Australia

Port Keats, Northern Territory
Rock Salt and Potash

Minemakers aims to drill test a large seismic structure on the Northern Territory coastline.  It has been interpreted to be a rock salt dome.  If this proves to be the case, conventional solution mining technology could enable the Company to set up a major salt production facility, exporting to the Asian markets. Sodium and potash salts will be targeted.

Background

Marine and onshore seismic surveys of the Bonaparte Basin by the oil industry defined several diapiric structures which have been interpreted as salt domes.  Offshore and some 30kms west, one of them was drilled (Kinmore No. 1 Well) which intersected a salt column over 200m thick, with the well bottoming in salt.  The operator estimated the salt thickness as more than 1,200m as the well attained salt on the shoulder of the dome and 1000m deeper than the top of the structure.

With an interpreted diameter of up to 10km, the Port Keats Diapir potentially hosts up to 150 million tonnes of salts per vertical metre.  The oil explorers estimated the top of the dome to be only about 350m deep.

The Port Keats structure lies under shallow waters adjacent to the coast and its development will require access to land for brine evaporation purposes. 

Minemakers has 100% ownership three Exploration Licence Applications.  The offshore application covers most of the target and is likely to be granted in early 2012.

Commodity outlook

This is seen as very positive for common salt. As seawater contains an inexhaustible supply of salt, price is generally set by production cost and transport parameters.  For much of the Asian region, a mix of climatic, topographic and competing land demand problems renders large scale sea-salt production difficult.  Recently, China's levels of industrialization have outstripped its ability to produce salt.  In Australia, it is proving difficult to gain permitting for the large land areas impacted by a sea-salt operation.  This project points to a good future for Australian salt in general and for solution-mined salt in particular.

Since acquisition of the project in 2004, potash prices have increased very strongly. The dome is viewed as having strong potential also to host potash salts.

To date, work has included liaison with Traditional Owners which has resulted in obtaining permission to drill the target from shore, and a detailed airborne magnetic survey.

Drilling from an offshore barge is now preferred, so as to provide more certainty in the testing of the target. As this will be expensive, Minemakers has been seeking a JV partner.