Drilling of the first hole at the key Ohmgebirge muriate of potash (MOP) project in central Germany will begin in the December quarter with South Harz Potash (ASX: SHP) expecting to deliver its scoping study in the first quarter of 2022.
With five projects in Germany, the company has a total inferred resource of 5.3 billion tonnes, with Ohmgebirge holding a 325 million tonne resource grading at 13.1% potassium oxide.
The company has chosen the specialist deep drilling company H. Angers Sohne Bohr und Brunnenbaugesellschaft (Angers) to drill the first of two planned holes at the project.
The drill hole is planned to go to 665m below surface, a depth which will see it penetrate the known potash seam.
Meanwhile, South Harz is conducting negotiations with landowners and tenants in respect of the site options for the second hole.
Minimal drilling required to boost JORC resource
The company, formerly Davenport Resources, holds three perpetual mining licences, Ohmgebirge, Ebeleben and Mühlhausen-Nohra, and two exploration licences, Küllstedt and Gräfentonna, in the South Harz potash district in north-western Thüringia, central Germany.
These licences are located in a region with a long potash mining history and established infrastructure, and which was mothballed after the collapse of the Communist East Germany.
South Harz has termed its portfolio of German licences as representing Western Europe’s most significant potash resource.
These contain high-grade MOP inferred mineral resources and potassium and magnesium sulphate minerals at relatively shallow depths.
The company has compiled a large database of drill hole information covering its licence areas.
According to South Harz, it “requires only a minimum of confirmatory drilling in order to elevate the JORC status of each”.
The planned drill holes will by surveyed using a full suite of geophysical tools, it added.
European drilling contractors in short supply
South Harz managing director Dr Chris Gilchrist said he is pleased to have secured a specialist drilling contractor, these being in short supply in Europe due to the post-Covid resources and materials rush.
“The potash market has picked up significantly over the past few weeks as post-Covid food security fears have fuelled substantial crop prices which, in turn, have driven fertiliser sales and prices upwards,” Dr Gilchrist added.
As Small Caps reported recently, Brazil’s MOP prices hit US$450 per tonne (A$595/t) last month, the highest level since 2013 — and the prices rose 81% since the beginning of 2021.
Similarly, the US Midwest price was also the highest in eight years, hitting US$440/t (A$582/t).
This comes at a time when soft commodity prices, particularly those for corn and soybeans, are at their highest levels since 2011.
Meanwhile, soils around the world have become depleted over that period due to inadequate use of fertilisers.