Ann: PARADOX BASIN POTASH PROJECT UPDATE - STATE , page-26

re: Ann: PARADOX BASIN POTASH PROJECT UPDATE ... ab4825 – great analysis. I couldn’t agree more with what you are saying. Based on what I see from the drill results on the pictorial update of the various results to date, the best areas are Husky Fed 6-15 and Hatch Point 1. Both these have good thickness (~5 metres) and grade (~35% KCl). As you move east towards Threemile 43-18H, the grade still stays solid but the thickness reduces. This suggests to me we are moving away from the best part of Bed 18 Upper (which lies due north of the graben according to the historical drill results).

If we then turn to Federal Hatch 1, we again see a similar set of results as Threemile 43-18H. I think we are essentially seeing the best part of bed 18U directly north to north east of the graben extend up the left hand perimeter of the property.

If I were to nominate an area to drill I would want the 4th hole to be on the State Black due north of Hatch Point 1, so that we can see if the mineralisation maintains a grade in the low 30’s. This is about 2 miles north of Hatch Point 1 and management should select the south west corner of this state block so it can be as close as possible to the high grade of Husky Fed 6-15.

My advice to the company is drop the idea of identifying the boundaries of the Potash Resource but pick areas which would increase the confidence of the high grade zones, especially areas which can be drilled before Federal Approval is obtained. The area which ab4825 nominated is also a good one and as the grades of the bed 18 upper on the south west of the property (Gibson Dome Gov1, GD1, ST 1-2) all have bed 18 Upper grades of at least 30%. So there is no harm drilling the state block which is 5 miles due west of recently drilled state block 3 too.

The apple tree certainly has had a good shake over the last 2-3 days so it will be interesting to see how the stock performs on light/little news flow..

The next big news has to be the Federal Permitting license - if the POK are to be taken seriously the potash contained within the federal land needs to form part of this. If sentiment is to be improved we need an announcement of a 2 Bill plus number from Agapito.