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DAVENPORT RESOURCES LIMITED
TECHNICAL REPORT
ON THE
MINERAL RESOURCES
OF THE
MÜHLHAUSEN-KEULA SUB-AREA OF THE
MÜHLHAUSEN-NOHRA MINING LICENCE
SOUTH HARZ POTASH PROJECT
THURINGIA, GERMANY
Report Date: 12th October 2018
Effective Date: 6th October 2018
Prepared By
Micon International Co Limited
Suite 10 Keswick Hall, Norwich, NR4 6TJ, United Kingdom
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Table of Contents
1.0 EXECUTIVE SUMMARY ..................................................................... 1 1.1 INTRODUCTION ................................................................................. 1 1.2 PROPERTY DESCRIPTION AND LOCATION ................................. 2 1.3 LICENCES AND PERMITS ................................................................. 3
1.4 INFRASTRUCTURE ............................................................................ 3 1.5 GEOLOGY AND MINERALISATION ............................................... 4 1.6 EXPLORATION ................................................................................... 5 1.7 MINERAL RESOURCE ESTIMATION .............................................. 6
2.0 INTRODUCTION.................................................................................... 9
2.1 PURPOSE AND SCOPE OF REPORT ................................................ 9 2.2 CAPABILITY AND INDEPENDENCE............................................... 9
2.3 DISCLAIMER ..................................................................................... 10
3.0 GENERAL INFORMATION ............................................................... 12 3.1 KALI-INSTRUKTION AND THE GKZ SYSTEM ........................... 12 3.2 MICON APPROACH TO RESOURCE/RESERVE
CLASSIFICATION ............................................................................. 14 3.2.1 Mineral Resources ....................................................................... 14
4.0 PROPERTY DESCRIPTION AND LOCATION .............................. 16 4.1 PROPERTY DESCRIPTION .............................................................. 16 4.2 PROPERTY LOCATION .................................................................... 16
4.3 LICENCES .......................................................................................... 19 4.3.1 Mining Rights .............................................................................. 19
4.3.2 Surface Rights .............................................................................. 20 4.4 ROYALTIES ....................................................................................... 20
4.5 ENVIRONMENTAL LIABILITIES, LEGISLATIVE AND
PERMITTING REQUIREMENTS ..................................................... 21 4.6 MATERIAL AGREEMENTS ............................................................. 21
4.7 OTHER SIGNIFICANT FACTORS AND RISKS ............................. 21
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,
INFRASTRUCTURE AND PHYSIOGRAPHY ................................. 22 5.1 PROPERTY ACCESS ......................................................................... 22 5.2 CLIMATE ............................................................................................ 22
5.3 LOCAL RESOURCES AND INFRASTRUCTURE .......................... 22 5.4 PHYSIOGRAPHY ............................................................................... 23 5.5 FLORA AND FAUNA ........................................................................ 23
6.0 REGIONAL GEOLOGY ...................................................................... 24
6.1 DEPOSIT TYPES ................................................................................ 24 6.2 REGIONAL GEOLOGY AND STRUCTURAL SETTING .............. 24 6.3 LOCAL GEOLOGY ............................................................................ 25 6.4 MINERALISATION ........................................................................... 27 6.5 ECONOMIC MINERALS ................................................................... 29
6.5.1 Sylvinite – ‘Hartsalz’ ................................................................... 29
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6.5.2 Carnallitite.................................................................................... 30
6.5.3 Rock-Salt...................................................................................... 30
7.0 HISTORICAL EXPLORATION ......................................................... 31 7.1 HISTORY OF THE SOUTH HARZ POTASH DISTRICT ............... 31 7.2 HISTORIC OWNERSHIP ................................................................... 32 7.3 SOURCE DATA .................................................................................. 32
7.4 EXPLORATION ................................................................................. 33 7.5 DRILLING ........................................................................................... 39 7.6 LOGGING ........................................................................................... 39 7.7 SAMPLE PREPARATION AND ANALYSIS ................................... 40
7.7.1 Sampling ...................................................................................... 40
7.7.2 Analysis Procedures ..................................................................... 40 7.8 HISTORICAL MINERAL RESOURCE ESTIMATES...................... 41
8.0 DATA VERIFICATION ....................................................................... 44
9.0 MINERAL PROCESSING METALLURGY AND TESTING ......... 45
10.0 MINERAL RESOURCE ESTIMATE ................................................. 46 10.1 INTRODUCTION ............................................................................... 46
10.2 GEOLOGICAL INTERPRETATION AND MODELLING .............. 46 10.3 MINERAL RESOURCES ................................................................... 48
11.0 MINING METHODS ............................................................................ 55
12.0 CONCLUSIONS AND RECOMMENDATIONS ............................... 56
13.0 DATE AND SIGNATURE PAGE ........................................................ 58
14.0 REFERENCES ....................................................................................... 59
15.0 CERTIFICATE ...................................................................................... 60
16.0 GLOSSARY AND ABREVIATIONS .................................................. 61 16.1 GLOSSARY ........................................................................................ 61
16.2 ABBREVIATIONS ............................................................................. 64
17.0 APPENDIX 1 .......................................................................................... 66
18.0 APPENDIX 2 .......................................................................................... 79
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List of Tables
Table 1.1: Historical Resources for the Mühlhausen and Keula Sub-Areas ................. 7
Table 1.2: Exploration Target Mineral Resource Estimate for the Mühlhausen and
Keula Areas of the Mühlhausen-Nohra Mining Licence (Ercosplan,
2017) .................................................................................................... 7
Table 1.3: Inferred Mineral Resource Estimate for the Mühlhausen and Keula Areas
of the Mühlhausen-Nohra Mining Licence (Micon, 6th October 2018)
............................................................................................................. 8
Table 4.1: Mühlhausen-Nohra Mining Licence .......................................................... 20
Table 6.1: Zechstein Series Geology (after Ercosplan, Jan 2018) .............................. 26
Table 6.2: Evaporite Rock Types within the Mühlhausen-Keula Sub-Area .............. 28
Table 7.1 Historically Significant South Harz Potash District Mines ........................ 31
Table 7.2: Mühlhausen-Keula Sub-Area Drill-Hole Database Summary .................. 34
Table 7.3: Exploration Drill Holes within the Mühlhausen-Keula Sub-Area ............ 35
Table 7.4: Historical Resources for the Mühlhausen and Keula Sub-Areas ............... 42
Table 7.5: Exploration Target mineral resource estimate for the Mühlhausen and
Keula areas of the Mühlhausen-Nohra Mining Licence
(Ercosplan, 2017) ............................................................................... 43
Table 10.1: Mühlhausen-Keula Sub-Area Mineral Resources as at 6th October 2018
........................................................................................................... 54
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List of Figures
Figure 1.1: Location Map of the Mühlhausen-Nohra Mining Licence ......................... 2
Figure 3.1: Comparison of GKZ and JORC Code Resource/Reserve Classification . 13
Figure 3.2: Exploration Results, Mineral Resources and Ore Reserves as Defined by
the JORC Code .................................................................................. 14
Figure 4.1: Regional Location Map of the South Harz Potash Project ....................... 17
Figure 4.2: Location Map of the Davenport Mining and Exploration Licence Areas 18
Figure 4.3: Nohra-Elende and Mühlhausen-Keula Sub-Areas of the Mühlhausen-
Nohra Mining Licence ....................................................................... 19
Figure 6.1: Geological Map of the Mühlhausen-Nohra Mining Licence Area........... 27
Figure 7.1: Drill Hole Positions and Main Mineral Distribution within the
Mühlhausen-Keula Mining Licence Area ......................................... 38
Figure 10.1: SW-NW Cross-Section across the Mühlhausen-Keula Sub-Area .......... 47
Figure 10.2: Drill Hole Plan and Wireframes of the Mühlhausen-Keula Sub-Area ... 50
Figure 10.3: K2O Grade Distribution in the Upper Sylvinite Seam, Mühlhausen-
Keula Sub-Area ................................................................................. 51
Figure 10.4: Thickness Distribution in the Upper Sylvinite Seam, Mühlhausen-Keula
Sub-Area ............................................................................................ 52
Figure 10.5: Upper Sylvinite Seam Roof Elevation, Mühlhausen-Keula Sub-Area .. 53
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1.0 EXECUTIVE SUMMARY
1.1 INTRODUCTION
Micon International Co Limited (Micon) was contracted by Davenport Resources Ltd
(Davenport) to undertake an estimate of the mineral resources of the Mühlhausen-Keula sub-
area of the Mühlhausen-Nohra mining licence, located within the South Harz Potash District
of the Thuringian Basin, Germany. Davenport is a publicly-listed company on the Australian
Securities Exchange (ASX) and holds the Mühlhausen-Nohra mining licence through its
wholly owned German subsidiary, East Exploration GmbH. In addition to the Mühlhausen-
Nohra mining licence, Davenport has also been awarded the Ebeleben and Ohmgebirge mining
licences, together with the adjoining Küllstedt and Gräfentonna exploration licences, all of
which form the greater South Harz Potash Project.
Due to the extent, shape and geological characteristics of the Mühlhausen-Nohra mining
licence, Micon has logically split it into two distinct sub-areas, each of which were separately
interpreted and modelled. These include the northerly Nohra-Elende sub-area and the southerly
Mühlhausen-Keula sub-area. This technical report presents the results of the mineral resource
estimation for the southern Mühlhausen-Keula sub-area (the Project) of the Mühlhausen-Nohra
mining licence area only. It has been prepared in accordance with the guidelines of the 2012
edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute of
Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of
Australia (the JORC Code).
The evaluation of the Mühlhausen-Keula sub-area has been based on historical exploration
records supplied to Micon by Davenport, which Micon used to create a three-dimensional
(3-D) model using Micromine® geological modelling software. The historical data was
supplied to Micon either as scans of the original drilling information sourced from various data
depositories, or as pre-captured data ordered in an Excel database by Ercosplan Geotechnik
und Bergbau (Ercosplan).
The principal consultants responsible for the review of the Project and the preparation of this
Report are listed in Section 2.2.
Elizabeth de Klerk M.Sc., Pr.Sci.Nat., SAIMM., Micon’s Senior Geologist and Competent
Person visited the South Harz Potash project from 12th to 16th February and again from 6th to
8th March 2018. During the initial site visit the South Harz Potash Project and laboratory
facilities at K-UTEC AG Salt Technologies (K-UTEC) in Sondershausen were visited. The
original hard copy drill-hole logs, reports, maps and cross-sections held by the
Bodenverwertungs und verwaltungs GmbH (BVVG) archives in Berlin were inspected. In
addition, Mrs. de Klerk had discussions with Ercosplan in Erfurt in order to understand how
the data was captured and structured in an Excel database from which Ercosplan estimated
Exploration Targets for the various Davenport licences of the South Harz Potash Project. The
second site visit involved additional time being spent at K-UTEC inspecting additional
historical records for the South Harz Potash Project held in the K-UTEC archives at its head
office in Sondershausen.
The results of this study are principally derived from the examination and interpretation of
historical exploration and sampling data. No independent confirmatory sampling has been
performed by Micon as a part of the current study to confirm or otherwise quantify the
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conclusions presented in this report due to no historical drill core being available for check
logging or sampling.
Micon has provided a completed Table 1 of the JORC Code in Appendix 1 for the Mühlhausen-
Keula sub-area of the Mühlhausen-Nohra mining licence area.
1.2 PROPERTY DESCRIPTION AND LOCATION
The Mühlhausen-Nohra mining licence is located in the north-western part of the Federal State
of Thuringia, approximately 30 km northwest of the state’s capital city of Erfurt, and at the
south-western boundary of the South Harz Potash District (Figure 1.1).
Figure 1.1: Location Map of the Mühlhausen-Nohra Mining Licence
Source: Davenport
The Mühlhausen-Nohra mining licence is situated within the Central Uplands of Germany,
which has a transitional climate that fluctuates between moderately oceanic and humid
continental. Winters are relatively cold with average highs of 2ºC and lows of -3ºC, whilst
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summers tend to be warm, and at times humid, with average highs of 23ºC, although maximums
can exceed 30ºC. Precipitation averages 502 mm per annum, which falls throughout the year.
The topography in the area is characterised by gently undulating hills, which are often forested
and interspersed by narrow slow-flowing rivers and streams. The Mühlhausen-Keula sub-area
has a high point of 535 m along the Dün Ridge in the north and a low point of 212 m in the
southeast close to the town of Mühlhausen.
1.3 LICENCES AND PERMITS
East Exploration GmbH is 100% owned by Davenport and is the owner of each of the Ebeleben,
Mühlhausen-Nohra and Ohmgebirge mining licences. In addition, the company holds the
neighbouring Gräfentonna and Küllstedt exploration licences. This report does not contain a
legal review of the Mühlhausen-Nohra and Ohmgebirge mining licences or the Gräfentonna
and Küllstedt exploration licences. The Mühlhausen-Nohra Mining Licence Deed No. is
1077/95-611 and has an area of 141.6049 km2.
Due to the original Südharz mining property having been classified as an ‘old mining property’
pursuant to Sec. 151 of the Bundesberggesetz (BBergG), from which the Mühlhausen-Nohra
and Ebeleben mining properties were later derived, the Mühlhausen-Nohra and Ebeleben
mining properties are classified as ‘old mining properties’ – i.e. those mining properties which
were derived during the former East German system. It has been confirmed by the relevant
authority post the reunification of Germany that these licences are unlimited in time and are
not subject to any royalty payments with no supporting work programme required. As such
the Mühlhausen-Nohra mining licence is classified as being perpetual in nature, is not subject
to expiry and is valid to explore for and produce ‘potash including (associated) brine’ with no
applicable statutory royalties.
The holder of a mining right has the exclusive right to explore and/or produce and to
appropriate the respective mineral resources in a certain field. However, all exploration and
production activities require a mining permit (Betriebsplanzulassung) to be applied for with
the mining authority. In addition environmental and water permits may also be required as
well other permits, such as deep drilling operations which require approval from the Federal
Office for the Safety of Nuclear Waste Management (BfE) that is responsible for preserving
geological formations that are potentially suitable for the storage of nuclear waste.
Davenport Resources Ltd do not own any of the surface rights across the Mühlhausen-Nohra
mining licence.
1.4 INFRASTRUCTURE
In general, the infrastructure of the region is modern and well-developed with several federal
and state roads connecting to federal motor-ways, and a regional railway network connecting
to the trans-regional railway network in the vicinity of the mining licence. Power supplies are
available for households, established commerce and industry via a well-developed grid
network. All of the state towns, especially the district capitals, are considered to be advanced
modern towns with a developed infrastructure that includes shopping centres, hospitals and
clinics, schools and banking.
Thuringia State has an average population density of 130 people per km2 with numerous towns
and villages located both within or adjacent to the Project. Each of the district capital towns
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of Heilbad Heiligenstadt, Nordhausen, Mühlhausen and Sondershausen are approximately
20 km from the Project area. Erfurt the largest city and state capital of Thuringia has a
population of approximately 206,000 and is 50 km southeast of the Mühlhausen-Nohra mining
licence. All basic services can be sourced from these towns.
Potash mining is an established industry in the region, which has resulted in the ongoing
development of a skilled workforce in this regard. Supplies and personnel to conduct
exploration and mining activities can be sourced locally. Whatever cannot be sourced from
Erfurt or elsewhere in Thuringia can be easily sourced from cities such as Berlin and Frankfurt.
1.5 GEOLOGY AND MINERALISATION
The Mühlhausen-Nohra mining licence is located in the north of Thuringia in the central/north-
western section of the Thuringian Basin and has an area of 141.6049 km2. The Project has
never been mined with the primary target being the Staßfurt potash seam of the potash-bearing
Zechstein Group (Upper Permian – Zechstein). The adjacent Volkenroda, Sollstedt,
Bleicherode and Kemstedt mining fields have been historically mined since 1896 for the
production of potash fertilisers and are currently being used as underground waste storage
facilities. The adjacent Volkenroda underground potash mine originally held the mining
licences for both Mühlhausen-Nohra and Ebeleben and had planned on extending the mine
southeast onto the Ebeleben mining licence. Construction of a new ventilation shaft was started
on Ebeleben in 1990, which was sunk to a depth of 100 m, before Germany was unified that
same year and Volkenroda lost the licences. Whilst on site, Mrs. de Klerk visited the area
where the ventilation shaft was sunk.
