Previously, I wrote about RWD's Strategy & Path to Success - see below or check that earlier post
RWD has the potential to become a billion dollar company - so let's have some patience, ourselves.
Here is my take of the recent announcement.
Reward Operations Report
GA IMO summary observations: 1: Carnarvon Basin, Potash Exploration RWD is working systematically at its drilling program ? be patient.
2: Lake Mackay, Potash Exploration Sounds quite promising.
3: Adavale Potash Prospect ? Queensland IMO, Adavale looks to be an exciting prospect for both potash (potasium chloride) and caustic soda (sodium hydroxide), the latter potentially worth several $100 millions with Comalco as the customer
4: Lake Disappointment Potash Project No new news
1: Carnarvon Basin, Potash Exploration The Company advanced its exploration programme aimed at discovery of buried Potash deposits in Australia akin to those in Canada, Europe and Russia which provide most of the world's Potash supply. The evaporite section cores from RWDK0902 were cut and submitted for analysis. Assays of the water soluble component of the evaporite sections of the core were received during the quarter. The assays for the evaporites within the section 1,133 - 1,461 metres indicate only anomalous potassium values (up to 800 ppm) and that evaporites in hole RWDK0902 were also primarily salt (Halite - Sodium Chloride)
GA summary observation - further drilling is to take place in the evaporite horizon, where it has a shallow dip to the west and thickens in a westerly direction toward the WA coastline. Assuming that evaporite deposition has proceeded to the Potash crystallisation stage and remained undisturbed, Potash minerals should be located at the low point of the evaporite basin possibly between the area drilled and the coastline. RWD is working systematically at its drilling program ? be patient.
2: Lake Mackay, Potash Exploration Lake MacKay is a modern, playa lake with a surface area of over 2,250km2. The Lake is situated in the Gibson Desert, straddling the Western Australia - Northern Territory border, 50 kilometres north of the Tropic of Capricorn. During the September quarter Reward Minerals Ltd completed the drilling of 24 shallow holes to test the lakebed sediments of Lake Mackay.During the December quarter core sample analysis was received which facilitated the compilation of an independent, JORC compliant, Inferred Resource estimate for its Lake MacKay potash project. The resource estimate was calculated on the basis of lakebed sediment volume (BCM) from surface to a
maximum of four metres depth and the potassium sulphate content of the sediments which lie within the ;Company's tenement holdings. The calculated resource is as follows: 4,780,400,000 BCM* at 4.3kg of K2SO4 (SOP) per BCM for a total of 20.56 Million Tonnes of K2SO4. *BCM - Bench Cubic Metres Drilling to date has been to a nominal depth of three metres, based on the assumption that Potash recovery from Lake Mackay would be from brine recovered from the lakebed via trenches with maximum depths of 2-3 metres. It is probable that additional potash resources lie below that tested but further infill and deeper drilling is required to assess this potential.
GA summary observation ? estimates of SOP (potassium sulphate) recovery are around 6.83 KG per cubic metre of brine, with ?vigorous brine flow? being encounted. The brine is undersaturated, but is in an area where the evasporation rate is 4 metres per annum, which shoulld not present a significant problem using established technology. Magnesium salts are also a positive. Further work will involve discussions with and the consent of the native title holderrs, the Kiwirrkurra people.
Sounds quite promising.
3: Adavale Potash Prospect ? Queensland During the September Quarter, the Company executed access agreements with holders of the two pastoral leases covering the Adavale prospect area and submitted clearance applications to the Queensland Department of Mines & Energy. Reward has sought Heritage clearance for two drill sites from the relevant Traditional Owners of the area. It is anticipated that the Company will be in receipt of the all the necessary regulatory approvals to allow commencement of drilling during the March quarter. A suitable drilling rig is being sourced to carry out the works. The Adavale prospect area is known to host very large salt deposits which in some areas contains significant potash values (Potassium Chloride - MOP). The project area is near the coal mining site of Blackall 600km inland from Gladstone. The Adavale deposits have potential to provide salt for the manufacture of caustic soda which is utilized in large quantities at the Gladstone Alumina operations of Comalco Ltd. Data available suggests that annual imports of caustic soda to Gladstone are of the order of 1.5 million tonnes at a cost in excess of $500 million.
GA summary observation ? IMO, Adavale looks to be an exciting prospect for both potash (potasium chloride) and caustic soda (sodium hydroxide), the latter potentially worth several $100 millions with Comalco as the customer
4: Lake Disappointment Potash Project GA summary observation ? an agreement was announced in 2008, but then, Reward and WDLAC were unable to settle on the terms of a formal agreement. It was ruled that Reward cannot proceed with the development without the agreement of the Martu Native Title Holders. This went to the Attourney General in 2009, but the AT would not overrule that ruling. Reward is considering its position and will advise shareholders in due course. In summary, no new news.
PREVIOUS POST - RWD's primary focus is potash (potassium carbonate, an alkaline fertiser). It complements MAK's rock phosphate (an acidic fertiliser).
Plants need both potassium and phosphorus, for healthy growth. Hence, their importance in maximising crop production in a growing, world with diminishing acreages of land for food production. I have some experience of these things from a previous life as a vigneron, someone who cultivates a vineyard.
So Lake Mackay, over 2,000 Km2 in the Gibson Dessert, is a key asset for potash.
Reward Minerals has lodged an application to the Department of Mines and Petroleum (WA) for Exploration Licence E70/3679 of 21 graticular blocks (59km2) covering Lake Dumbleyung in the South West Mineral Field of Western Australia. Both potash and lithium (5 kg per cubic metre of brine) has been found, but the lithium estimate needs to be properly confirmed. Currently, the lake has water in it and RWD are waiting for it to dry.
Adavale in Queensland has salt (sodium chloride) and potash. It is unknown whether it also contains lithium. It is proposed to supply caustic soda (sodium hydroxide) via the port of Gladstone.
They have surveyed a number of lake systems and intend to revisit the more promising prospects.
I asked about South Australia, which was covered by ancient seas, and presumably has ancient lake systems. Again, MC agreed, but said they had enough potash prospects and projects to focus on.
I compared RWD to RDR (gold, lithium and vanadium). RWD relies on low cost evaporation techniques to extract potash and - time - lithium. RDR is drilling rock.
BHP is likewise drilling potash in its Canadian tenements.
I guess it is all about what you have, how effective you can extract it, and how to maintain focus.
I came away from the conversation more sympathetic to RWD, and a little contrite about some of our critical posts (mea culpa).
There appear 2 key reasons for delays, the need to properly confirm exploration estimates, and dealing with native title issues.
MR was aware that the lack of reporting was frustrating to RWD shareholders - and he shares our frustrations, himself. He would like to announce game-changing progress, but those 2 reasons go a long way to explaining what appears to have been painful progress for RWD
RWD has the potential to become a billion dollar company - so let's have some patience, ourselves.
Investors be optimistic! Traders, well you choose your charts.
RWD Price at posting:
43.2¢ Sentiment: Buy Disclosure: Not Held
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