and KP 417, which cover 185,000 acres of the Saskatchewan Potash Basin. The acquisition adds to Potash One's portfolio of potential potash resources. Although they are not solution mining amenable they could, following analysis, amount to additional potash resources.

The KP 416 and 417 permit areas lie in close proximity to the world's largest potash producing facilities. Approximately 20km NE is the operating Esterhazy underground mines (5.3Mt/annum capacity) and 45km North is Potash Corp.'s Rocanville Potash Mine (3Mt/annum capacity). The permit areas cover part of eastern Saskatchewan's Devonian-Age Prairie Evaporite Formation Sequence which hosts potash beds currently mined by nearby Rocanville, Mosaic K1, and Mosaic K2 potash Mines.

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Historical data suggests that the Esterhazy member is truncated along a northern portion of the permit area. The exact position of these lines of truncation are presently unknown, however drill-hole data indicates that there is significant area within the permit area that is underlain by the Esterhazy Member.

The Canberra Langenburg drill hole 16-29-22-30 W1M intersected the top of the Prairie Evaporite Formation at 776.5m drilled depth. Assay results taken from core cut in the Esterhazy Member show 3.3 meters from 791.2-794.5m at a weighted average grade of 21.5% K20 (34.1% KCl), 9.7% carnallite and 0.9% water insolubles. Four cored and assayed holes from the potash permit area that have commercial-grade potash intersections are available and have been inspected. These assays include:

Table 1. Length-Weighted Average Assay Results
Geologic Unit	Drill Hole	Depth Interval (m)	Thickness (m)	% K2O	% KCl	% Carnallite (KCl.MgCl2.6H2O)	% Water Insolubles
Belle Plaine Member	DH12 Southwest Potash Corp.	820.5-822.3	1.8	25.8	40.8	0.3	2.1
Belle Plaine Member	DH14 Southwest Potash Corp.	833.0-836.4	3.4	18.3	29.0	3.8	4.6
Esterhazy Member	DH01 Langenburg	791.2-794.5	3.3	21.5	34.1	9.7	0.9
	DH03 Langenburg	837.6-841.2	3.6	21.6	34.1	11.8	0.7
	DH14 Southwest Potash Corp.	857.6-873.3	15.7	9.2	14.5	8.9	1.0

Disclaimer: The drilling information was not collected under current 43-101 reporting standards. This drilling information cannot be verified by the company and therefore should not be relied upon. This historical drill data is reported for information purposes only. Currently there are measured, indicated or inferred resources. Readers are cautioned that the presence of the potash rich horizon in the historic drill data does not guarantee economic quantities of potash are present.

The results on the KP 416 and 417 permit areas from historical drilling are very encouraging. Follow up exploration will allow Potash One to further evaluate the historic drill intercepts and extent of the potential potash mineralization on the permit areas. The permit areas are in close proximity to existing rail, road, and electricity grids, which are expected to facilitate any potential future development.

The Saskatchewan Potash Basin contains deposits that are renowned for their consistency and continuity. The guidelines prepared by the Estimation Best Practices Committee of the Canadian Institute of Mining and Metallurgy and Petroleum ("CIM") 2003, state:

"The potash deposits that are located in Saskatchewan, Canada, are characterized by their remarkable consistency of grade and thickness over many tens of kilometers. It is therefore possible to characterize a deposit with relatively few drill holes, supplemented by sufficient seismic coverage to establish continuity between the holes. There are however local disruptions of the deposit, either structural or mineralogical, which may preclude potash mining. The MRMR [Mineral Resources & Mineral Reserves] problem for potash is almost the inverse of that for other mining operations in that much of the exploration effort is directed at defining the location and size of the non-mineable areas within an otherwise continuous resource."

Work Program

A Technical Report compliant with NI 43-101 standards was prepared by Dr. Michael Hardy of Agapito Associates Inc. and Steve Halabura of North Rim Exploration in June 2008. The NI 43-101 findings suggest that in order to estimate the potash potential of the KP 416 and KP 417 permit areas, the following contingent three-phase exploration and definition program is recommended:

Phase I

Design & implement an extensive 2D seismic survey of the permit areas (Completed)

Phase II

Drill 2-5 core holes to intersect and sample the potash Members. Location to be selected after 2D seismic survey is completed and interpreted. (Estimated Cost: $2-5 million)
Complete a Preliminary Assessment -- a geological model, mine plan, process plan, marketing plan, preliminary capital and operating costs (Estimated Cost: $500,000)

Phase III

Complete a 3D seismic survey in the areas of highest potential for commercial mining (Estimated Cost: $3 million)
Drill additional holes as necessary to confirm the extent of potash and provide the preliminary input for shaft design and groundwater control (Estimated Cost: $3-$6 million)
Complete a Preliminary Feasibility Study to establish project costs and define reserves (Estimated Cost: $3 million) For a more information on the program specifics, please refer to the project's NI 43-101 Report.

For a more information on the program specifics, please refer to the project's NI 43-101 Report.

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