NGEX – Eritrea: Bada Potash Exploration

Bada and Colluli for Potash

The Bada Potash Exploration License is located in the Danakil Depression in Eritrea. This large license, encompassing over 431 square kilometers, is located 30 kilometres inland from the Red sea port of Mersa Fatma and 150 kilometres southeast of the capital city of Asmara.

The Bada license is situated within the northern portion of an evaporite basin extending southward into Ethiopia, where exploration in the 1960’s resulted in the discovery of the large Crescent and Musley potash and sylvite deposits.

Allana Resources Inc. have been drilling an area north of the Musley deposit and have reported an inferred resource of 105.2Mt grading approximately 20.8% KCl (sylvite and kainite – Allana press release dated September 17, 2008).

BHP-Billiton and Sainik Coal Mining, a leading Indian coal mining company have large exploration licenses in the Ethiopian portion of the basin south of the Crescent and Musley deposits.

In the Eritrean part of the basin, South Boulder Mines Ltd. have announced the discovery of shallow potash mineralization near the village of Colluli in Eritrea, 20 kilometres north of Musley and 30 kilometres southeast of Bada. South Boulder reports shallow potash-bearing horizons up to 19.7 metres thick averaging 20% to 25% KCl (see South Boulder press release dated October 18, 2010). South Boulder have announced plans for a pre-feasibility scoping study for low-cost open-pit mining at Colluli.

The Danikil Depression is known to continue northeast from Colluli and is believed to have potential for potash-bearing beds on the Bada license. However, only very limited historical exploration work has been done in the license area to date. Initial reconnaissance at Bada by NGEX found extensive shallow alluvium cover, young volcanic rocks or recent marine evaporites, with potential for potash-bearing rocks under much of the license area.

Exploration of the license will start in January, 2011. The initial phase will be to confirm the evaporite sequence and then to drill test the shallower portions of the basin for potash mineralization.

The Bada license area offers several significant advantages for any future operations. The area has easy access to the port of Mersa Fatma to the northeast, alluvial fans on the southeast side of the depression could be a viable source of fresh process-water, and the shallow nature of the mineralization found to the south at Colluli suggests the feasibility of low-cost open pit mining.

NGEX’s Eritrean subsidiaries, have a 12 year operating history the country and a strong technical and support team.