The regional stratigraphy of the South Permian Basin is fairly well understood with a
pre-Variscan basement (Upper Carboniferous and older rocks) and a transition horizon of
Upper Carboniferous to Lower Permian lying beneath an expansive sequence of evaporite
rocks of the Upper Permian succession. These evaporite deposits are assigned to the Zechstein
Group, and host the target potash mineralisation of the South Harz Potash District, which
occurs on Mühlhausen-Nohra. The potash-bearing target Zechstein Group consists of seven
depositional cycles with the potash mineralisation of the South Harz Potash District hosted
within the second cycle, the Staßfurt Formation (Z2).
The majority of the potash deposits have been altered by intruding water or basalt, which
caused plastic deformation resulting in the potash horizons being forced upwards into the
overlying strata. Faulting and water intrusion have caused alteration or dissolving of the
deposited potash, and as such strata within the Zechstein Group can be regionally highly
variable.
The Z2 is further sub-divided into horizons, of which the Kaliflöz Staßfurt (z2KSt) hosts the
potentially economic potash seam. The z2KSt is split into a hanging wall group that has 11 to
19 horizons of finely-layered potassium salts and a footwall group that has 1 to 10 coarsely
layered potassium salts and thick halite seams. The z2KSt is present across the extent of the
Mühlhausen-Nohra mining licence and has an average thickness of 18.2 m across the northerly
Nohra-Elende sub-area. The main minerals present are sylvite and carnallite with lesser
amounts of halite, polyhalite, anhydrite, kieserite, langbeinite, kainite, aphthitalite and
syngenite.
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1.6 EXPLORATION
All of the exploration conducted on the Mühlhausen-Nohra mining licence is historical. The
first evidence of exploration drilling is from drill hole Kal Möhrbach 1/1890, drilling of which
commenced in 1889, following the completion of which a further 14 drill holes were drilled
during the 1890’s. The majority of the historical exploration drilling on the Mühlhausen-Nohra
mining licence was conducted by the former German Democratic Republic (GDR) during two
major campaigns, one in the 1960s and one in the 1970/80s. Various state institutions were
involved during these campaigns, institutions, which were later merged after reunification to
form the VEB Kombinant.
The drill-hole database for the Mühlhausen-Keula sub-area consisted of 57 drill holes; 29
within the license and 28 adjacent to the license. Of these 57 drill holes, 39 were hydrocarbon
exploration drill holes and 18 potash exploration drill holes. The database is incomplete with
various drill holes missing various corresponding downhole data sets throughout. This is due
to the historical data having been partially sourced with the unsourced data either considered
as being stored at an as yet undetermined location, or having been lost/destroyed.
Various state institutions were involved in the historical exploration, where during and post-
unification, the responsibility of the ownership and curatorship of the historical geological
exploration archives became unassigned. This effectively resulted in the archives being
neglected over this period of instability, thereby instigating a process of the exploration
archives being seized/copied and privately stored by various private firms and newly formed
technical institutions of the time.
This has today resulted in the historical data either being stored in duplicate at various localities,
being stored in a single known locality, being stored at an as yet to be determined locality or
being assumed as being lost/destroyed. The BVVG is considered to have the most complete
national archive, with various other depositories hosting duplicates thereof, as well as various
additional datasets of which the BVVG does not yet have copies. This has resulted in the
current archives stored by BVVG as being partial in extent
Compounding this scenario is that various, often undated, iterations of the historical
exploration data pertaining to a single drill hole exist. During the drilling and analysis of a drill
hole various updated versions of the drill-hole data were issued. Each of these differed from
the previous as additional data became available, geological logging was refined (based on any
downhole geophysics), or the chemistry and mineralogy results were corrected before sign off
and final approval by the analytical institution. As such it is a common occurrence that two
separate data depositories may contain exploration data for the same drill hole, but which vary
when compared against each other. These differences are virtually always <5%, and rarely
between 5% and 10%. It is often impossible to determine which is the more recent and which
should be relied upon as the date is often not recorded, or recorded only as the year, e.g. 1978.
In compiling the complete Mühlhausen-Nohra mining licence exploration database, Micon
relied on drill-hole data that had been stored and previously captured by Ercosplan. Where
possible this captured data was cross-checked by Micon against both the archived Ercosplan
data, as well as that data stored at BVVG. In addition Davenport was able to source further
historical exploration data from K-UTEC which was independently captured by Micon and
which was also used for cross-checking with the Ercosplan data. In various instances, cross-
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checks yielded minor variation in results (largely <5%) between the chemistry and mineralogy.
The variances due to different versions of the drill-hole data compared.
All drill holes with supporting downhole chemistry data were relied upon for geological
modelling and estimation purposes. Drill holes with only downhole geological data were relied
upon in order to complete wireframing interpretations, especially in localities where there was
a paucity of drill holes with supporting chemistry data.
In instances where full drill-hole logs were available, these typically included a detailed
lithological description of the entire drill hole, a summarised stratigraphic log, graphically-
displayed downhole geophysical log and the chemistry and mineralogy results.
All drill-hole sampling was conducted according to the procedures and protocols as specified
in Kali-Instruktion (1956 and 1960). Drill core samples were collected from all of the potash
drill holes. Where possible, the K2O grade of the potash-bearing horizons was historically
determined on an empirical base using the correlation with the downhole natural gamma log.
Samples were collected across all potash-bearing horizons and the total sampled length
represents the total thickness of the potash-bearing horizon of the z2KSt. In the potash drill
holes, core sample thicknesses ranged from 0.18 m to 4.00 m. Over inhomogeneous potash
horizons where interlayers of potential waste were included, the minimum sample thickness
was 0.5 m and the maximum was 5 m. Samples were crushed to 2 mm in a jaw crusher and a
representative sample was milled and crushed further to 50 μm. A sub-sample was assayed by
ICP-OES for all elements except NaCl, which was analysed using potentiometric titration.
XRD was used for mineralogy and thin sections were carried out at a local university.
1.7 MINERAL RESOURCE ESTIMATION
Between 1980 and 1987 historical resource estimates were reported for three separate sub-
sections of the Mühlhausen-Nohra mining license, referred to as:
• a southerly Mühlhausen sub-section;
• a central Keula sub-section (comparable to the Mühlhausen-Keula sub-area); and,
• a northerly Nohra-Elende sub-section (comparable to the Mühlhausen-Keula sub-area).
The exact extent of the historically defined sub-section areas of the three resources differ
slightly to the current mining licence boundary. The historical resource estimates were
estimated by VEB Geological Research und Exploration, a nationally owned enterprise,
according to the Kali-Instruktion of the former German Democratic Republic (GDR) (Gotte,
1982, /12/) (Table 1.1).
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Table 1.1: Historical Resources for the Mühlhausen and Keula Sub-Areas
(Kästner et al., 1980 and 1987)
Sub-
Section Date
Area
(km2) Mining Horizon
Tonnage
(Mt)
Tonnage
K2O (Mt)
Grade
K2O (%) Category
Mühlhausen 1980 49.2 Hartsalz 234 33.8 14.4 Balance - C2
Carnallite 54.4 5.77 10.6 Non-Balance - C2
Keula 1987 13.7 Hartsalz 65.2 8.3 12.8 Balance - C2
Roof Beam Hartsalz 19.8 3.4 17 Non-balance - C2
Separate Exploration Target mineral resource estimates for each of the Mühlhausen and Keula
sub-areas were estimated by Ercosplan in January 2017 in accordance with the guidelines of
the JORC Code (2012) as shown in Table 1.2.
Table 1.2: Exploration Target Mineral Resource Estimate for the Mühlhausen and Keula Areas of the
Mühlhausen-Nohra Mining Licence (Ercosplan, 2017)
Sub-
Section Seam
Volume
(Mm3)
Tonnage (Mt) Grade K2O (%) Tonnage K2O (Mt)
Min. Max. Min. Max. Min. Max.
Mühlhausen
Upper Sylvinite 233 401 583 10.90 18.38 41 107
Carnallite 209 297 432 5.38 10.79 16 47
Lower Sylvinite 122 210 276 4.75 12.12 10 33
Sub-Total 564 908 1,291 7.67 14.50 67 187
Keula
Upper Sylvinite 67 118 149 9.90 16.38 12 24
Carnallite 99 144 180 7.74 11.03 11 20
Lower Sylvinite 7 12 15 8.75 16.63 1 2
Sub-Total 173 274 344 8.71 13.59 24 46
TOTAL 737 1,182 1,635 7.91 14.31 91 233
Both of these estimates are comparable to the Micon Inferred Mineral Resource estimate.
The geological model and resource estimation undertaken by Micon for the Project was carried
out in Micromine®, a software package used for modelling stratiform deposits. The database
used to create the geological model and mineral resource estimation was created from the
manual data entry of hard-copy historical drill-hole logs and exploration records. The Excel
database was cross-checked against the original drill-hole logs in both the BVVG, Ercosplan
and K-UTEC archives in Berlin and Sondershausen respectively. The drill-hole database was
imported into Micromine® and validated. Validation checks undertaken included checking for
missing samples, mismatching sample and stratigraphy intersections, duplicate records and
overlapping from-to depths. In addition, and where possible the sum of chemical compounds
was checked to ensure a total of 100%.
Once validated, the chemical database was first composited according to stratigraphy, which
allowed the merging of the mineralogical and chemical data tables. Each drill hole was
individually examined and, based on stratigraphy, sequence of mineralised seams and K2O
composite grades, the sylvinite or carnallite seams were further divided into the Upper
Sylvinite seam, Upper Carnallite seam, Lower Carnallite seam and Lower Sylvinite seam.
Roof and floor grids were made for each of the four seams. The minimum and maximum X
and Y origins used for gridding were 592000 (min X), 5674000 (min Y), 610000 (max X) and
5690800 (max Y). A grid cell size of 400 m was used as this best fitted the data when correlated
in cross-section. An inverse distance-squared gridding algorithm was used, with a circular
search area and a 5,000 m search radius to cover the distance between data points, one sector
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and maximum one point per sector. The roof and floor grids were converted to wireframe
surfaces (DTM).
A grade-tonnage report was generated for the four seams using average densities obtained from
historical records, specifically: 2.26 t/m³ for Upper Sylvinite, 1.88 t/m³ for the Upper and
Lower Carnallite, and 2.21 t/m³ for the Lower Sylvinite. The grades for each wireframe have
been reported based on the modelled composited assay database, which were modelled using
the same algorithm and parameters as the seam roof and floor surfaces.
Based on the quality and quantity of the historical data used to create the geological mode,
Micon has classified the Mühlhausen-Keula sub-area as an Inferred mineral resource with a
20% geological loss to take into consideration the confidence levels and potential for seam loss
due to localised faulting (Table 1.3).
Table 1.3: Inferred Mineral Resource Estimate for the Mühlhausen and Keula Areas of the Mühlhausen-
Nohra Mining Licence (Micon, 6th October 2018)
Seam
Bulk
Density
(t/m3)
Geol
Loss
(%)
Tonage
(Mt)
K2O
(%)
K2O
(Mt)
Insolubles
(%)
KCl
(%)
Mg
(%)
Na
(%)
SO4
(%) Category
Upper Sylvinite 2.26 20 660 12.69 84 0.97 14.20 1.32 20.87 16.00 Inferred
Lower Sylvinite 2.21 20 174 9.76 17 1.07 11.54 0.95 28.02 12.31 Inferred
Sub-Total Sylvinite 834 12.08 101 0.99 13.65 1.24 22.36 15.23 Inferred
Upper Carnallite 1.88 20 233 8.53 20 0.67 13.47 4.89 18.09 6.52 Inferred
Lower Carnallite 1.88 20 63 6.88 4 0.66 10.89 3.55 22.55 5.27 Inferred
Sub-Total Carnallite 296 8.18 24 0.67 12.92 4.60 19.04 6.25 Inferred
Total Mühlhausen-Keula Sub-Area 1130 11.06 125 0.91 13.46 2.12 21.49 12.88 Inferred
Notes:
Minimum seam thickness considered for resources is 1 m.
Minimum cut‐off grade ≥5% K2O.
20% geological loss applied to account for potential unknown geological losses for Inferred Mineral Resources.
Data source: historical state records (BVVG) checked and verified.
Inferred Resources rounded down to nearest 100,000 t.
Errors may exist due to rounding.
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2.0 INTRODUCTION
2.1 PURPOSE AND SCOPE OF REPORT
Micon International Co Limited (Micon) was contracted by Davenport Resources Ltd
(Davenport) to complete an evaluation of the mineral resources of the Mühlhausen-Nohra
mining licence located within the South Harz Potash District of the Thuringian Basin,
Germany. Davenport is a publicly-listed company on the Australian Securities Exchange
(ASX) and holds the Mühlhausen-Nohra mining licence through its wholly owned subsidiary
East Exploration GmbH. In addition to the Mühlhausen-Nohra mining licence, Davenport has
also been awarded the Ebeleben and Ohmgebirge mining licences, together with the adjoining
Küllstedt and Gräfentonna exploration licences, all of which form the greater South Harz
Potash Project.
This Technical Report contains the results of the evaluation of the southerly Mühlhausen-Keula
sub-area (the Project) of the Mühlhausen-Nohra mining licence area. It has been prepared in
accordance with the guidelines of the 2012 edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserve
Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of
Geoscientists and the Minerals Council of Australia (the JORC Code).
The evaluation of the Mühlhausen-Keula sub-area of the Mühlhausen-Nohra mining licence
has been based on historical exploration records supplied to Micon, which Micon used to create
a three-dimensional (3-D) model using Micromine® modelling software. The historical data
was supplied to Micon either as scans of the original drilling information sourced from various
data depositories, or as pre-captured data ordered in an Excel database by Ercosplan
(Ercosplan).
2.2 CAPABILITY AND INDEPENDENCE
Micon is an independent consulting firm of geologists, mining engineers, metallurgists and
environmental consultants, all of whom have extensive experience in the mining industry. The
firm has offices in Norwich and Cornwall (United Kingdom), Toronto and Vancouver
(Canada).
Micon offers a broad range of consulting services to clients involved in the mining industry.
The firm maintains a substantial practice in the geological assessment of prospective properties,
the independent estimation of resources and reserves, the compilation and review of feasibility
studies, the economic evaluation of mineral properties, due diligence reviews and the
monitoring of mineral projects on behalf of financing agencies.
Micon’s practice is worldwide and covers all of the precious and base metals, the energy
minerals (coal and uranium) and a wide variety of industrial minerals. The firm’s clients
include major mining companies, most of the major United Kingdom and Canadian banks and
investment houses, and a large number of financial institutions in other parts of the world.
Micon’s technical, due diligence and valuation reports are typically accepted by regulatory
agencies such as the London Stock Exchange, the US Securities and Exchange Commission,
the Ontario Securities Commission, the Toronto Stock Exchange, and the Australian Stock
Exchange.
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Micon is internally owned and is entirely independent of Davenport, East Exploration GmbH
and any other affiliated companies. The personnel responsible for this mineral resource
estimate and the opinions expressed in this Report are that of Micon’s full-time employees or
Micon associates. For its services in preparing this Report, Micon is receiving a payment based
upon time and expenses and will not receive any capital stock from Davenport, East
Exploration GmbH or any other affiliated companies. Micon reimburses any of its associates
based upon time and expenses.
The principal consultants responsible for the mineral resource estimate of the Mühlhausen-
Keula sub-area of the Mühlhausen-Nohra mining licence, and the preparation of this report
have extensive experience in the mining industry, have appropriate professional qualifications
and are listed below:
• Stanley Bartlett, M.Sc., P.Geo., Micon Vice President, Senior Geologist and Managing
Director of Micon’s UK office, who reviewed the mineral resource estimate;
• Elizabeth de Klerk, M.Sc., Pr.Sci.Nat., SAIMM, Micon Senior Geologist, Project
Manager and Competent Person, who visited the site and reviewed the geological model
and mineral resource estimate, as well as the exploration history, geology and
mineralisation;
• Ekaterina Pelinkova, Micon Geologist, who compiled the geological model and mineral
resource estimate and reviewed the exploration history, geology and mineralisation;
• Andrew de Klerk, B.Sc. Pri.Sci.Nat., SAIMM Micon Senior Geologist, who managed
the exploration data, reviewed the mineral resource estimate and compiled the report;
• James Turner, B.Sc., M.Sc., CEng., MIMMM, Micon Senior Processing Engineer who
commented on the processing options; and,
• Sandra Stark, B.Sc., FGS, Micon Geologist, who reviewed the report.
