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Editorial | Feb 8, 2023 | Industry
That includes the bidding war for an Argentina-based lithium project, which was acquired by another company for $491 million. 1,2
Now, they’ve just revealed a new high-potential target, with an exploration program that is fully funded and underway.
Anyone who knew anything about mining, saw this huge win coming from a mile away. But they kept the secret to themselves.
What they saw was that Graham Harris and Farhad Abasov were sitting on massive potential in the vast high plains of Argentina with an innovative company, It was a lithium project that had languished.
But if you’ve been following the lithium sector, you know it turned into a headline maker.
Because, in 20 months, by late 2021, the duo turned the project into a bidding war.
One that eventually amounted to a $491 million acquisition.
Now Abasov and Harris have moved on to a new project. And as you can imagine, it’s one that merits immediate attention.
That’s because the team is focused on a critical mineral that is currently facing a massive supply crunch… a mineral for which there is no substitute.3
This team’s newest endeavor has not produced a reserve estimate yet, but historic exploration points to high concentrations of potash mineralization on site.
Like the company before it, it’s a project with massive potential that fell by the wayside. This time because of a dip in potash prices back in 2017.
But now that potash has spent the almost a year selling at the near record price of $562.50 a ton, this precious mineral is coming back into focus.4
Located in the mining-friendly country of Gabon, the project is already at an advanced stage of exploration.
- The targets are defined…
- The equipment is ready to get started…
- And exploration is fully funded.
That means it could only be a matter of weeks to months before resource estimates are revealed.
And it couldn’t happen at a better time.
40% Of The Global Potash Resource Is In Jeopardy5
While it doesn’t command ‘safe haven’ status like gold, and isn’t making headlines like lithium, potash is one of the world’s most important minerals.
It’s the key ingredient in the 95% of fertilizers that are used to replace the vital nutrients that are depleted from soil during farming.
Over the last few decades, this has become a critical concern for the agriculture sector. Already faced with a growing global population, over-cultivation has left traditionally rich soils unproductive. Farmers, in turn, have had to become increasingly reliant on fertilizer to replace the minerals necessary to meet expected yields.
At the same time global annual production dipped to 55 million tonnes, far short of anticipated demand, which is currently calculated at 73 million tonnes.
And by 2030, demand is expected to increase to 90 million tonnes as populations in developing nations continue to expand.
The world needs a new reliable source of potash — and fast.
Luckily, one junior explorer is making rapid advancements in the potash bearing Congo Basin, but strategically located in the business-friendly jurisdiction of Gabon.
A Winning Formula
The company’s Banio Potash Project is in the heart of the Congo Potash Basin, covering a large swath of land 1,244 square kilometers in size.
Gabon has an extensive history in mining metals, as well as being the fifth largest petroleum and gas producer in Africa.
As such, a number of majors, the likes of Fortescue, Eramet, Total and Shell have made significant investments in the country.
But most notably, the region is home to the high-grade Congo potash basin, where established miners have staked their claim.
While little potash exploration has taken place on the Banio property to date, oil exploration drilling in the 1970s to 1990s recorded numerous occurrences of potash, and spot sampling by the geological staff returned high grade results.
Then in 2017, two companies began exploration on the property with the purpose of establishing potash resource estimates. The company completed 3 core drill holes, which confirmed the presence of a large, high grade potash mineralized footprint on the Alpha Target:
BA-002 returned :
- 9m at 29.5% KCl from 284.4m sylvinite,
- 4m at 34.9% KCl from 281.0m sylvinite,
- 0m at 29.7% KCl from 263.9m sylvinite,
- 6m at 32.9% KCl from 324.6m sylvinite
- 2m at 18.8% KCl from 409.7m, incl. 4.4m at 21.4% KCl from 409.7m carnallite, and
- 8m at 16.1% KCl from 438.7m carnallite
BA-003 returned :
- 7m at 30.0% KCl from 237.8m sylvinite,
- 0m at 29.7% KCl from 264.6m sylvinite,
- 9m at 21.2% KCl from 430.26m carnallite,
- 8m at 16.0% KCl from 456.98m carnallite,
- 3m at 18.2% KCl from 471.15m carnallite, and
- 4m at 16.0% KCl from 500.61m carnallite
All in all, the JORC-compliant Inferred Mineral Resource estimate totaled 1.67 billion tons at an overall grade of 16.1% KCl.
Unfortunately, these results were not consistent throughout the potash-bearing zones and therefore could not support official mineral resource estimates. But that won’t be the case for much longer.
The company recently engaged Ercosplan, a global leader in the potash industry with extensive experience in the Congo Basin, to complete a NI 43-101 report on the Banio Potash Project.
And right now, exploration teams are spread out across Banio property with drill rigs, in an effort to prove out the project’s resources. They’re flying electromagnetic sensors over the property, as well, to identify new sources of mineralization to further explore.
This is a highly organized effort where up to 50 workers can live on site full time with catered meals and air-conditioned tents.
That means this company could be just weeks from releasing news.
Low-Cost Mining And A Direct Route To South America Offer This Company A Big Advantage
- Gabon boasts several factors that allow for low production and shipping costs: The country has maintained a favorable labor and regulatory environment.
- The Banio Project is located in an area where infrastructure is plentiful. There’s no need to build roads, drill for water, or find a way to generate electricity. It’s all there, which is how workers can live in air-conditioned comfort.
- The Banio Project has nearby barge access that can bring as many as 40,000 metric tons to a bulk carrier located right offshore.
Now that last point is critical.
You see, South America is the largest consumer of seaborne potash in the world.
Approximately 12 Million tonnes per year are imported, mainly from Canada, Russia, and the Middle East, all which involve significant transportation costs and time.
In comparison, the West African coast is ideally located much closer to South America than these current suppliers. That translates to a significant shipping advantage over other major potash producing regions.
What to do now…
Foresight and risk assessment are the secret to successful junior mining stock investing. This company’s founders have made that formula work time and time again.
That’s why now could be the right time to dig into your research.
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