open letter to management

Whilst management have done a great job at progressing the Paradox Basin Potash Project to its current stage of development, I feel that they need a gentle nudge to encourage them to change their focus from defining the extent of the potash beds, to confirming the thickest beds and highest grades of potash. As such, I have written an open letter to the management of Potash Minerals Limited (POK), to encourage them to choose locations that will have the highest probability of confirming those thickest beds of highest grade potash, based on the results from previous oil/gas drilling.

Please THUMBS UP this comment if you support the content of the open letter. If it receives enough support then the idea would be that we could email a link of this thread to management to communicate how shareholders feel about the best locations for the next couple of drill holes.




Dear Management,

As an investor in Potash Minerals Limited (POK), I am very excited about the future potential of the Paradox Basin Potash Project. I think that the fundamentals for this project remain strong, and I think that the company has done a great job at progressing the project to its current stage.

The state drilling has been very helpful to date, and has provided valuable information about how the graben affects the potash mineralisation (POK State Hole 1) and the extent of the potash beds to the East (POK State Hole 2). And although the results of POK State Hole 3 were not quite what many were hoping for, the results were still positive, as they showed good potash beds at very reasonable thicknesses and grades in Potash Beds 13 and 18 (Upper and Lower).

However, to date, the company has not yet managed to replicate the best results from previous oil/gas drilling, and it would be good to see the company target a couple of very specific drilling locations to confirm the presence of the thickest beds of potash at the highest grades, based on the results from previous oil/gas drilling. Investors expect the company to drill these thick high grade regions of potash, so that the company can use the results from their own drilling to confirm the results from previous oil/gas drilling.

A Potash Sector Report by Foster Stockbroking on the 21st of July, 2011, had the following to say about Potash Minerals Limited (POK) confirming the potash resource –

“... we expect TRH (POK) to re-rate on the back of confirming sylvinite bed grade, thickness and continuity. We view TRH (POK) as an emerging potash company to watch given confirmation of a resource will quickly lead to a mining scoping study and significant re-rating.”

The one location that seems to stand out as the absolute “epicenter” of the entire Paradox Basin Potash Project appears to be HUSKY FED 6-15, which returned the following results –
Potash 13: 2.74m @ 23.0% KCl
Potash 18U: [email protected]% KCl
Potash 18L: 5.2m @ 38.8% KCl
In regards to the selection of ideal locations to drill, confirming the results of HUSKY FED 6-15 should be seen as the first priority for the company. An ideal location that the company could drill is the far North Eastern corner of the State Block that contained POK State Hole 1. This location is a short distance West / North West of Husky Fed 6-15, and previous oil/gas drilling has shown that both Potash Beds 18 Upper and Lower appear to continue west of HUSKY FED 6-15. This interpretation is based on the results of HORSEHEAD UNIT 1, which shows thick beds of Potash 18 Upper and Lower, almost directly west of HUSKY FED 6-15).

Since the company already has permission to drill in the state blocks, the company could proceed with drilling in this location ASAP, whilst waiting for the permits to be granted that would allow drilling on federal land. The map that the company has provided (e.g. on page 3 of the announcement released to the ASX on the 02/02/2012) appears to show that drilling in the above mentioned location would be north of the graben. It is important that the company is certain that this location is north of the graben, as POK State Hole 1 has clearly demonstrated that drilling within the graben significantly reduces the potash bed thicknesses and grades.

Another location that could return solid results would be the state block to the west of the state block that contains POK State Hole 3. This state block is roughly half way between HUSKY FED 6-15 and GIBSON DOME-GOVT1. Both of these drill holes contained thick beds of Potash Bed 18 at good to high grades, as follows –
HUSKY FED 6-15 – Potash 18U: 4.9m@37% KCl and Potash 18L: [email protected]% KCl.
GIBSON DOME-GOVT1 – Potash 18U: [email protected]% and Potash 18L: 4.3m@21%.
Based on this, an interpretation could be made that drilling in this state block would have a higher chance of intersecting thick beds and high grades whilst waiting for permission to drill on federal land. If drilling in this location gave results that were somewhere between the results from the above two oil/gas wells, such news should be well received by the market. Although the state block west of POK State Hole 3 is good because it is in the middle of a region that contains good results – it is further from those results, so there is less certainty about the results that could be obtained by drilling in this location (compared to the first location that was suggested earlier).