2.3 DISCLAIMER
Whilst Micon has reviewed the exploration and mining licences, permits and entitlements of
the Project in so far as these may influence the investigation and development of the mining
assets, Micon has not undertaken any legal due diligence of the asset portfolio described in this
Report. The reader is therefore cautioned that the inclusion of exploration and mining
properties within this Report does not in any form imply legal ownership.
2.4 SOURCES OF INFORMATION
Various sources of information were accessed to prepare this report including:
• Structured and informal interviews conducted during the site visit with the management
and senior staff of Davenport, BVVG, Ercosplan and K-UTEC;
• Reports submitted to Davenport by Ercosplan on the historical data collation and
Exploration Target estimation for Ebeleben;
• The Ercosplan electronic drill-hole database held in Excel including information on
drill-hole collar, lithology, stratigraphy, chemical assay results, mineralogy and
geophysical results;
• Extensive scans of acquired historical exploration drill holes from K-UTEC which were
captured by Micon into the Project downhole database including stratigraphy, chemical
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assay results, mineralogy, plan maps, cross-sections and downhole geophysical logging
results;
• Existing electronic database of historical information including scans and photographs
of the Mühlhausen-Nohra mining licence original drill-hole logs as stored and captured
by Ercosplan including stratigraphy, chemical assay results, mineralogy, reserve
estimations according to Kali-Instruktion, plan maps, cross-sections and downhole
geophysical logging results including caliper, natural gamma, gamma-gamma,
resistivity and temperature; and,
• The original historical drill-hole information, where available, including drill-hole logs,
stratigraphic interpretation, chemical assay results, mineralogy, reserve estimations
according to Kali-Instruktion, plan maps, cross-sections and downhole geophysical
logging results including caliper, natural gamma, gamma-gamma, resistivity and
temperature.
2.5 UNITS OF MEASUREMENT
Quantities are generally stated in SI units, as utilised by international mining companies. These
include metric tonnes (t), million metric tonnes (Mt), kilograms (kg) and grammes (g) for
weight; kilometres (km), metres (m), centimetres (cm) and millimetres (mm) for distance;
cubic metres (m3) and million cubic metres (mm3), litres (l), millilitres (ml) and cubic
centimetres (cm3) for volume, square kilometres (km2) and hectares (ha) for area, weight
percent (%) for base metal grades, grammes per metric tonne (g/t) for gold and silver grades
and tonnes per cubic metres (t/m3) for density. Precious metal grades may also be expressed
in parts per billion (ppb) or parts per million (ppm) and their quantities may also be reported in
troy ounces (ounces, oz), a common practice in the mining industry. All currency amounts are
stated either in US dollars (US$) or Euros (EUR).
A glossary of terms and abbreviations are provided in Section 16.0.
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3.0 GENERAL INFORMATION
3.1 KALI-INSTRUKTION AND THE GKZ SYSTEM
All historical exploration of the Mühlhausen-Keula Project was conducted adhering strictly to
the German state procedures manual specific to potash exploration entitled ‘Instruktion zur
Anwendung der Klassifikation der Lagerstätten-vorräte fester mineralischer Rohstoffe vom 28.
August 1979 auf Kalisalz- und Steinsalzlagerstätten’, more commonly referred to as the Kali-
Instruktion (directly translated as ‘Potash Instruction’). The Kali-Instruktion was issued in
German in the former GDR and it is based on the established system developed and
administered by the Russian State Commission for Mineral Reserves (Gosudarstvennaya
Komissia po Zapasam - GKZ). The first Kali-Instruktion issued on the classification of
reserves regarding potash and rock-salt deposits (Stammberger 1956) was released in 1957
with revision in 1960 by Ulbrich containing detailed information about the sampling and
analytical procedures used as guidance by the former GDR State Geological Survey for potash-
bearing salt rocks. The latest revision was issued on 17th November 1981.
The Kali-Instruktion applied strict control over the estimation and reporting of mineral reserves
and utilised a prescribed protocol for their calculation that was usually based upon standard
sectional methods. Preliminary mineral reserve estimates, as completed by the licence holder,
were submitted to the GDR State Geological Survey for approval. These included the
justification of the cut-off grade criteria which were used to generate the mineral reserves.
In many respects the system is similar to western classification systems, essentially measuring
the level of confidence in quantity and quality information that is used to define the mineral
resources or reserves. One of the systems commonly adhered to in Western countries is the
JORC Code (the Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute
of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council
of Australia), which was released in 1989 and last updated in 2012.
In Micon’s experience, the level of detail required to support a submission of mineral reserves
to the GKZ or the State Geological Survey is more systematic and comprehensive than is
required under the JORC Code in almost all respects. The data submitted for approval are
subject to rigorous review, including consideration of the geological complexity of the deposit,
the distribution and complexity of the ore mineralogy, the degree of knowledge obtained from
exploration activities such as the density of drilling, the extent of any underground
development, the computation of resource estimates, cut-off grades, as well as numerous other
economic, technological, mining and metallurgical characteristics. The State Geological
Survey or the GKZ analyses the approach undertaken for calculations as well as mineral
resources and cut-off grade estimates.
The JORC Code and the Kali-Instruktion/GKZ reserve reporting systems share a very
important fundamental principle, which is that the economic viability of a reserve base must
be demonstrated. For this reason, both systems utilise a similar set of geological, economic
and technical factors within a sequential classification scheme which reflects the increasing
degree of knowledge and confidence in the integrity of the reserves. Figure 3.1 illustrates
Micon’s understanding of the correlation between the JORC Code and the GKZ systems.
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Figure 3.1: Comparison of GKZ and JORC Code Resource/Reserve Classification
Using the Kali-Instruktion/GKZ system, mineral resources and reserves are recognised as
either prognosticated resources, which include those resources that are of an inferred, potential
or speculative nature, or mineral reserves, which can be effectively sub-divided into those that
demonstrate economic significance (balance mineral reserves) and those with only potential
economic significance (off-balance mineral reserves).
Balance mineral reserves comprise that part of the mineralisation that has been demonstrated
to a sufficient level of confidence to contain a metal or commodity whose economic viability
has been approved by the Kali-Instruktion/GKZ. They may not however, include adjustment
for technical and economic matters such as mining dilution and losses.
The JORC (2012) classification term "mineral resources" approximately corresponds to the
term "geological reserves" from the German Kali-Instruktion and Russian GKZ systems. The
JORC (2012) term "ore reserves" approximately corresponds to the term "exploitation
reserves" from the German Kali-Instruktion and Russian GKZ systems.
The Kali-Instruktion/GKZ categories for balance mineral reserves (A, B, C1 and C2) can be
correlated by definition with mineral resources as defined under the JORC Code. Categories
A and B are generally reported as Measured resources, whilst category C1 generally constitutes
Indicated mineral resources, with C2 category as Inferred mineral resources. Under the Kali-
Instruktion/GKZ systems, C2 category mineral reserves can be included in mine-planning
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studies, but it should be noted that under the terms and conditions of reporting public
documents to Western standards, Inferred mineral resources cannot be included as ‘ore
reserves’ or used for formal valuation purposes.
By contrast, the classification of prognosticated resources (P1, P2, and P3) refers to mineral
resources that range from Inferred mineral resources, to potential and speculative resources.
These are not generally recognised as quantifiable in Western terms and can only be regarded
as indicators of the mineral potential of an area or region. Such resources may be subsequently
upgraded to recognised categories of reserves and resources by successful exploration work,
or excluded if the work is unsuccessful.
3.2 MICON APPROACH TO RESOURCE/RESERVE CLASSIFICATION
The classification of the mineral resources contained within this Report has been completed in
accordance with the guidelines of the JORC Code (2012). Similar to the system followed by
the Kali-Instruktion/GKZ, the JORC Code relies upon an increased level of geological
knowledge and the application of mining and other modifying factors to elevate those
categories of resources to reserves as summarised in Figure 3.2.
Figure 3.2: Exploration Results, Mineral Resources and Ore Reserves as Defined by the JORC Code
The JORC Code is similar in most respects to those systems adopted in North America and in
Europe, in particular the system of resource definition established by the Canadian Institute of
Mining, Metallurgy and Petroleum (CIM) and recognised under the guidelines of Canadian
National Instrument (NI) 43-101.
3.2.1 Mineral Resources
The relevant sections of the JORC Code are provided for reference as follows:
• A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic
interest in or on the Earth’s crust in such form, grade (or quality), and quantity that there
are reasonable prospects for eventual economic extraction. The location, quantity,
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grade (or quality), continuity and other geological characteristics of a Mineral Resource
are known, estimated or interpreted from specific geological evidence and knowledge
including sampling. Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured categories.
• An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity
and grade (or quality) are estimated on the basis of limited geological evidence and
sampling. Geological evidence is sufficient to imply but not verify, geological and
grade (or quality) continuity. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes.
An Inferred Mineral Resource has a lower level of confidence than that applying to an
Indicated Mineral Resource and must not be converted to Ore Reserves. It is reasonably
expected that the majority of Inferred Mineral Resources could be upgraded to Indicated
Mineral Resources with continued exploration.
• An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity,
grade (or quality), densities, shape and physical characteristics are estimated with
sufficient confidence to allow the application of Modifying Factors in sufficient detail
to support mine planning and evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable exploration,
sampling and testing gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological
and grade (or quality) continuity between points of observation where data and samples
are gathered.
An Indicated Mineral Resource has a lower level of confidence than that applying to a
Measured Mineral Resource and may only be converted to a Probable Ore Reserve.
• A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity,
grade (or quality), densities, shape and physical characteristics, are estimated with
confidence sufficient to allow the application of Modifying Factors to support detailed
mine planning and final evaluation the economic viability of the deposit.
Geological evidence is derived from detailed and reliable exploration, sampling and
testing gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes, and is sufficient to confirm geological and grade
(or quality) continuity between points of observation where data and samples are
gathered.
A Measured Mineral Resource has a higher level of confidence than that applying to an
Indicated or an Inferred Mineral Resource. It may be converted to a Proved Ore
Reserve or under certain circumstances to a Probable Ore Reserve.
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4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 PROPERTY DESCRIPTION
The Mühlhausen-Nohra mining licence is located in the German Federal State of Thuringia
located within the large-scale potash field known as Südharz, an area, which has been subjected
to multiple legal divisions, each of which is informally described as its own mining ‘field’.
Whilst not adjoining, the Mühlhausen-Nohra and Ebeleben (also owned by Davenport) mining
fields are considered as neighbouring as they are separated by an approximate 10 km gap in an
area where the now defunct Volkenroda potash mine is located.
In addition to the Mühlhausen-Nohra mining licence, Davenport has also been awarded the
Ebeleben and Ohmgebirge mining licences, together with the adjoining Küllstedt and
Gräfentonna exploration licences, all of which form the greater South Harz Potash Project
located in the north of Thuringia (Figure 4.1) in the central/north-western section of the
Thuringian Basin. The Mühlhausen-Nohra mining licence has an area of 141.6049 km2 and
has never been mined. The primary target is the Staßfurt potash seam of the potash-bearing
Zechstein Group (Upper Permian – Zechstein). The adjacent Volkenroda, Sollstedt,
Bleicherode and Kemstedt mining fields (Figure 4.2) have been historically mined since 1896
for the production of potash fertilisers and are currently being used as underground waste
storage facilities.
Due to the extent, shape and geological characteristics of the Mühlhausen-Nohra mining
licence, Micon has logically split it into two distinct sub-areas, each of which were separately
interpreted and modelled – a northerly Nohra-Elende sub-area and a southerly Mühlhausen-
Keula sub-area. This technical report presents the results of the mineral resource estimate for
the southern Mühlhausen-Keula sub-area (the Project) of the Mühlhausen-Nohra mining
licence area only.
4.2 PROPERTY LOCATION
The Mühlhausen-Keula sub-area (Figure 4.3) represents the southern half of the Mühlhausen-
Nohra mining licence, which is located in the northwest of the Federal State of Thuringia in
central Germany, approximately 50 km northwest of Erfurt, the largest city and state capital of
Thuringia (Figure 4.1). The Mühlhausen-Nohra mining licence is centred approximately on
51°21’15” N and 10°31’30” E. More specifically the Project straddles each of the Eichsfeld,
Nordhausen, Unstrut-Hainich and Kyffhäuserkreis Districts of the Thuringia. Each of the
capital towns of these districts flank the Project area and are located approximately 20 km from
the licence centre point.
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Figure 4.1: Regional Location Map of the South Harz Potash Project
(Source: Nations Online)
South Harz
Potash Project
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Figure 4.2: Location Map of the Davenport Mining and Exploration Licence Areas
Source: Davenport
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Figure 4.3: Nohra-Elende and Mühlhausen-Keula Sub-Areas of the Mühlhausen-Nohra Mining Licence
4.3 LICENCES
Davenport is the current owner of the Ebeleben, Mühlhausen-Nohra and Ohmgebirge mining
licences in addition to the neighbouring Gräfentonna and Küllstedt exploration licences (Figure
4.2). This technical report presents the results of the mineral resource estimate for the southern
Mühlhausen-Keula sub-area of the Mühlhausen-Nohra mining licence area only, excluding the
Mühlhausen-Nohra and Ohmgebirge mining licences as well as both the Gräfentonna and
Küllstedt exploration licences.
The Mühlhausen-Nohra mining licence was acquired by Davenport through an open tender
advertised by Bodenverwertungs- und verwaltungs GmbH (BVVG) and was successfully
awarded to its 100% owned locally registered subsidiary, East Exploration GmBH.
Davenport appointed CMS Hasche Sigle Partnerschaft von Rechtsanwälten und Steuerberatern
mbB (CMS) to conduct a detailed legal due diligence during the acquisition of the Ebeleben
mining property, the findings of which are summarised in Section 4.3.1.
4.3.1 Mining Rights
Preceding the delineation and issuance of the Mühlhausen-Nohra mining licence, the earlier
original and larger Südharz mining property had been demarcated prior to unification. This
Südharz mining property was internally sub-divided into separate ‘mining fields’, including
the likes of Mühlhausen-Nohra and Ebeleben.
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Due to the Südharz mining property having been issued pre-unification, it is today classified
as an ‘old mining property’ pursuant to Sec. 151 BBergG from which the Mühlhausen-Nohra
mining property was subsequently derived. As such, and in turn, the Mühlhausen-Nohra has
been classified as an ‘old mining property’, which was derived from the former East German
system.
This is an important legal consideration as exploration and mining properties issued in
accordance with the current-day German Federal Mining Act (Bundesberggesetz – BbergG)
are limited in time and are subject to royalty payments. In addition, the applicant and holder
are required to submit a work programme, any deviation from which can result in the rescission
of a mining right. In contrast to this, ‘old mining properties’ that were granted during the
former East Germany, and which have been confirmed by the relevant authority post the
reunification of Germany, are unlimited in time and are not subject to any royalty payments
with no supporting work programme required.
As such the Mühlhausen-Nohra mining field licence is perpetual in nature, not subject to expiry
and is valid to explore for and produce ‘potash, including (associated) brine’ with no applicable
statutory royalties. The Mühlhausen-Nohra Mining Licence Deed No. is 1077/95-611 and has
an area of 141.6049 km2.
The purchase agreement between BVVG and East Exploration GmBH was signed and
notarised on 15th August 2017. The transfer of the mining property was approved by the
Thuringian mining authority pursuant to Sec. 23 para. 2 sentence 3 BBergG on 18th October
2017.
Following approval of the transfer of the mining properties by the Thuringian mining authority
from BVVG to East Exploration GmBH, a staggered instalment payment system was agreed
upon. The final instalment payment was due on 9th May 2018. Following this payment East
Exploration GmBH were officially registered as the new owner of the Mühlhausen-Nohra
property in the public mining property registry, and the transfer of ownership was completed.
A summary of the details of the Mühlhausen-Nohra mining licence is presented in Table 4.1.
Table 4.1: Mühlhausen-Nohra Mining Licence
Licence
Name Type Deed No.* Commodity Validity Current Owner
Area
(km²)
Mühlhausen-
Nohra
Mining
(Old Mining
Property)
1077/95-611 Potash including
(associated) brine Perpetuity
East Exploration
GmBH ** 141.6049
Notes: * Berechtsamsurkunde No. - a mining legal document presented in the award of a mining property.
