Zenith Minerals picks up potash brine project, will demerge into new ASX vehicle
As Lithium Australia advances its battery recycling technologies, the company continues progressing its exploration projects.
Lithium-focused Zenith Minerals (ASX: ZNC) has acquired a potash brine project in Western Australia at a time when the world is entering a severe fertiliser supply crunch.
But the Yalgoo project will not detract the company from its battery metals thrust: instead, Zenith says it is planning to demerge its non-battery metals projects, including Yalgoo, into one or more listed new listed ASX companies.
Zenith shareholders will benefit by way of an in-specie distribution of shares in the new listed company (or companies).
Zenith has teamed up with Saudi Arabian EVM Metals Group with plans to supply lithium from its West Australian projects to a new battery chemicals plant in the Middle Eastern kingdom.
EM data shows possible brine paleochannel
The potash brine target at Yalgoo was identified during an assessment of regional government electromagnetic data, while Zenith was in the process of exploration at its nearby Waratah Well lithium project, one of two projects involving EVM (the other being Split Rocks).
Modelling of that data from the Yalgoo ground indicated a 50km-long, by 15km-wide, series of conductive layers extending from near surface to depths of 95m, which is interpreted to be a “major” rich brine paleochannel.
The project area lies immediately south of the Geraldton-Mt Magnet road and a gas pipeline.
It is located 250km east of Geraldton’s port, which the company notes is closer than the other West Australian brine projects that are between 780km and 1,100km from that port.
No previous drill testing of the brine project has been recorded.
Zenith plans an initial six to 12 aircore drill holes to depths of about 100m, these to be undertaken once heritage agreements and permitting are in place.
Global potash market in flux
Although Yalgoo would be targeted for sulphate of potash, the potash industry as a whole is now subject to intense focus as the whole family of fertiliser feed stocks are coming under intense supply — and price — pressure.
Belarus and Russia supply 37% of the world’s potash.
Russian exports have been hit by sanctions and now there are reports that Belarusian potash is not reaching markets outside that country.
Moreover, at a time when global supply chains are stretch to — and sometimes beyond — their limits, there is an increasing focus around the world on developing national sources of supply of key materials rather than depending on imports.
Fertiliser is one such commodity, with Australia now importing around 90% of its needs.
This situation has already given a boost to Australia’s potash brine sector.