If the company wishes to wait for approval to drill on federal land, then drilling could be considered north east of this state block (but south of the Graben) to try and achieve results that are closer to HUSKY FED 6-15. Alternatively, the company could drill west / south-west / south of this state block, to try and achieve results that are similar to GIBSON DOME-GOVT1, GIBSON DOME ST 1-2 and GIBSON DOME GD-1. However, drilling should not be conducted too far south, as whilst GIBSON DOME GD-1 contains good grades, it shows that bed thicknesses appear to reduce and Potash Bed 18 Lower disappears in the areas to the far south.

Of course, whilst there is no guarantee that the above suggested drilling locations will return good results, based on their proximity to, and the results of, previous oil/gas drilling sites (as detailed above), there is a much increased probability that the above suggested drilling locations will return thick potash beds at high grades.

Again, in regards to drilling, the far north eastern corner of the State Block that contained POK State Hole 1 should be seen as the first priority, as it is close to HUSKY FED 6-15, which, by far, returned the best results of any of the oil/gas wells in the entire Paradox Basin Potash Project. Drilling in this location, combined with obtaining the permits for federal land access, should give the company the best possible chance for a significant rise in its share price.

After the company has proven the presence of the thickest and highest grade beds of potash, the company can then drill in other locations to determine the extent of the potash beds in the under-explored areas.

Kind regards,

POK Investors




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Just to quote a few things that others have said (I hope they don't mind) in response to the suggestion of confirming the thickest, highest grade results from previous oil/gas drilling –

Donwijeratne – “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.”

Doogs - “A couple of points I will make, firstly,ABSOLUTELY agree they need to drill closer to drill holes already previously analysed to confirm grades and geography of the project.Forget finding the boundaries before confirming the epicentre.”

Guss_au – “concentrate on identifying the centre of the pay load and its depth etc, & working outwards from there makes sense to me, trying to take stabs in the dark in an attempt to indentify the extent of the deposit will IMHO only be playing russian roulette with the SP if the results come back ordinary as has been demonstrated with previous holes, to drill where we can be confident that the results will be good & work outward from there then we can consolidate shareholders confidence & attract prospective investers.”

Again, please THUMBS UP this comment if you agree with the content of the open letter.

I would also encourage those who support the content of the open letter to email a copy of it to the company to show their support. Management are probably more likely to act on the suggestions in the open letter if there is wide support from investors.



Email –
[email protected]
[email protected]
[email protected]

(The first address was from the website, the others from ASX announcements, am not sure which email address is correct / most appropriate, so please individually send a copy of the open letter to each email address to make sure that the email does get through. If there is a better / more appropriate email address to use, could someone please post a comment and add the appropriate details – thanks).





IMPORTANT – PLEASE READ - I want to place a great deal of emphasis on the fact that in drilling in the above locations there is NO GUARANTEE OF GOOD RESULTS, but rather that based on their proximity to, and the of results from, previous oil/gas drilling, an interpretation can be made that these locations have, IMHO, a higher probability of yielding good results.
I have done my best to CLEARLY EXPLAIN MY REASONING behind what I am saying. Please CAREFULLY LOOK AT THE MAP in the document that the company released to the ASX on the 02/02/2012 (page 3), LOOK AT THE RESULTS FROM PREVIOUS OIL/GAS DRILLING and identify the proposed drilling locations that I am referring to, and then look at THE PROXIMITY OF THESE LOCATIONS TO THE OIL/GAS WELLS THAT I AM REFERRING TO. Then you can MAKE UP YOUR OWN MIND, and decide whether or not you wish to support the content of this open letter
Never invest more than you can afford to lose, keeping in mind that with shares, the ultimate risk is that you could lose all of the money that you have invested.