** East Exploration GmBH is 100% owned by Davenport Resources Ltd.
4.3.2 Surface Rights
Davenport do not own any of the surface rights across the Mühlhausen-Nohra mining licence.
4.4 ROYALTIES
All exploration and mining properties issued in accordance with the current German Federal
Mining Act (Bundesberggesetz – BbergG) are subject to royalty payments. However, because
the Mühlhausen-Nohra mining licence was granted during the former East Germany and has
been categorised as ‘old mining property’, it is not subject to any royalty payments.
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4.5 ENVIRONMENTAL LIABILITIES, LEGISLATIVE AND PERMITTING
REQUIREMENTS
The holder of a mining right has the exclusive right to explore and/or produce and to
appropriate the respective mineral resources in a certain field. However, all exploration and
production activities require a mining permit (Betriebsplanzulassung) to be applied for with
the mining authority.
In addition, environmental and water permits may also be required as well other permits, such
as deep drilling operations permission. Deep drilling operations require approval of the Federal
Office for the Safety of Nuclear Waste Management (BfE), which is responsible for preserving
geological formations that are potentially suitable for the storage of nuclear waste. All permits
can only be granted if the relevant statutory prerequisites have been met. Thus, holding a
mining right does not necessarily mean that the mineral resources can actually be explored or
produced until such time as the other supporting environmental permits have been granted.
4.6 MATERIAL AGREEMENTS
Micon is unaware of any other material agreements pertaining to the Mühlhausen-Nohra
mining licence.
4.7 OTHER SIGNIFICANT FACTORS AND RISKS
Micon is unaware of any other significant factors or risks associated with the Mühlhausen-
Nohra mining licence.
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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE
AND PHYSIOGRAPHY
5.1 PROPERTY ACCESS
Access to the Mühlhausen-Nohra mining licence is primarily via road. The Federal Autobahn
(A) A38 acts as the main access highway from both Berlin and Frankfurt and bisects the
northerly Nohre-Elende sub-area of the mining licences. Several nationally maintained
Bundesstraße (B) roads leading off the A38 traverse the area (B247), including numerous State
maintained Landesstraße (L) roads and country roads branching therefrom. Beyond these
roads, four-wheel drive vehicles can be used to access farm or country tracks.
The nearest tarred airport to the Project, which can accommodate charter planes is the
Obermehler-Schlotheim Airfield located adjacent to the town of the Schlotheim directly
between the Mühlhausen-Nohra and Ebeleben mining licences. The capital city of Germany,
Berlin, is located to the northeast (approximately 285 km) and the city of Frankfurt to the
southwest (approximately 245 km). Both the Berlin Tegel Airport (IATA: TXL) and the
Frankfurt Airport (IATA: FRA) are well serviced by frequent daily domestic and multiple
direct international flights across Europe and worldwide.
5.2 CLIMATE
The climate of Germany as a whole is classified as largely temperate to oceanic with generally
cold, cloudy and wet winters and warm wet summers with no consistent dry season. This is
due to Germany being situated between the oceanic climate of Western Europe and the
continental climate of Eastern Europe with the climate largely moderated by the North Atlantic
Drift, the northern extension of the Gulf Stream.
The Mühlhausen-Nohra mining licence is located within the Central Uplands, which has a
transitional climate that fluctuates between moderately oceanic and humid continental.
Winters are relatively cold with average highs of 2ºC and lows of -3ºC. Summers tend to be
warm, and at times humid, with average highs of 23ºC, although maximums can exceed 30ºC.
Precipitation averages 502 mm per annum, which falls throughout the year.
The climatic conditions are such that no specific operating season would be applicable and any
exploration or mining activities could be undertaken throughout the year. Micon does not
consider the climatic conditions to be a risk to the Project.
5.3 LOCAL RESOURCES AND INFRASTRUCTURE
Thuringia is the sixth smallest state in Germany and the fifth smallest by population, which is
supported by a modern and well-maintained infrastructure. As the most central state in
Germany, Thuringia is an important hub for road, rail and communication traffic with extensive
investment and upgrades in this infrastructure ensuring that it is modern and well maintained.
In general, the infrastructure of the region is modern and well-developed with several federal
and state roads connecting to federal motor-ways, and a regional railway network connecting
to the trans-regional railway network in the vicinity of the mining licence. Power supplies are
available for households, established commerce and industry via a well-developed grid
network. All of the state towns, especially the district capitals, are considered to be advanced
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modern towns with a developed infrastructure that includes shopping centres, hospitals and
clinics, schools and banking.
Thuringia State has a population density of approximately 130 people per km2 with numerous
towns and villages located both within or adjacent to the mining field. Each of the district
capital towns of Heilbad Heiligenstadt (Eichsfeld district), Nordhausen (Nordhausen district),
Mühlhausen (Unstrut-Hainich district) and Sondershausen (Kyffhäuserkreis district) are
approximately 20 km from the Mühlhausen-Nohra mining licence. The populations of these
district capitals are: Heilbad Heiligenstadt 17,000; Nordhausen 42,000; Mühlhausen 33,000
and Sondershausen 22,000. Erfurt the largest city and state capital of Thuringia has a
population of 206,000 and is 50 km southeast of the Mühlhausen-Nohra mining licence. All
basic services can be sourced from these towns.
Potash mining is an established industry in the region which has resulted in the ongoing
development of a skilled workforce in this regard. Supplies and personnel to conduct
exploration and mining activities can be sourced locally. Whatever cannot be sourced from
Erfurt or elsewhere in Thuringia, can be easily sourced from cities such as Berlin and Frankfurt.
5.4 PHYSIOGRAPHY
Generally, the physiography of Germany can be sub-divided into three distinct topographical
regions:
• Low-lying featureless and flat northern region, which forms a part of the North
European Plain;
• Central elevated hilly region which is at times rugged that is informally referred to as
the Central Uplands; and,
• High mountainous southern region which is characterised by mountain ranges such as
the Swabian Jura, Franconian Jura, Alps and the Black Forest.
The Mühlhausen-Nohra mining licence is located within the Central Uplands between the
North European Plain and the mountainous southern region. The topography in the area is
characterised by gently undulating hills, which are often forested and interspersed by narrow
slow-flowing rivers and streams. The Mühlhausen-Keula sub-area has a high point of 535 m
along the Dün Ridge in the north and a low point of 212 m in the southeast, close to the town
of Mühlhausen.
5.5 FLORA AND FAUNA
The original natural vegetation of the Mühlhausen-Nohra mining licence, and the Thuringia
state as a whole, was beech and spruce forests. However due to centuries of intensive
settlement most of the area has been shaped by human influence. Protected natural tracts of
these forests do still exist, as can be found across the Hainich forested hill chain and the Dün
Ridge across the Project area and these form part of the greater Eichsfeld-Hainich-Werratal
Nature Park. Some of these protected areas have been granted national park status to ensure
the protection of the unique beech forest fauna and flora communities synonymous with the
area. This includes populations of ash trees, hornbeams, maples, lindens, and occasional
checker trees which, amongst other species, support populations of wild cats, 15 species of bats
and seven species of woodpecker.
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6.0 REGIONAL GEOLOGY
6.1 DEPOSIT TYPES
The deposits within the Mühlhausen-Nohra mining licence are formally classified as evaporites
within the South Harz Potash District which forms a part of the Upper Permian Zechstein
Group.
The deposits of the Zechstein Group were formed within the Zechstein Sea, a partly barred
large basin with relict sea characteristics. The barriers were totally breached on at least four
occasions allowing mass influxes of oceanic water followed by regression and prolonged
sequential desiccation. Initially the deposits at the base of each sequence were limestones, now
dolomitised marls and shales all of supratidal to relatively deep-water origins. These grade
vertically and laterally into sulphate and chloride beds. Evaporite sub-cycles show a gradual
vertical change from the least soluble calcium salts at the base (calcite, gypsum and anhydrite)
followed by halite and polyhalite and lastly potassium and magnesium salts at the top (sylvite,
carnallite, kainite and kieserite).
The Zechstein Group consists of seven depositional cycles with the potash mineralisation of
the South Harz Potash District hosted within the second cycle, the Staßfurt Formation,
specifically the Kaliflöz Staßfurt lithostratigraphic horizon (z2KSt). Locally, potash
mineralisation also occurs within the salt rocks of the Staßfurt-Steinsalz horizon (z2NA).
Remnants of potassium salts are also present in the salt rocks of the lithostratigraphic
Decksteinsalz (z2NAr) horizon. No commercially mineable concentrations within the salt
rocks of the Staßfurt-Steinsalz unit (z2NA) have been identified yet.
The main potash minerals present in the deposits are carnallite and sylvite; chemical analyses
performed on samples confirm the occurrence of polyhalite and subordinate kieserite,
langbeinite, glaserite and anhydrite. The sylvite is of secondary origin, which leads to the
assumption that the primary carnallite was influenced by brines. A primary origin is assumed
for carnallite and polyhalite.
The majority of the potash deposits have been altered by intruding water or basalt causing
plastic deformation resulting in the potash horizons being forced upwards into the overlying
strata. Extensive faulting and water intrusion have caused alteration or dissolving of the
deposited potash, therefore strata within the Zechstein Group are highly variable.
6.2 REGIONAL GEOLOGY AND STRUCTURAL SETTING
The Südharz (South Harz) Potash District is located in the north-western extent of the
Thuringian sedimentary basin, which has been separated by the uplift of the northerly Harz
Mountains from the South Permian Basin (SPB). The South Permian Basin comprises an area
from England to Eastern Poland with flanking areas within Denmark and the South Baltic Sea
in the north and the upland regions of Belgium and Germany to the south.
The regional stratigraphy of the South Permian Basin is well understood with a
pre-Variscan basement (Upper Carboniferous and older rocks) and a transition horizon of
Upper Carboniferous to Lower Permian lying beneath an expansive sequence of evaporite
rocks of the Upper Permian succession. These evaporite deposits are assigned to the Zechstein
Group, and host the target potash mineralisation of the South Harz Potash District, which
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occurs on both the Mühlhausen-Nohra and Ebeleben mining licences. In the hanging wall of
the evaporite rocks of Upper Permian age, the rocks of the German Triassic Supergroup follow,
consisting of sandstones, siltstones, clays and carbonate rocks and along with subordinate
amounts of evaporite rocks. The potash-bearing target Zechstein Group consists of seven
depositional cycles with the potash mineralisation of the South Harz Potash District hosted
within the second cycle, the Staßfurt Formation.
The majority of the potash deposits have been altered by intruding water or basalt that caused
plastic deformation. The potash horizons were forced upwards into the overlying strata.
Extensive faulting and water intrusion have caused alteration or dissolution of the potash,
therefore strata within the Zechstein Group are highly variable.
Generally, the deposit bedding is assumed to be undulating with an even dip over large
distances. Local differences may occur in areas influenced by tectonic structures.
6.3 LOCAL GEOLOGY
Potash mineralisation is present within the Staßfurt-Steinsalz and Kaliflöz Staßfurt evaporite
horizons of the Staßfurt Formation. In the South Harz Potash District commercially mineable
concentrations of potassium salts occur normally within the Kaliflöz Staßfurt lithostratigraphic
horizon. Rock-salt “barren” zones above the sylvinite are a common feature of the Kaliflöz
Staßfurt potash-bearing horizon (Table 6.1).
In the South Harz Potash District polysulphatic sylvinite was encountered in the western and
southern boundary areas of the deposit, particularly in the Volkenroda and Bischofferode mines
(Figure 4.2), and also in the Küllstedt exploration licence area. Otherwise, almost only mono-
sulphatic ‘anhydritic sylvinite’ occurs, which surrounds the large barren zones of the Potash
District.
The Zechstein Group (Figure 6.1) has been split into four main economic series that occur
within the Mühlhausen-Nohra mining licence. In stratigraphic order they are as follows:
• Z4 Aller Formation;
• Z3 Leine Formation;
• Z2 Staßfurt Formation; and,
• Z1 Werra Formation.
Pure sylvinite with some carnallite is only found in the upper Z3 and Z4 potash beds across
parts of England (e.g. Boulby Mine), northern Germany and the Netherlands. Some localised
pure sylvinite, but mostly mixed sulphate and potash salts, also known as hartsalz are found in
the Z1 and Z2 potash beds of central Germany, parts of northern Germany and Poland. The
Mühlhausen-Nohra mining licence is located in an area where the Z2 potash beds have been
historically mined (Figure 4.2). The target potash bed is locally known as the Kaliflöz Staßfurt
horizon (z2KSt), where the term ‘Kali’ is the local German term for Potash.
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Table 6.1: Zechstein Series Geology (after Ercosplan, Jan 2018)
Formation Thickness
(m) Horizon Rock Types
Ohre-bis Fulda-
Formation 0.0 to 13.0 "Obere Zechsteinletten" (z4Tb-z7) Siltstones and claystones with minor anhydrite and carbonates.
Aller Formation
(Z4)
0.3 to 14.0 Oberer Aller-Anhydrit (z4ANb) White to flesh red anhydrite partly converted to gypsum.
9.0 to 21.4 Aller-Steinsalz unit (z4NA) Colourless to milky halite with subordinately occurring anhydrite.
0.0 to 2.4 Unterer Aller-Anhydrit (z4ANa) Light grey anhydrite with halite intergrowth in the subrosion-free areas, and
light grey to white anhydrite in areas influenced by subrosion.
0.0 to 9.5 “Roter Salzton” Unterer Aller-Ton (z4Ta) red coloured salt clays.
Leine
Formation (Z3)
Oberer Leine-Ton (z3Tb) red coloured salt clays.
34.2 to 71.0 Leine-Steinsalz (z3NA) Halite, anhydrite and subordinate clay.
23.0 to 51.0 Leine-Anhydrit (z3AN) Blue-grey anhydrite rocks with subordinate limestone and clay inclusions.
0.0 to 6.0 Leine-Karbonat (z3CA) Dolomite.
5.5 to 20.5 “Grauer Salzton” (z2Tb-z3Ta)
Unterer Leine-Ton unit (z3Ta) - Grey sediments with clay content
increasing up the unit and evaporite content decreasing.
Staßfurt
Formation (Z2)
Oberer Staßfurt-Ton unit (z2Tb) - Grey sediments with clay content
increasing up the unit and evaporite content decreasing.
0.0 to 4.5 Deckanhydrit (z2ANb) Anhydrite rocks extensively altered by leaching processes, containing relict
potash minerals and structures.
0.0 to 4.1 Decksteinsalz (z2NAr) Halite and anhydrite rocks altered by leaching processes, containing relict
potash minerals and structures.
1.4 to 39.5 Kaliflöz Staßfurt (z2KSt)
Hanging Wall Group - Horizons 11 to 19 finely layered potassium salts.
Footwall Group - Horizons 1 to 10 coarsely layered potassium salts and
thick halite layers.
6.0 to 111.3 Staßfurt-Steinsalz (z2NA)
Oberes Südharzsteinsalz - Grey or yellow-red halite and anhydrite, locally
contains polyhalite, kieserite, sylvite and carnallite in the form of nests or as
fissure fillings.
Unteres Südharzsteinsalz - Grey or yellow-red halite and anhydrite, locally
contains polyhalite, kieserite, sylvite and carnallite in the form of nests or as
fissure fillings.
Anhydritisches Steinsalz - Rock-salt. Kieseritic horizon in the
Sondershausen and Bleicherode areas.
0.7 to 28.5 Unterer Staßfurt-Anhydrit
(z2ANa)
Blue-grey to dark grey anhydrite rocks with a low percentage of carbonate
and inclusions of halite in its upper portions. Also known as Staßfurt-
Basananhydrit.
24.5 to 52.5 Staßfurt-Karbonat (z2CA) Light grey-brown dolomite with subordinate layers of anhydrite, also
hydrocarbon bearing.
Werra-
Formation (Z1)
2.1 to 172.5 Oberer Werra-Anhydrit (z1ANc) Anhydrite rocks.
0.0 to 0.0 Werra-Steinsalz (z1NA) Salt rocks.
0.0 to 0.0 Unterer Werra-Anhydrit (z1ANa) Anhydrite rocks.
2.0 to 2.0 Werra-Karbonat (z1CA) Limestones.
0.0 to 0.0 Unterer Werra-Ton
(Kupferschiefer) (z1T) Dark grey heavy metal-bearing clays.
