Davenport Resources prepares to prove up historic resource at Ebeleben
Davenport Resources (ASX:DAV) has released a historic resource of 356 million tonnes of 16.1% K2O (57.4 million tonnes contained K2O) in Sylvinite, equivalent to 91 million tonnes of potassium chloride (KCI), in relation to its Ebeleben mining licence in the South Harz region of Germany.
Investors should note that this is not a JORC compliant resource estimate, and as indicated below, the company is utilising the data to compile the historic estimate in shaping its exploration strategy which is aimed at establishing a JORC 2012 compliant resource.
Ebeleben is one of three perpetual mining licences in the South Harz basin that DAV acquired recently from German government agency Bodenverwertungs-und-verwaltungs GmbH (BVVG). The company now holds exploration licences and perpetual mining licences covering well in excess of 650 square metres in the South Harz.
DAV remains a speculative stock, however, so investors should seek professional financial advice if considering this stock for their portfolio.
In addition to the Küllstedt and Gräfentonna exploration licences, the three mining licences, Mühlhausen-Nohra, Ebeleben and Ohmgebirge (as shown below), are unique and valuable, being perpetual mining licences granted under the former GDR system.
DAV has prioritised areas for systematic data analysis and once all data has been evaluated the company intends to select a number of areas for drill testing to upgrade the historic resource to JORC 2012 standard. Areas will be prioritised based on results and available access and approval requirements. The group’s established working capital and potentially new equity capital will be used to fund the drilling campaign.
Historical Resource Estimate
When the resource on the licence was estimated in 1987 the Ebeleben mining licence was defined as an extension of the Volkenroda potash mine and the operator commenced shaft sinking within the Ebeleben mining licence area with a view to commencing mining. However, the reunification of Germany resulted in the closure of the Volkenroda mine in 1991 and sinking of the shaft stopped at a depth of around 100 metres.
Commenting on the benefits of having access to historical mining data, DAV’s Managing Director Chris Bain said, “The detailed information supporting this historic resource estimate will allow Davenport to fast track cost-effective brownfields evaluation of the area with the aim of reinvigorating the South Harz as a globally significant potash producing region.”
Bain anticipates that a minimum number of carefully located confirmation drill holes can readily validate these historic resources to allow conversion to JORC 2012 standard. Further historic resources on the other mining licences acquired from BVVG will be released as the data is reviewed.
Fleshing out the geological features and the extent of the Ebeleben mining licence, it covers a band of Sylvinite potash mineralization that extends from the now closed Volkenroda mine to DAV’s Grafentonna exploration licence as indicated below.
Within the licence area there were 12 potash holes drilled in two stages in the 1960’s and the 1980s. In parallel to the potash exploration, hydrocarbon exploration was also conducted, mainly along the south-west part of the Ebeleben mining licence.
In total, 18 hydrocarbon exploration drill holes were sunk within the area. The historic drilling provided a relatively detailed picture of the lithostratigraphic structure and the predominantly Sylvinite mineralogy.
Geological and hydrological conditions were considered to be largely similar to those in the adjacent Volkenroda mine, and the potash salts were considered to be amenable to processing through the technology then in use at Volkenroda.
Typically, if both potash-bearing rock types are present (Sylvinite and Carnallitite), the Sylvinite occurs at the top and/or base of the Carnallitite. In most parts of the Ebeleben Mining Licence area only the overlying Sylvinite occurs separately, or is additionally underlain by a Carnallitite layer.
The potash-bearing horizon is developed over the entire Ebeleben Mining Licence area with varying thicknesses and K2O grades. Generally speaking, the bedding shows wide alternating synclines and anticlines with, especially within the saliferous horizons, faults and folds as well as local thinning and thickening of the potash-bearing horizon.
The Sylvinite resource was subdivided into that which was considered as a mining horizon 221 million tonnes at 16.7 per cent K2O (37 million tonnes of contained potash). However, there appears to be scope for significant upside, and the results of upcoming exploration initiatives could provide share price momentum.