Raytec Metals Corp., Vancouver, said Jan. 29 that it has signed an agreement to purchase a 100 percent interest in Exploration Permit Application KP441, located in Saskatchewan.
Permit KP441 covers an area of approximately 88,320 acres in central Saskatchewan, in an area of both highly prospective properties and producing potash mines, including Potash Corp. of Saskatchewan Inc.’s Cory Mine, located 20 kilometers south. The claims are immediately adjacent to claims currently held by a joint venture between Anglo Minerals Ltd. (Anglo Potash) and BHP Billiton Diamonds Inc. Raytec notes that the Anglo jv has increased its area of primary interest as the seismic data indicates that the potash resource may be possibly larger and more contiguous than originally thought. As a result, Anglo has initiated a $16 million follow-up seismic program and drill program.
Raytec says Saskatchewan Ministry of Energy and Resources data indicates that its permit lands are underlain by both the Patience Lake and the Belle Plain potash members. Raytec said information obtained from the Saskatchewan Research Council on two drill holes within the drill area, conducted by Canadian Exploration Ltd. in 1969, indicated intersections with both of these potash members.
Raytec cautions, however, that there is no NI43-101 report on the property, nor are there proven, indicated, or inferred resources. It says the presence of the Patience Lake and Belle Plain potash members in the 1969 drill holes does not guarantee the presence of economic quantities of potash.
Raytec says it acquired its permit from an unnamed arms-length vendor. Terms with the vendor include: on acceptance of the acquisition by the TSX Venture Exchange – $50,000 and 1 million shares of the company, commencing on the later of: 30 days following issuance of the final exploration permit from the Saskatchewan Ministry of Energy and Resources, or six months from the date of the agreement: $2 million payable in stages over a period of 12 months and the number of shares equivalent to $1 million worth of the company’s stock; and a 2 percent royalty in favor of the vendor, which may be purchased for $2 million.
In addition, Raytec says it has granted incentive stock options to its directors, officers, consultants, and employees, under its stock option plan, for the purchase of up to 300,000 common shares for a period of 2 years at a price of $.40 per share.
Raytec describes itself as an integrated mineral exploration company that is developing Canadian mineral deposits. It cites iron ore properties in Ontario as well as the potash permit in Saskatchewan. Brian Thurston, Raytec president, says the company is well positioned to meet the growing demand for these products in India, China, and Asia.
In just the past few months, the industry has been peppered with reports from new, emerging companies, ready to explore potash reserves and make their fortunes. Most recently, and just in Saskatchewan alone, these have included Anglo Potash Ltd. (GM Jan. 28, p. 14), Athabasca Potash Inc. (GM Jan. 21, p. 13), Potash One (GM Jan. 14, p. 12).
Bill Doyle, PotashCorp President and CEO, recently made light of his new competition in a teleconference with analysts. He noted that one had said it was happy to be in the potash industry. He said he had news for them – they are not in the potash industry. He outlined the long road and huge cash outlays ahead for any of them in actually developing a greenfield project, as well as the transportation logistics and terminals needed thereafter.
Not all the proposed projects are in Saskatchewan. An Indian company recently announced exploration plans for Ethiopia (GM Dec. 3, p. 11) while MagMinerals Inc., a Canadian company, has its sites on the Congo (GM Dec, 3, p. 14).
Higher phosphate prices have also encouraged phosphate exploration, with PhosCan searching for product in Canada (GM Jan. 14, p. 13). Legend International Holdings Inc. and Minemakers are both eyeing projects in Australia (GM Jan. 21, p. 13 and Jan. 7, p 14). While Canadian-based Sprott Resources Corp. has expressed an interest in Peru (GM Nov. 26, p. 14), where it says it invested in reserves long before the recent run-up in phosphate rock prices.