0.0 to 0.0 Zechsteinkonglomerate (z1C) Grey carbonate cemented conglomeratic sandstones.
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Within the potash-bearing Staßfurt-Steinsalz and Kaliflöz Staßfurt evaporite horizons at
Mühlhausen-Nohra, different evaporite minerals occur, changing in their abundance both
horizontally as well as vertically. The fine rock-salt and clay seams usually remain constant.
The potash-bearing seam is developed over the entire Mühlhausen-Nohra mining licence area
(Figure 6.1).
The potash-bearing horizon is developed over the entire Mühlhausen-Keula sub-area, which is
relatively flat lying with localised undulations. Regional folding is known, whilst locally it
displays varying thicknesses and K2O grades. The bedding shows in general wide alternating
syn- and anticlines with, especially within the saliferous horizons. Faults and folds as well as
local thinning and thickening of the potash bearing horizon are observed. In general, a more
even and less complex structure is present.
Figure 6.1: Geological Map of the Mühlhausen-Nohra Mining Licence Area
Source: Davenport
6.4 MINERALISATION
Within the Kaliflöz Staßfurt horizon (z2KSt) the original potash-bearing salt rocks were
relatively evenly deposited as kieseritic carnallitite with the original mineralisation consisting
of carnallite (55% - 60%), halite (25% - 30%) and kieserite (10% -14%). Soon after the
deposition of the carnallitite, mineral conversion processes commenced. This was due to the
high solubility and reactivity of the salt minerals as the units underwent diagenesis in changing
chemical environments. Ascending brines were able to flow through the still relatively porous
and un-compacted evaporates, and as these brines were usually under-saturated in potassium
salts, they removed their components in the order of decreasing solubility, accompanied by the
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generation of new minerals in the affected areas. Carnallite was converted to sylvite via the
removal of magnesium chloride (MgCl2). Dissolution of sylvite, the main potassium salt in
sylvinite, produced barren rocks. Kieserite has a relatively low solubility and was converted
to alkaline-bearing sulphates (Mg, Ca, K and Na).
The movement of these brines therefore has led to significant restructuring of the original
evaporite rocks via dissolution and recrystallization, resulting in different thicknesses of potash
minerals spatially with depth and laterally. The process of dissolving soluble rocks
underground via under-saturated solutions, with the removal of the dissolved material and the
insoluble parts of these rocks being left behind, is known as subrosion.
The evaporite rock types occurring within the Staßfurt-Steinsalz and Kaliflöz Staßfurt
evaporite horizons of the Mühlhausen-Nohra mining licence are detailed in Table 6.2 along
with the associated mineral components.
Table 6.2: Evaporite Rock Types within the Mühlhausen-Keula Sub-Area
Ore Type Description Minerals Formula Comments
Carnallitite
Most abundant ore
type within the potash
target horizon.
Contains the lowest
mineralogical
variability.
→ I
n o
rder
of
incr
easi
ng
occ
urr
ence
→
Carnallite KMgCl3∙6(H2O) Primary potassium-
bearing mineral
Halite NaCl -
Kieserite MgSO4·H2O -
Anhydrite CaSO4 Subordinate
Clays Various Rarely occurring
Boracite Mg3B7O13Cl Rarely occurring
Goethite Fe3+O(OH) Finely dispersed as red
colour pigments Haematite Fe2O3
Sylvinite
Sylvinite deposits are
usually spatially
linked to barren zones
where it is arranged
between these zones
and the carnallitite
zones. Generally,
there is a high to very
high variability in the
mineralogy of the
sylvinite and is
locally termed as
‘Hartsalz’ due to its
hardness.
Halite NaCl Primary mineral
Sylvite KCl Primary potassium-
bearing mineral
Polyhalite K2Ca2Mg(SO4)4·2H2O -
Langbeinite K2Mg2(SO4)3 -
Kainite KMg(SO4)Cl·3H2O -
Kieserite MgSO4·H2O -
Anhydrite CaSO4 -
Clays Various -
Glaserite K3Na(SO4)2 Occur together as
irregular admixtures in
small concentrations
Boracite Mg3B7O13Cl
Pyrite FeS2
Rock-Salt
Barren Zones
occurring within,
above or below the
sylvinite
Halite NaCl Primary mineral
Anhydrite CaSO4 Often the only
accompanying mineral
Polyhalite K2Ca2Mg(SO4)4·2H2O Local occurrences only
The mineralised horizon of the Mühlhausen-Keula sub-area hosts four distinct seams, which,
from a modelling perspective, have been named according to their stratigraphic position: Upper
Sylvinite, Upper Carnallitite, Lower Carnallitite and Lower Sylvinite. The middle carnallite
sequence has been split into an Upper and a Lower sequence as it is consistently separated in
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this southerly region of the Mühlhausen-Nohra mining licence by an 8 m thick rock salt
sequence. This differs from previous modelling approaches, which treated the entire carnallite
sequence as a single uniform later instead of splitting into an upper and a lower seam.
6.5 ECONOMIC MINERALS
The cut-off grade for potash deposits is variable depending on the mineralisation and the MgCl2
content contained within the carnallite. High-grade potash minerals include sylvite and
carnallite. These deposits produce a concentrate referred to as Muriate of Potash (MOP) and
often generate halite as a by-product. The halite can be sold for salting roads or made into a
paste and used as backfill. A typical potash project will, at best, breakeven on selling the halite
as a by-product.
High-grade sulphate minerals include kieserite, kainite and polyhalite. Sulphate-rich deposits
produce a concentrate referred to as Sulphate of Potash (SOP). SOP and MOP must be reported
separately in resource estimates.
Insoluble material (‘insols’) is also associated with potash deposits, which include anhydrite,
clay and dolomite. This material downgrades potash deposits and can render processing to be
complicated. As such, it is important to understand the amount and composition of the
insoluble material. A typical potash resource statement will report percentages of the
following, where K2O represents the deposit grade:
• K2O;
• K;
• Mg;
• Na;
• SO4; and,
• Insols.
The resource statement must present grade, tonnage and tonnage of potash.
6.5.1 Sylvinite – ‘Hartsalz’
From the Mühlhausen-Nohra mining licences the potash-bearing evaporite target horizon has
historically been termed “hartsalz”, a common miner’s term for the locally occurring potash-
bearing evaporite rocks. This is due to the primary ore horizon containing sylvite along with
other potash sulphate minerals such as langbeinite, kainite, arcantite, and non-potash minerals
such as kieserite. These minerals render the ore to be much “harder” than ‘conventional’
sylvinite. The hartsalz also demonstrates a highly variable mineralogy.
Generally, the mineralogy of sylvinite is highly variable and as such the ‘hartsalz’ is not truly
“sylvinite” rock as per its definition of being composed of the minerals sylvite and halite. The
main mineral of the ‘hartsalz’ is halite (NaCl) with sylvite (KCl), the main potassium bearing
mineral. In addition, anhydrite (CaSO4), kieserite (MgSO4·H2O), glaserite (K3Na(SO4)2),
polyhalite (K2SO4·MgSO4·2CaSO4·H2O) and other clays mineral along with minor boracite
(Mg3B7O13Cl) and pyrite (FeS2) may be present. In the South Harz Potash District, the sylvinite
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mainly occurs as monosulphatic “anhydritic sylvinite” and these deposits surround large barren
zones of the Potash District.
At Muhlhausen-Keula it appears there is a relatively elevated amount of glaserite in the
modelled sylvinite seam. This became apparent when the amount of potassium (K) in the K2O
did not have a direct relationship when converted to KCl. This is discussed in more detail in
section 10.3.
Where both potash-bearing rock types are present at the Project, the ‘hartsalz’ sylvinite
typically occurs at the top and or/base of the carnallitite. The ‘hartsalz’ above the carnallitite
is distributed over almost the entire Mühlhausen-Keula sub-area, whilst the ‘hartsalz’ below
the carnallitite occurs irregularly.
6.5.2 Carnallitite
This is the most abundant economic potassium rock type in the South Harz Potash District,
which consists mainly of carnallite (KCl·MgCl2·6H2O); the main potassium mineral,
accompanied by halite and kieserite with subordinate anhydrite and rarely clay and boracite.
Iron-bearing minerals (haematite) and occasionally goethite appear finely dispersed as red
colour pigments. Carnallitite occurs most often in terms of area, compared to other evaporite
rocks in the potash-bearing horizons, with the comparably lowest mineralogical variability of
all the evaporite rocks. Carnallitite has a lower percentage of K2O compared to sylvinite.
Carnallitite is very brittle and weak and as a result, all underground shafts into carnallite areas
must be backfilled, as subsidence is a critical concern.
Throughout the Mühlhausen-Keula sub-area the carnallite occurs predominantly in the middle
portion of the Project area, whilst sylvinite is more widespread.
6.5.3 Rock-Salt
Rock-salt is composed mainly of halite, often only accompanied by anhydrite. Polyhalite and
kieserite may occur locally (e.g. in the Bischofferode mine). Zones of rock-salt are also
referred to as barren zones. These zones comprise partly the complete profile of the potash-
bearing horizon, but can also only affect parts of it, either below, within or above the potash-
bearing horizon in varying combinations. Barren zones above the potash-bearing horizon are
a common feature of the Kaliflöz Staßfurt horizon.
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7.0 HISTORICAL EXPLORATION
7.1 HISTORY OF THE SOUTH HARZ POTASH DISTRICT
Potash mining in the South Harz Potash District commenced with the sinking of the first
exploration drill hole in 1888 near the town of Kehmstedt in the north of Thuringia. Results
from this drill hole proved the existence of potash-bearing salt rocks in the south of the Harz
Mountains, resulting in extensive exploration for potash commencing across the region. This
exploration was initiated by the Prussian State and private investors. The early exploration
campaign culminated in the development of multiple small and medium-sized potash mines.
Table 7.1 Historically Significant South Harz Potash District Mines
Mine Name Operating
Date
Date of
Decommissioning
Total
Production
(Mt)
Current
Owner Comment
Sondershausen 1896 to 1991 31st December 1991 110 GSES Since 2004 production of rock salt
for de-icing salt (~200kt)
Bischofferode 1911 to 1993 31st December 1993 114 LMBV -
Sollstedt 1905 to 1991 31st December 1991 85 NDH-E -
Bleicherode 1902 to 1990 31st December 1991 86 NDH-E -
Volkenroda 1909 to 1991 31st December 1991 55 LMBV Since 2007 utilisation of mine gas for
generation of electricity
Between 1920 and 1950 several of the existing potash operations had started to flood, which
under state resolution were put under the owernship of the remaining operating potash
companies/operators/consortia? in the South Harz Potash District. Furth consolidation of
potash producing sites in the South Harz Potash District resulted in the remaining potash
operations being combined into the VEB Kaliwerke Südharz which controlled the remaining
six separate producing units as detailed in Table 7.1 above, along with Roßleben, located in the
Unstrut Potash District.
During this time the mining law was re-written and the resulting sub-fields (i.e. a defined area
with a reasonable prospect for mining) were summarised as BWE Thüringen Nord. Today’s
classification of the mine property fields (or BWE) in the South Harz Potash District is based
upon this earlier re-organisation, where the mine property fields were created by sub-dividing
the former sub-fields.
During operation of the South Harz Potash District mines (Table 7.1), the GDR was one of the
top three producing countries in the world, with a steady increase of produced K2O tonnage
from 1,336 kt K2O in 1950 to 3,510 kt K2O in 1988. The potash mines in the South Harz
Potash District contributed approximately 43% of the GDR production (in 1985) with the
extraction of the potash ore mainly carried out by conventional underground mining
techniques.
By resolution of the board of directors of the Mitteldeutsche Kali AG, the last active mines and
potash processing plants (Table 7.1) were decommissioned in 1991 and 1993. Most of the
geological documentation was in-complete at the time of decommissioning, and what was
available was handed to the trust company Gesell-schaft zur Verwahrung und Verwertung von
Bergwerksbetrieben (GmbH).
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Today potash is produced in the South Harz Potash District only from the BWE Kehmstedt and
Kehmstedt-NW-owned Kehmsted operation via solution mining techniques.
7.2 HISTORIC OWNERSHIP
Early exploration was initiated by the Prussian State and private investors with the VEB
Kaliwerke Südharz assuming ownership of the five key producing units of the South Harz
Potash District (Table 7.1).
In September 1990 the competent authority of the German Democratic Republic (East
Germany) granted the Südharz mining property to the state-owned agency of Treuhandanstalt
(later renamed Bundesanstalt für vereinigungsbedingte Sonderaufgaben (BvS)) that was
responsible for the privatisation of state-owned industry and commercial assets.
Following the reunion of the Federal Republic of Germany (West Germany) and East Germany
on 3rd October 1990, doubt was cast over the validity of the Treuhandanstalt owned Südharz
mining property. Validity of the mining property was confirmed by the newly appointed
Federal Republic of Germany competent mining authority in February 1991, with the Südharz
mining property being classified as an ‘old mining property’ pursuant to Sec. 151 BBergG,
which remains continuously valid to its original extent.
The original larger all-encompassing Südharz mining property has since been sub-divided into
several smaller legal mining licences, mainly between February 1993 and December 1995,
resulting in the formation of several smaller ‘mining fields’, amongst which were the Ebeleben
and Mühlhausen-Nohra mining licences.
In 2002 BvS transferred all of the newly-formed Südharz mining licences to its subsidiary
BVVG whose mandate it was to privatise state-owned agricultural and forestry land as well as
mining rights in the territory of the former East Germany.
7.3 SOURCE DATA
During the 1950s and 1960s an internal company standard for processing historical and recent
exploration data was established in the mines of the South Harz Potash District. The purpose
of the standard was to evaluate several parameters of the deposit, such as its thickness,
distribution and structure, which were missing from previous records. Until then the geological
documentation was prepared according to different degrees of detail depending on which group
of companies the individual mine was affiliated with. By 1964 this framework had been set,
and geological documentation was collected and processed according to this newly-established
framework during the following years.
After German reunification, the Kali-Umwelttechnik GmbH was established in 1992 as a
successor of the Kaliforschungsanstalt that had successfully developed the patents pertaining
to potash processing from the end of the Second World War. Its role was to continue the
research in the field of potash mining and processing. Since 2008, the Kali-Umwelttechnik
GmbH has been known as K-UTEC AG Salt Technologies.
Geological data pertaining to the Mühlhausen-Nohra mining licence is historical. The
historical data was supplied to Micon as scans of the original drilling information sourced from
BVVG, Ercosplan and K-UTEC, as well an existing Excel database previously compiled by
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Ercosplan from its archived data sources. The scanned data was verified by Mrs. de Klerk at
both the BVVG and Ercosplan during the site visit.
In addition to the above, various other sources of information were used by Micon to evaluate
Mühlhausen-Nohra, including:
• Structured and informal interviews conducted during the site visit with the management
and senior staff of Davenport, BVVG, Ercosplan and K-UTEC;
• Reports submitted to Davenport by Ercosplan on the historical data collation and
Exploration Target estimation for Mühlhausen-Nohra;
• The Ercosplan electronic drill-hole database held in Excel, including information on
drill-hole collar, lithology, stratigraphy, chemical assay results, mineralogy and
geophysical results;
• Electronic database of historical information including scans and photographs of the
Mühlhausen-Nohra original drill-hole logs, stratigraphic interpretation, chemical assay
results, mineralogy, reserve estimates according to Kali-Instruktion, plan maps;
• Cross-sections and downhole geophysical logging results including caliper, natural
gamma, gamma-gamma, resistivity and temperature; and,
• The original historical drill-hole information, where available, including drill-hole logs,
stratigraphic interpretation, chemical assay results, mineralogy, reserve estimates
according to Kali-Instruktion, plan maps, cross-sections and downhole geophysical
logging results including caliper, natural gamma, gamma-gamma, resistivity and
temperature.
7.4 EXPLORATION
The first recorded evidence of exploration drilling on the Mühlhausen-Nohra mining licence is
from drill hole Kal Möhrbach 1/1890, drilling of which commenced in 1889, following the
completion of which a further 14 drill holes were drilled during the 1890’s. Following this
initial phase of exploration in the Mühlhausen-Nohra mining licence, exploration activities
were intermittent up to 1984, targeting two primary commodities:
• Potash, hosted by the potash-bearing salt rocks of the lithostratigraphic unit Kaliflöz
Staßfurt (z2KSt); and,
• Natural gas and crude oil, hosted by the carbonate rocks of the lithostratigraphic unit
Staßfurt-Karbonat (z2CA).
The proximity of the Mühlhausen-Nohra mining licence to the Volkenroda Mine rendered it to
be considered a prospective extension to the mine and mine life, and therefore was regarded as
a strategic property with respect to the development of the potash industry in the former GDR.
As such the majority of the historical exploration drilling on the Mühlhausen-Nohra mining
licence was conducted by the GDR, targeting potash during various campaigns, primarily in
the 1970s. Various state institutions were involved during these campaigns; institutions which
were merged after reunification to form the VEB Kombinant.
All historical exploration was conducted adhering strictly to the German state procedures
manual specific to potash exploration entitled ‘Instruktion zur Anwendung der Klassifikation
der Lagerstätten-vorräte fester mineralischer Rohstoffe vom 28. August 1979 auf Kalisalz- und
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Steinsalzlagerstätten’, commonly referred to as Kali-Instruktion (directly translated as ‘Potash
Instruction’).
The drill-hole database considered for the Mühlhausen-Keula sub-area consists of 57 drill holes
made up of 18 hydrocarbon exploration drill holes and 39 diamond core potash exploration
drill holes (Table 7.2). Not all the drill holes considered for modelling are located exclusively
within the licence area. A total of 28 of the 57 Project drill holes are located outside and
adjacent to the licence boundary (Figure 4.3), but sufficiently close such that they have been
deemed to have a material impact in the geological modelling and mineral resource estimation
process. The data from these outlying drill holes has been sourced and purchased by Davenport
from K-UTEC.
The Project database is considered to be incomplete with various drill holes missing various
corresponding downhole data sets, as summarised in Table 7.2. This is due to the historical
data having been partially sourced with the unsourced data, either considered as being stored
at an as yet undetermined location, or having been lost/destroyed. All holes were drilled
vertically on the Project. Table 7.3 provides an overview of the holes drilled on the
Mühlhausen-Keula sub-area of the Mühlhausen-Nohra mining licence and their mineralised
intersections. Acquisition and capture of this missing data remains an ongoing priority task by
Davenport.
Table 7.2: Mühlhausen-Keula Sub-Area Drill-Hole Database Summary
Location Hole
Category No. Collar Geology Min Chem
Downhole Geophysics
Calliper Gamma Gamma-
Gamma
Neutron-
Gamma
Within
Licence
Hydrocarbon 6 6 6 0 0 6 6 2 6
Potash 23 23 22 22 22 16 17 0 0
Sub-Total 29 29 28 22 22 22 23 2 6
Adjacent
to
Licence
Hydrocarbon 12 12 11 0 1 0 0 0 0
Potash 16 16 14 10 13 0 0 0 0
Sub-Total 28 28 25 10 14 0 0 0 0
Total Hydrocarbon 18 18 17 0 1 6 6 2 6
Potash 39 39 36 32 35 16 17 0 0
TOTAL 57 57 53 32 36 22 23 2 6
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Table 7.3: Exploration Drill Holes within the Mühlhausen-Keula Sub-Area
Hole ID Location Easting
(UTM 32N)
Northing
(UTM 32N)
EOH
(m)
From
(m)
To
(m)
Width
(m)
K2O
(%)
E Kai 1/1959 Off Licence 603503 5680159 1055.40 No assay, no geophysical data
E KuSo 2/1961 Licence 605398 5685454 1037.20 876.51 880.47 3.96 13.30
E KuSo 2/1961 Licence 605398 5685454 1037.20 899.50 907.57 8.07 10.04
E KuSo 3/1962 Licence 607021 5685357 1546.60 865.70 877.40 11.70 12.18
E KuSo 4/1961 Licence 605419 5686263 1056.40 900.20 904.80 4.60 12.18
E Kued 1/1966 Off Licence 593368 5681713 985.30
No chemistry or geophysical data
E Mh 05/1934 Off Licence 604194 5680148 1258.40
E Mh 18/1958 Off Licence 603205 5678308 1077.00
E Mh 24/1960 Off Licence 604934 5679855 1582.10
E Mh 25/1960 Off Licence 605938 5680499 1516.00
E Mh 27/1960 Off Licence 603030 5679174 1039.00
E Mh 28/1960 Licence 602289 5680780 1274.15
E Mh 28/1960 Licence 602289 5680780 1274.15 960.06 963.81 3.75 13.30
E Mh 28/1960 Licence 602289 5680780 1274.15 966.36 973.79 7.43 8.15
E Mh 30/1961 Off Licence 602572 5680134 1078.50 967.20 970.00 2.80 14.50
E Mh 31/1962 Licence 602201 5679279 1320.90 960.60 967.76 7.16 12.18
E Mh 31/1962 Licence 602201 5679279 1320.90 967.76 977.76 10.00 8.72
E SfMh 1/1959 Off Licence 606982 5681958 1043.00
No chemistry or geophysical data E SosMh 1/1962 Off Licence 603251 5685286 1011.00
E SosMh 2/1962 Off Licence 601002 5686931 968.20
E Wttl 1/1962 Licence 607308 5688545 963.50 859.25 864.14 4.89 13.30
E Wttl 2/1962 Off Licence 608958 5687483 1343.20 No chemistry or geophysical data
Kal Amr 1/1976 Licence 601756 5677433 1061.47 1020.45 1028.84 8.39 8.93
Kal Amr 1/1976 Licence 601756 5677433 1061.47 1034.14 1038.66 4.52 8.07
Kal Beb 001/1961 Off Licence 597382 5683314 965.50 No chemistry or geophysical data
Kal Bic 1/1975 Off Licence 593249 5680102 951.04 900.28 903.75 3.47 11.63
Kal Bic 1/1975 Off Licence 593249 5680102 951.04 912.03 915.10 3.07 6.06
Kal Bic 1/1975 Off Licence 593249 5680102 951.04 926.76 929.84 3.08 6.17
Kal Bic 2/1975 Off Licence 595169 5679835 1036.75 903.47 905.36 1.89 10.75
Kal Bic 3/1976 Licence 595199 5677847 982.56 917.00 923.06 6.06 12.30
Kal Bic 4/1976 Off Licence 593269 5677828 933.71 903.48 904.25 0.77 9.30
Kal Dad 1/1975 Licence 600926 5680874 1004.30 958.84 976.10 17.26 8.96
Kal Dad 1/1975 Licence 600926 5680874 1004.30 982.30 985.75 3.45 5.99
Kal Dad 2/1975 Licence 600578 5679497 1020.45 976.58 986.47 9.89 9.72
Kal Dad 2/1975 Licence 600578 5679497 1020.45 995.00 999.99 4.99 6.28
Kal Ero 1/1965 Licence 600997 5682707 1003.50 946.50 953.05 6.55 10.77
Kal Ero 1/1965 Licence 600997 5682707 1003.50 954.20 958.60 4.40 6.52
Kal Ero 2/1976 Off Licence 601705 5684091 994.50 960.27 964.10 3.83 10.79
Kal Ero 3/1977 Off Licence 599442 5684129 1008.00 945.28 946.79 1.51 17.13
Kal Ero 3/1977 Off Licence 599442 5684129 1008.00 983.66 985.31 1.65 5.86
Kal Fef 18 Off Licence 600742 5687353 882.00 841.90 872.10 30.20 10.24
Kal Fef /007 Off Licence 601812 5689578 561.60 No chemistry or geophysical data
Kal Fef /011 Off Licence 601834 5689529 633.00 570.28 628.28 58.00 10.55
Kal Holla 001/1975 Licence 597797 5676908 995.55 961.86 975.37 13.51 10.13
Kal Holla 002/1976 Licence 599864 5677366 1060.57 1023.96 1031.41 7.45 10.89
Kal Holla 002/1976 Licence 599864 5677366 1060.57 1032.83 1034.19 1.36 6.79
Kal Holla 003/1977 Licence 597870 5675213 959.82 937.61 941.55 3.94 6.39
Kal Holla 003/1977 Licence 597870 5675213 959.82 943.27 946.67 3.40 7.60
Kal Holla 004/1978 Licence 599451 5675901 980.42 945.45 953.62 8.17 9.99
Kal Hsm 001/1961 Licence 597151 5680862 1001.40 963.67 972.28 8.61 11.05
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Hole ID Location Easting
(UTM 32N)
Northing
(UTM 32N)
EOH
(m)
From
(m)
To
(m)
Width
(m)
K2O
(%)
Kal Hsm 002/1975 Off Licence 599040 5680829 988.71 949.60 958.58 8.98 9.79
Kal Kai 2/1975 Off Licence 603001 5683170 1210.47 985.06 987.49 2.43 8.17
Kal Kai 3/1976 Licence 603066 5681564 1014.80 982.52 983.46 0.94 13.92
Kal Kai 3/1976 Licence 603066 5681564 1014.80 984.63 984.86 0.23 6.40
Kal Kai 4/1977 Off Licence 604371 5683648 995.88 945.00 953.50 8.50 7.70
Kal Kai 4/1977 Off Licence 604371 5683648 995.88 959.65 970.30 5.16 5.47
Kal KuSo 1/1957 Licence 606430 5687145 1006.48 892.30 895.55 3.25 14.36
Kal KuSo 5/1977 Licence 605516 5688414 855.70 803.90 805.02 1.12 9.40
Kal KuSo 006a/1978 Licence 603748 5687518 916.00 864.33 873.02 8.69 14.53
Kal KuSo 7/1982 Licence 604381 5685138 948.30 923.60 926.66 3.06 14.21
Kal LfdMh 001/1975 Licence 597002 5678535 997.38 965.56 974.18 8.62 13.44
Kal LfdMh 001/1975 Licence 597002 5678535 997.38 977.27 980.90 3.63 8.40
Kal LfdMh 002/1976 Licence 598640 5679043 976.00 937.14 950.90 13.76 14.54
Kal Mda Off Licence 609408 5685827 1070.00 977.78 983.81 6.03 18.70
Kal Mda 2/1983 Off Licence 607129 5683504 966.13 Barren (based on chemistry)
Kal Mda 3/1983 Licence 607513 5686576 954.24 919.71 920.57 0.86 20.48
Kal Mda 4/1984 Off Licence 608233 5688437 933.86 870.04 876.71 6.67 18.72
Kal Wndg 1/1975 Licence 605796 5683633 967.06 930.45 937.72 7.27 8.97
Kal Wndg 2/1975 Licence 604938 5681865 1044.39 993.93 1010.58 16.65 9.41
Kal Wndg 2/1975 Licence 604938 5681865 1044.39 1017.15 1022.21 5.06 5.81
Kal Wndg 3/1983 Licence 605563 5682516 1006.72 975.47 978.95 3.48 9.86
Kal ZlMh 1/1965 Licence 595053 5681985 973.20 889.50 891.85 2.35 26.43
Kal ZlMh 3/1977 Off Licence 596267 5682259 949.53 905.57 914.91 9.34 11.72
Kal ZlMh 4/1978 Licence 595394 5680767 955.30 920.64 924.66 4.02 14.57
As discussed, various state institutions were involved in the historical exploration, where
during and post-unification, the responsibility of the ownership and curatorship of the historical
geological exploration archives became unassigned. This effectively resulted in the archives
being neglected over this period of instability, thereby instigating a process of the exploration
archives being seized/copied and privately stored by various individuals and newly formed
technical institutions of the time.
This has today resulted in the historical data either being stored in duplicate at various localities,
being stored in a single known locality, being stored at an unknown locality, or being assumed
to be lost/destroyed. The BVVG is considered to have the most complete national archive,
with various other depositories hosting duplicates thereof, as well as various additional datasets
of which the BVVG does not yet have copies. This has resulted in the current archives stored
by BVVG as being partial in extent.
Compounding this scenario is that various, often undated, iterations of the historical
exploration data pertaining to a single drill hole exist: during the drilling and analysis of a drill
hole various updated versions of the drill hole were issued, each differing to the previous as
additional data became available, geological logging was refined (based on any downhole
geophysics) or the chemistry and mineralogy results were corrected before sign off and final
approval by the analytical institution. As such, it is a common occurrence that two separate
data depositories may contain exploration data for the same drill hole, but which differ when
compared to one another. These differences are virtually always <5%, and rarely between 5%
to 10%. It is often impossible to determine which is the more recent and which should be relied
upon, as the date is more often than not recorded only as the year, e.g. 1978.
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In compiling the Mühlhausen-Nohra mining licence exploration database, Micon relied upon
drill-hole data that had been stored and previously captured by Ercosplan. Where possible this
captured data was cross-checked by Micon against both the archived Ercosplan data, as well
as that data stored at BVVG. In addition, Davenport was able to source historical exploration
data from K-UTEC, which was independently captured by Micon and which was also used for
cross-checking with the Ercosplan data. In various instances, cross-checks yielded minor
variances (largely <5%) between the chemistry and mineralogy; this due to different versions
of the drill-hole data being compared.
All drill holes with supporting downhole chemistry data were relied upon for geological
modelling and estimation purposes, whilst drill holes with only downhole geological data were
relied upon in order to complete wireframing interpretations, especially in localities where
there was a paucity of drill holes with supporting chemistry data.
In instances where full drill-hole logs were available, these typically included a detailed
lithological description of the entire drill hole, a summarised stratigraphic log, graphically
displayed downhole geophysical logging and the chemistry and mineralogy results.
All drill-hole sampling was conducted according to the procedures and protocols as specified
in Kali-Instruktion (1956 and 1960). Drill core samples were collected from all of the potash
drill holes. Where possible, the K2O grade of the potash-bearing horizons was historically
determined on an empirical base using the correlation with the downhole natural gamma log.
Samples were collected across all potash-bearing horizons and the total sampled length
represents the total thickness of the potash-bearing horizon of the z2KSt. In the potash drill
holes, core sample thicknesses ranged from 0.18 m to 4.00 m. Over inhomogeneous potash
horizons where interlayers of potential waste were included, the minimum sample thickness
was 0.5 m and the maximum was 5 m. Samples were crushed to 2 mm in a jaw crusher and a
representative sample was milled and crushed further to 50 μm. This sub-sample was assayed
by ICP-OES for all elements except NaCl, which was analysed using potentiometric titration.
XRD was used for mineralogy and thin sections were carried out at a local university.
The position of the drill holes and the distribution of the main mineral types is shown in Figure
7.1.
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Figure 7.1: Drill Hole Positions and Main Mineral Distribution within the Mühlhausen-Keula Mining Licence Area
Source: Micon
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7.5 DRILLING
Information relating to the drilling techniques used in the historical exploration is based upon
the English translation in the Ercosplan report dated 12th January 2018, ‘JORC compliant
Report for the Mühlhausen-Nohra Mining Licence Area, Federal State of Thuringia, Federal
Republic of Germany’.
Not a lot of detail of the drilling techniques used for the hydrocarbon drill holes are known.
However, Ercosplan state that state-of the-art techniques were used and assume the methods
and technology to be similar to those applied on licences in the surrounding South Harz area.
Three types of drill rigs (T-50, BU-40 or BU-75) were used for the hydrocarbon drilling.
According to historical technical reports rotary tricone bits were used to penetrate the
overburden and upper stratigraphy into the top of the salt rocks of the Staßfurt-Steinsalz
(z2NA). The drilling method was then switched to diamond drill bits, resulting in drill core
through the salt intersections. In addition, the sandstone of the Chirotheriensandstein (smSTC)
was cored to gain detailed structural understanding for possible extraction of hydrocarbons.
Once the drill bit was removed, geophysical logging was conducted downhole.
For the core drilling, a clay mud was used as the drilling fluid through the overburden sections
and a NaCl-saturated drilling fluid was used through the salt horizons. Additional measures
were taken to reduce core loss and caving, including addition of CMC (carboxymethyl
cellulose) to build filter cake and reduce fluid losses and mud pressure and reduced drilling
speed.
Diamond core drilling was conducted with drill-hole diameters of 114 mm, 118 mm, 143 mm
or 193 mm. The last cemented casing (size: 6 ⅝” or 5 ¾”) was mainly installed in the salt
rocks of the Staßfurt-Steinsalz (z2NA), in the anhydrite rocks of the Unterer Staßfurt-Anhydrit
(‘Basalanhydrit’, z2ANa), or in the upper part of the dolomite of the Staßfurt-Karbonat (z2CA).
7.6 LOGGING
All drill-hole logging was conducted according to the Kali-Instruktion. Drill core was
geologically logged in detail and full and summary drill-core logs were produced in both
written and graphical format. The complete core intersection was logged on a millimetre scale
and information recorded on the drill-core logs included lithological depths, stratigraphic
interpretation, and sampling information.
Chip logging was conducted on the upper sections of the drill holes that had been drilled using
tricone drilling methods, to give an indication of rock type. In the hydrocarbon drill holes the
K2O grade of the potash-bearing horizons was determined on an empirical base, using the
correlation with the downhole natural gamma log. This was also used to correlate recovery
and interpreted stratigraphy based on the drill-core logs.
Full drill hole logs include a detailed lithological description of the entire drill hole, which was
also summarised and graphically portrayed alongside the downhole geophysical logging and
assay results. Full logs are available for two drill holes, assay logs are available for 32 drill
holes and geophysical logs are available for 23 drill holes, mostly made up of calliper and
natural gamma with the full suite of geophysical results available for at least two drill holes.
Geophysical logging speed is recorded as 2.5 m/min and 7 m/min and the majority of the 1980
drill holes had the temperature also recorded.
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Currently there are no exploration activities being conducted in the Mühlhausen-Nohra mining
licence area.
7.7 SAMPLE PREPARATION AND ANALYSIS
The sampling and assay procedures completed on the potash-bearing salt rock samples from
the potash deposits within the Mühlhausen-Nohra Licence area followed the latest technology
and state of scientific knowledge at the time the potash exploration holes were drilled.
7.7.1 Sampling
The sampling procedures consisted of the following:
• Samples were taken across all potash-bearing horizons;
• The total sampled length represents the total thickness of the potash-bearing horizon of
the z2KSt;
• In the hydrocarbon drill holes, core sample thickness ranges from 0.07 m to 1.58 m. In
the potash drill holes, core sample thickness ranges from 0.18 m to 4.00 m;
• Over inhomogeneous potash horizons where interlayers of potential waste were
included, the minimum sample thickness was 0.5 m and the maximum was 5 m;
• Samples were crushed to 2 mm in a jaw crusher and a representative sample was milled
and crushed further to 50 μm;
• In situations where interlayers of clay, anhydrite, carbonates or other undesirable
substances are contained in the potash-bearing salt rocks within the potash deposit,
interlayers with thicknesses of up to 50 mm were incorporated into the sample for
analysis. Interlayers thicker than 50 mm were analysed separately to ascertain if
separation of the raw ore material was appropriate; and,
• The crushed sample was assayed by ICP-OES for all elements except NaCl which was
tested using potentiometric titration. XRD was used for mineralogy and thin sections
were carried out at a local university.
7.7.2 Analysis Procedures
Micon has no specific details about the procedures used prior to 1919; however, it is known
that since the foundation of the Kaliforschungsanstalt GmbH in 1919, it was responsible for
representative sampling and analytical work of potash-bearing salt rock samples following the
corresponding procedures.
The first documentation (Kali-Instruktion) issued on the classification of reserves regarding
potash and rock-salt deposits (Stammberger 1956) was released in 1957. The instruction was
revised in 1960 by Ulbrich to include detailed information about the sampling and analytical
procedures used by the former GDR for potash-bearing salt rocks.
Samples were homogenised to ensure a representative sample was assayed.
Samples were sent to the VEB Kombinat Foundation of Potash Research Institute, now known
as K-Utec AG Salt Technologies. Samples were assayed by ICP-OES for all elements except
NaCl which was tested using potentiometric titration.
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The sample analysis procedures consisted of the following:
• Samples consisting mainly of carnallite and/or other hygroscopic evaporite minerals
were sealed in airtight containers after sample retrieval. If the analysis of the sample
was not conducted immediately under appropriate conditions storage and transport for
analyses were conducted without destroying the seal;
• Complete and partial sample analyses were distinguished. Partial analysis was mainly
restricted to determining the K2O content of samples;
• Potassium, magnesium, calcium, sulphate, chloride, water and insoluble material
contents were analytically determined. The sodium content was determined by
calculation;
• If required, the bromine, boron, iodine and other valuable components of the samples
were determined;
• Partial analyses were only permitted for already investigated potash deposits and cannot
generally be used as the basis for reserve estimation in newly explored potash deposits;
and,
• Analysis results were cross-checked by analysing duplicate samples. Duplicate
samples had to be chosen with respect to a homogenous distribution within the deposit.
For surface drill holes 10% of the total sample amounts have to be duplicated with
internal and external cross-check samples.
The sample preparation and analysis of samples obtained from the potash-bearing salt rocks in
the Mühlhausen-Nohra region were carried out in the VEB Kombinat Kali’s research
department laboratory according to standard procedures by the state authority. In 1992 the
VEB Kombinat Kali laboratory was renamed K-Utec. These standard procedures were
developed during the 1950’s, but were mandatory since 1975.
All the Mühlhausen-Nohra samples were taken during the historical drilling campaigns
predominantly carried out during the 1960's and 1970's, with one hole drilled in 1934 and
another six drilled in the 1980’s. Sample data exists from seven (of 18) hydrocarbon drill holes
that were geophysically logged on and around the property, and 39 diamond core drill holes
('potash drill holes'). Core samples were taken from 35 of the potash drill holes; none of the
hydrocarbon drill holes were sampled.
7.8 HISTORICAL MINERAL RESOURCE ESTIMATES
Between 1980 and 1987 historical resource estimates were reported for three separate sub-
sections of the Mühlhausen-Nohra mining license, referred to as:
• a southerly Mühlhausen sub-section;
• a central Keula sub-section (comparable to the Mühlhausen-Keula sub-area); and,
• a northerly Nohra-Elende sub-section (comparable to the Mühlhausen-Keula sub-area).
From a modelling approach, Micon combined the historic southerly Mühlhausen and central
Keula sub-sections to produce the Mühlhausen-Keula sub-area mineral resource estimate
detailed in this report, effectively the southern portion of the Mühlhausen-Nohra mining
license. The exact extent of the historically defined sub-section areas of the three resources
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differ slightly to the current mining licence boundary. The historical resource estimates were
prepared by VEB Geological Research und Exploration, a nationally-owned enterprise,
according to the Kali-Instruktion of the former German Democratic Republic (GDR) (Gotte,
1982, /12/) (Table 7.4).
Table 7.4: Historical Resources for the Mühlhausen and Keula Sub-Areas
(Kästner et al., 1980 and 1987)
Sub-Section Date Area
(km2) Mining Horizon
Tonnage
(Mt)
Tonnage
K2O (Mt)
Grade
K2O (%) Category
Mühlhausen 1980 49.2 Hartsalz 234 33.8 14.4 Balance - C2
Carnallite 54.4 5.77 10.6 Non-Balance - C2
Keula 1987 13.7 Hartsalz 65.2 8.3 12.8 Balance - C2
Roof Beam Hartsalz 19.8 3.4 17 Non-balance - C2
The following parameters were applied to the historical reserves:
• For the Keula sub-section, resources within the 2 m roof beam and those exceeding a
maximum extraction height of 7 m (located below the mining horizon) were classified
as off-balance;
• Minimum content cut-off of the total resources of 13.20 % K2O and 13.11 % K2O crude
salt for Mühlhausen and Keula respectively;
• Minimum content cut-off of the total resources of 14.9 % K2O of the in-situ mineralised
rock for Keula;
• Geological cut-off content per drill hole of 8.0% K2O;
• Maximum content of undesirable components for processing considered were:
o 3.0% kieserite, 1.8% glaserite, 3.0% anhydrite in mined raw salt; and,
o 2.4% kieserite, 2.8% glaserite, 2.0% anhydrite in-situ mineralised rock;
• Minimum extraction height: 3.0 m;
• Maximum extraction height: 7.0 m; and,
• A commodity coefficient of 0.5.
The following methodology used for the historical resource estimation has been extracted from
the Ercosplan report. The method of geological block delineation was applied to produce the
resource estimate. The area was determined by circumnavigating the blocks with planimeter
and subtracting the drill hole safety pillars (r = 50 m). The average thickness per block was
calculated as an arithmetic mean based on drill holes with available drill cores and matching
cut-off criteria. Drill holes not matching the cut-off criteria (e.g. barren zones) were considered
in the estimation of the resources by applying the commodity coefficient. K2O grades and
mineralogical compositions were derived from chemical and mineralogical assays. Average
values per drill holes were calculated as thickness weighted mean. The density of the
mineralised rock was based on the mineralogical composition and density values of the single
minerals. The commodity coefficient was reasoned by analogy to the Volkenroda mine.
Davenport commissioned Ercosplan in August 2017 to review the available historical
exploration data pertinent to the Mühlhausen-Nohra mining licence with the intention of
ascertaining the resource potential.
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Ercosplan conducted the geological modelling in Paradigm SKUA-GOCAD (version 17)
software using a Discrete Smooth Interpolation (DSI) algorithm and a cell size of 50 x 50 m.
A minimum K2O cut-off grade of 5% was used for the estimation and no thickness cut-offs
were used. For more details regarding the modelling methodology applied by Ercosplan the
reader is referred to the JORC compliant report that accompanied the resource statement (see
references).
Ercosplan classified each of the Mühlhausen sub-areas as Exploration Targets in accordance
with the guidelines of the JORC Code (2012) (Table 7.5).
Table 7.5: Exploration Target mineral resource estimate for the Mühlhausen and Keula areas of the
Mühlhausen-Nohra Mining Licence (Ercosplan, 2017)
Sub-Area Seam Volume
(mm3)
Tonnage (Mt) K2O Grade (%) K2O Tonnage (Mt)
Min. Max. Min. Max. Min. Max.
Mühlhausen
Upper Sylvinite 233 401 583 10.90 18.38 41 107
Carnallite 209 297 432 5.38 10.79 16 47
Lower Sylvinite 122 210 276 4.75 12.12 10 33
Sub-Total 564 908 1,291 7.67 14.50 67 187
Keula
Upper Sylvinite 67 118 149 9.90 16.38 12 24
Carnallite 99 144 180 7.74 11.03 11 20
Lower Sylvinite 7 12 15 8.75 16.63 1 2
Sub-Total 173 274 344 8.71 13.59 24 46
TOTAL 737 1,182 1,635 7.91 14.31 91 233
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8.0 DATA VERIFICATION
For all exploration work conducted post-1950, quality assurance and quality control (QAQC)
procedures performed across the South Harz Potash Project were conducted by independent
state institutions and quality checked by VEB Kombinat Kali company professionals. Detailed
information regarding the cross-check analysis, that is reported to have occurred on the
Mühlhausen-Nohra mining licenses drill hole data, is not yet currently available and requires
sourcing from an as yet determined data depository.
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9.0 MINERAL PROCESSING METALLURGY AND TESTING
Currently no mineral processing or metallurgical test work programmes are planned, as no
mining or processing plans have been conceptualised.
Processing of sylvinite is well understood and focuses on the correct size at which the potash
is liberated and desliming to remove insoluble and fines. The most common method used in
potash processing, which has been adopted in the South Harz region, is conventional flotation
including drying, compaction and glazing. Ultimately this will depend on the product or
anticipated range of products that will be produced from the Mühlhausen-Nohra mining license
as whole.
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10.0 MINERAL RESOURCE ESTIMATE
10.1 INTRODUCTION
The historical drill-hole database was used by Micon to create a 3-D geological model and
resource estimate. The following sections describe the process.
10.2 GEOLOGICAL INTERPRETATION AND MODELLING
The geological model and mineral resource estimation for the Mühlhausen-Keula sub-area was
conducted in Micromine®, a software package used for geologically modelling stratiform
deposits. The database used to create the geological model and mineral resource estimate was
created from the manual data entry of hard copy historical drill-hole logs and exploration
records.
The drill-hole database was imported into Micromine® and validated. Validation checks
undertaken included checking for missing samples, mismatching sample and stratigraphy
intersections, duplicate records and overlapping from-to depths. No mistakes in the database
were identified. Once imported into Micromine®, geological interpretation was carried out in
2-D cross-sections and 3-D downhole plots of lithology and grade (Figure 10.1). This process
confirmed the correlating relationship between the drill-hole logs and the geophysical logging
as well as the stratigraphic-hosted nature of the potash mineralisation.
The chemical database was first composited according to stratigraphy, which allowed the
merging of the mineralogical and chemical data tables. The composited database was assigned
a tag column to indicate if a sample was sylvinite or carnallite based on the mineralogical drill-
hole logging data and the chemical assay data.
Some drill holes did not have a full suite of chemical data, for example, a number of drill holes
did not have assay results for MgSO4. In these instances, a length weighted average dummy
value was assigned. For missing KCl values, the K2O was divided by 0.63. The resultant
database was composited again, this time by grade, using a minimum trigger of 5% K2O, a
minimum grade length of 2 m, a maximum total length of waste of 2 m and a 1 m maximum
consecutive length of waste.
Each drill hole was individually examined and, based on stratigraphy, sequence of mineralised
seams and K2O composite grades, the sylvinite or carnallite seams were further divided into
the Upper Sylvinite seam, Upper Carnallite seam, Lower Carnallite seam and Lower Sylvinite
seam.
Roof and floor grids were made for each of the four seams. The minimum and maximum X
and Y origins used for gridding were 592000 (min X), 5674000 (min Y), 610000 (max X) and
5690800 (max Y). A grid cell size of 400 was used as this best fitted the data when correlated
in cross-section. An inverse distance squared gridding algorithm was used, with a circular
search area and a 5,000 m search radius to cover the distance between data points, one sector
and maximum 1 point per sector. The roof and floor grids were converted to wireframe
surfaces (DTM).
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Figure 10.1: SW-NW Cross-Section across the Mühlhausen-Keula Sub-Area
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In addition, Micon was provided with data for drill holes located in adjacent areas flanking the
Project area of the Mühlhausen-Nohra mining licence. The surfaces were cut according to the
limits of the seams that extend outward of the Mühlhausen-Nohra mining licence boundary.
The surfaces were additionally cut to the licence boundaries forming a second set of DTM
surfaces for analysis. Lastly, two sets of solid wireframes were created for the Upper Sylvinite
seam, Upper Carnallite seam, Lower Carnallite seam and Lower Sylvinite seam using the roof
and floor surfaces. The first set of wireframes represents the total extent of potash
mineralisation based on the complete set of data provided, while the second set of wireframes
represents the potash seam mineralisation cropped by the Project licence boundary.
Figure 10.2 provides a drill hole plan of the Mühlhausen-Keula sub-area and the configuration
of the upper-most wireframe for the Upper Sylvinite seam. In the northern part of the sub-area
between holes Kal KuSo 5/1977 and Kal KuSo 1/1957 there is a probable zone of faulting, as
indicated on Figure 10.2. The Upper Sylvinite is not present in hole Kal KuSo 5/1977 and the
Upper Carnallite has been uplifted by ±120 m from the elevation of the Upper Sylvinite seam
in hole Kal KuSo 1/1957. Other smaller faults were also identified in the historical drill-hole
logs, but these have not had a material effect on the geological model and resource estimation.
The faults will however, require further investigation and modelling as the Mühlhausen-Keula
project progresses and before any ore reserves are estimated.
10.3 MINERAL RESOURCES
With the exception of barren drill hole Kal Mda 3/1983, the economic potash deposit extends
across the whole of the Mühlhausen-Keula sub-area and is known from additional drill holes
to extend beyond the Davenport mining licence boundary. The mineral resources have been
restricted by seam thickness (>1 m), grade (>5% K2O) and the licence area boundary.
The average thicknesses of the wireframes are:
• Upper Sylvinite seam is 5.2 m;
• Upper Carnallite seam is 5.5 m;
• Lower Carnallite seam is 2.6 m; and,
• Lower Sylvinite is 2.1 m.
The minimum depth from surface to the roof of the uppermost seam, the Upper Sylvinite seam,
is ±830 m towards the north of the sub-area. The modelled seam package dips gently towards
the southeast with the maximum depth below surface reaching ±1,000 m in the vicinity of drill
hole Kal Amr 1/1976.
A grade-tonnage report was generated for the four seams using average densities obtained from
historical records, specifically: 2.26 t/m³ for Upper Sylvinite, 1.88 t/m³ for the Upper and Lower
Carnallite and 2.21 t/m³ for the Lower Sylvinite. The grades for each wireframe have been
reported based on the modelled composited assay database, which were modelled using the
same algorithm and parameters as the seam roof and floor surfaces. The modelled K2O grade
in the Upper Sylvinite and the width and the depth of the Upper Sylvinite seam roof are
indicated in Figures 10.3 to 10.5.
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At Mühlhausen-Keula it appears there is a relatively elevated amount of glaserite in the
modelled sylvinite seam. This became apparent when the amount of potassium (K) in the K2O
did not have a direct relationship when converted to KCl. Micon refereed to the expertise of a
chemist at K-Utec (K-Utec, 2018) who deduced that the samples from Mühlhausen-Keula are
similar to those from the Volkenroda area to the east.
Assuming that the K2O values in the historical data are correct, the potash has been interpreted
as a hard salt with high contents of K2O-containing sulphatic minerals, such as: -
Glaserite (3K2SO4 * Na2SO4) with 42.5 % of K2O
Langbeinite (K2SO4 * 2MgSO4) with 22.7 % K2O
Polyhalite (K2SO4 * MgSO4 * 2CaSO4 * 2H2O) with 15.6 % K2O
It was deduced that the occurrence of Glaserite is the reason for the difference of total K2O to
KCL-K2O with 10.27 % Glaserite in the Upper Sylvinite and of 7.36 % Glaserite in the Lower
Sylvinite. This theory is supported by the known occurrence of Glaserite in the west and
southwest of the Volkenroda area. Since the mineralogy of sylvinite in the Mühlhausen-Keula
sub-area is varied, Hartsalz has been included in the Upper and Lower Sylvinite seams for the
purposes of reporting.
The whole of the Mühlhausen-Keula sub-area has been classified as an Inferred mineral
resource, based on the quality and extents of the drilling database that are sufficient to imply
geological grade and continuity for eventual economic extraction. The spacing between drill
holes ranges from ±800 m to ±1,900 m. A 20% geological loss was applied to the modelled
tonnage to take into consideration the Inferred category nature of the mineral resources and
potential for discovery of localised structure and grade variation. Figure 10.3 highlights the
extents of the Inferred mineral resources.
The 6th October 2018 Inferred mineral resources for the Mühlhausen-Keula sub-area are
presented in Table 10.1.
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Figure 10.2: Drill Hole Plan and Wireframes of the Mühlhausen-Keula Sub-Area
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Figure 10.3: K2O Grade Distribution in the Upper Sylvinite Seam, Mühlhausen-Keula Sub-Area
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Figure 10.4: Thickness Distribution in the Upper Sylvinite Seam, Mühlhausen-Keula Sub-Area
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Figure 10.5: Upper Sylvinite Seam Roof Elevation, Mühlhausen-Keula Sub-Area
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Table 10.1: Mühlhausen-Keula Sub-Area Mineral Resources as at 6th October 2018
(in accordance with the guidelines of the JORC Code (2012)
Seam
Bulk
Density
(t/m3)
Geol
Loss
(%)
Tonnage
(Mt)
K2O
(%)
K2O
(Mt)
Insolubles
(%)
KCl
(%)
Mg
(%)
Na
(%)
SO4
(%) Category
Upper Sylvinite 2.26 20 660 12.69 84 0.97 14.20 1.32 20.87 16.00 Inferred
Lower Sylvinite 2.21 20 174 9.76 17 1.07 11.54 0.95 28.02 12.31 Inferred
Sub-Total Sylvinite 834 12.08 101 0.99 13.65 1.24 22.36 15.23 Inferred
Upper Carnallite 1.88 20 233 8.53 20 0.67 13.47 4.89 18.09 6.52 Inferred
Lower Carnallite 1.88 20 63 6.88 4 0.66 10.89 3.55 22.55 5.27 Inferred Sub-Total Carnallite 296 8.18 24 0.67 12.92 4.60 19.04 6.25 Inferred
Total Mühlhausen-Keula Sub-Area 1,130 11.06 125 0.91 13.46 2.12 21.49 12.88 Inferred
Notes:
1. Mineral resources presented according to ore type (mineralogy) and not as per stratigraphy.
2. Minimum seam thickness considered for resources is 1 m.
3. Minimum cut-off grade ≥5% K2O.
4. 20% geological loss applied to account for potential unknown geological losses for Inferred resources.
5. Data source: historical state records (BVVG) checked and verified.
6. Inferred resources rounded down to nearest 100,000 t.
7. Errors may exist due to rounding.
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11.0 MINING METHODS
The South Harz region is a renowned producer of potash, which has been economically mined
from various depths and at different thicknesses for decades. A number of mines in the
surrounding area have been mining potash from similar depths to the deposits on the
Mühlhausen-Keula sub-area, using both conventional underground methods and solution
mining. Most notable is the adjacent conventional underground Volkenroda mine (closed in
1990), and the Kehmstedt operations to the north of Mühlhausen-Keula, which is currently
producing potash through solution mining. Mühlhausen-Keula shares a boundary with the once
operational Volkenroda mine, which produced 55 Mt of crude salt between 1909 and 1951
from its conventional underground workings. At this stage it can be speculated that
conventional room and pillar mining may be suitable.
No mining method has been planned for Mühlhausen-Keula at this stage of study, but a
minimum seam thickness of 1 m was applied to the resources to exclude areas where there is
no prospect for eventual economic extraction.
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12.0 CONCLUSIONS AND RECOMMENDATIONS
The Mühlhausen-Keula sub-area of the Mühlhausen-Nohra mining licence held by Davenport
is located in a well-known potash producing area in the South Harz Potash District in the
Thüringen Basin, Central Germany. A total of 57 historical drill holes were used to create a
geological model and mineral resource estimate using Micromine®. Downhole sampling data
was available from seven hydrocarbon drill holes that were geophysically logged, whilst
downhole sampling data was available from 36 of the 39 diamond core drill holes ('potash drill
holes').
The target economic potash deposit is hosted in the z2KSt stratigraphic horizon, which occurs
across the whole of the Mühlhausen-Keula sub-area. Mineral resources have been defined
from four distinct seams, including the Upper and Lower Sylvinite and Carnallite Seams. Each
of these have been restricted by a seam thickness (>1 m) and grade (>5% K2O).
The seams are predominately horizontal with gentle undulations. There is a fault with a ±120 m
up-thrown block in the north of the Mühlhausen-Keula sub-area. The average depth to the roof
of the Upper Sylvinite seam is ±830 m increasing in depth to the southeast of the Project area.
The drill-hole spacing in the Mühlhausen-Keula sub-area ranges from ±800 m to ±1,900 m.
This is considered sufficient to imply geological and grade continuity to produce an Inferred
mineral resource following the guidelines defined in the 2012 edition of the JORC Code.
The total mineral resource area for the Mühlhausen-Keula sub-area is approximately 70.4 km2
and the total Inferred Mineral Resources tonnage is 1.13 Mt. The average grades and
thicknesses of each seam are as follows:
• Upper Sylvinite = 5.2 m @ 12.69 % K2O;
• Upper Carnallite = 5.5 m @ 8.53 % K2O;
• Lower Carnallite = 2.6 m @ 6.88 % K2O; and,
• Lower Sylvinite = 2.1 m @ 9.76 % K2O.
The Micon Inferred mineral resource estimate compares with both the VEB Geological
Research und Exploration historical resource estimate as well as the Ercosplan Exploration
Target. There is a slight difference in the carnallite grade and tonnage reported by Micon,
which can be attributed to the way the waste horizons between economic zones were treated.
In this instance Micon applied a minimum grade length of 2 m, a maximum total length of
waste of 2 m and a 1 m maximum consecutive length of waste.
In order to increase confidence in the resources on the Mühlhausen-Keula sub-area, Micon
recommends a twin-drilling programme to confirm the grade reported in the historical drill-
hole database. This recommendation is based on the quality and volume of the available
historical data, which throughout this modelling process has been queried and the validity
checked at source. In addition, the mineral resources on the Mühlhausen-Keula sub-area has
been complicated, and enriched, due to the combination of potassium chloride and potassium
sulphate mineralised target horizon.
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Twin-hole drilling work will increase confidence in the historical exploration data. Micon
suggests twinning four drill holes, commencing in order of twinning Kal ZlMh 1/1965, Kal
Kai 3/1976, Kal LfdMh 002/1976 and E KuSo 2/1961 (Figure 10.2).
Due to the complexities encountered whilst interpreting the historical drill hole logging and
sampling records, Davenport is committed to continuing to update and verify the historical drill
hole database. This process would allow for a better understanding of the historical seismic
survey data, which would be used in any subsequent update of the geological interpretation on
the Mühlhausen-Keula sub-area and the Mühlhausen-Nohra mining license as a whole. Should
the historical seismic data be deemed unreliable for use, Davenport can consider conducting a
new seismic survey to reinforce the geological interpretation.
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13.0 DATE AND SIGNATURE PAGE
The effective date of the mineral resource estimates presented in this report is 6th October 2018.
Signed on behalf of Micon International Co Limited
Liz de Klerk, M.Sc., Pr.Sci.Nat., SAIMM
Senior Geologist
Micon International Co Limited
Date: 12th October 2018
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14.0 REFERENCES
JORC compliant Report for the Mühlhausen-Nohra Mining Licence Area, Federal State of
Thuringia, Federal Republic of Germany, Ercosplan Ingenieurgesellschaft Geotechnik und
Bergbau mbH, 2nd March 2018.
JORC Code (2012) Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute
of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council
of Australia, 20th December 2012.
Differences in KCl values of Sylvinite from samples of the Mühlhausen -Nohra deposit area,
K-Utec 8th October 2018.
Potash - Deposits, Processing, Properties and Uses, Donald E. Garrett, PhD., 1996.
Kali-Instruktion - Instruktion zur Anwendung der Klassifikation der Lagerstättenvorräte fester
mineralischer Rohstoffe vom. 28 August 1979 auf Kalisalz- und Steinsalzlagerstätten, Prof. Dr
W Gotte, Akademie-Verlag Berlin, Zeitschrift für angewandte Geologie, Bd. 28 (1982), Heft
6, p287 - 293.
Ulbrich, Instruktion zur Anwendung der Klassifikation der Lagerstättenvorräte fester
mineralischer Rohstoffe auf Kali- und Steinsalzlagerstätten der DDR (2. Kali-Instruktion vom
9 Januar 1960). In: Zeitschrift für angewandte Geologie, Bd. 6 Heft 7, Zentrales Geologisches
Institut, Akademie-Verlag Berlin, , Berlin, Juli 1960, p330 - 336.
Stammberger, F., Instruktion zur Anwendung der Klassifikation der Lagerstättenvorräte fester
mineralischer Rohstoffe auf Kali- und Steinsalzlagerstätten. Akademie-Verlag Berlin:
Zeitschrift für angewandte Geologie. Berlin, Heft 2/3, December 1956, p134 - 139.
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15.0 CERTIFICATE
CERTIFICATE OF AUTHOR ELIZABETH DE KLERK
As author of this report entitled “Technical Report on the Mineral Resources of the Mühlhausen-Keula
Mining Licence Area, South Harz Potash Project, Thuringia, Germany”, effective date 6th October
2018, I, Elizabeth de Klerk do hereby certify that:
1. I am employed as a Senior Geologist by, and carried out this assignment for, Micon International
Co Limited, Suite 10, Keswick Hall, Norwich, United Kingdom. tel. 0044(1603) 501 501, e-mail
[email protected] ;
2. I hold the following academic qualifications:
B.Sc. Geology University of Leicester, United Kingdom, 2000;
M.Sc. Exploration Geology University of Rhodes, Grahamstown, South Africa, 2002;
3. I am a member of the South African Institute of Mining and Metallurgy (SAIMM) and a Fellow
of the Geological Society of Africa and a registered Professional Natural Scientist
(Pr.Sci.Nat. 400090/08)
4. I have worked as a geologist in the minerals industry for over 15 years in the mining industry in
Africa, Europe and United Kingdom;
5. I do, by reason of education, experience and professional registration, fulfil the requirements of
a Competent Person as defined by the JORC Code (2012);
6. I visited the property that is the subject of this Technical Report from 12th to 16th February and
6th to 8th March 2018;
7. I am responsible for the preparation or supervision of preparation of all sections of this Technical
Report;
8. I am independent of Davenport Resources Ltd and East Exploration GmbH, their directors, senior
management, and other advisers, I have had no previous involvement with the property;
9. I have read the JORC Code (2012) and this report for which I am responsible and it has been
prepared in compliance with the instrument;
10. As of the date of this certificate to the best of my knowledge, information and belief, this
Technical Report for which I am responsible contains all scientific and technical information that
is required to be disclosed to make this report not misleading.
Liz de Klerk {signed and sealed}
Elizabeth de Klerk, M.Sc., Pr.Sci.Nat., SAIMM (707850)
Senior Geologist,
Micon International Co Limited
Signed Date: 12th October 2018
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16.0 GLOSSARY AND ABREVIATIONS
16.1 GLOSSARY
Anhydrite (CaSO4): Anhydrous calcium sulphate, common evaporite deposit mineral.
Aphthitalite also known as Glaserite (K3Na(SO4)2): Potassium sodium sulphate uncommon
evaporite mineral, however it is an important potash source.
Argillaceous rocks: Group of detrital sedimentary rocks, commonly clays, shales, mudstones,
siltstones and marls.
Basalt: A finely crystalline igneous rock with a basic composition.
Boracite (Mg3B7O13Cl): Magnesium chloroborate, rare evaporite marine deposit mineral.
Brecciated (breccia): Fragmented rock consisting of angular particles that have not been worn
by water (unlike conglomerates).
Calcite (CaCO3): Calcium carbonate.
Carbonate rock: Rock primarily composed of carbonate minerals: calcite, aragonite,
dolomite, magnesite, siderite etc. The majority of carbonate rock is formed by sedimentation
in sea and lake basins.
Carnallite (KMgCl3∙6(H2O): Hydrated potassium magnesium chloride, common marine
evaporite deposit mineral and an economically important potash source.
Carnallitite: Potassium rich evaporite rock consisting mainly of carnallite, halite, kieserite and
anhydrite.
Clay: Finely grained sedimentary rock composed of clay minerals.
Cut-Off: An assay cut-off is the break-even economic value of the ore; the block cut-off is the
economic value that optimises the net present value of the operating assets.
Dolomite: (CaMg(CO3)2): Calcium magnesium carbonate rock.
Evaporite Deposit: A sedimentary rock deposited from aqueous solution (e.g. seawater) as a
result of evaporation.
Footwall: The rock on the underside of a vein or ore structure.
Glaserite also known as Aphthitalite (K3Na(SO4)2): Potassium sodium sulphate uncommon
evaporite mineral, however it is an important potash source.
Gosudarstvennaya Komissia po Zapasam (GKZ): the State Commission for Mineral
Reserves. Founded in 1927, GKZ manages mineral reserves on behalf of the Ministry for
Environmental Protection and Natural Resources of the Russian Federation.
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Goethite (αFeO.OH): Hydrated iron oxide, rust like in appearance.
Gypsum (CaSO4∙2H2O): Calcium sulphate, common mineral in sedimentary rocks. This
mineral is especially important in evaporite deposits.
Haematite (Fe2O3): Iron oxide common in igneous, metamorphic and sedimentary rocks.
Halite (NaCl): Sodium chloride, very common evaporite deposit mineral.
Hartsalz: Rock comprising sylvite, halite, anhydrite and/or kieserite. Common miner’s term
for potash-bearing evaporite rocks, which exhibit a high hardness while drilling due to the
admixtures of sulphate minerals.
Igneous rock: A rock formed by the solidification of magma.
Intrusion: A body of igneous rock that invades older rock. The invading rock may be a plastic
solid or magma that pushes its way into the older rock.
Isopach: A line, on a map, drawn through points of equal thickness of a designated unit.
JORC Code: The Australasian Code for Reporting of Mineral Resources and Ore Reserves
prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and
Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. The
current edition is dated 2012.
Kainite (KMg(SO4)Cl∙3H2O): Hydrated potassium magnesium sulphate. A secondary mineral
in marine potash deposits formed due to metamorphism or resolution by ground waters.
Kainitite: Potassium rich evaporite rock consisting mainly of kainite and halite.
Kali-Instruktion: Guideline document for the classification of solid mineral resources of rock-
salt and potash deposits in the former German Democratic Republic. It defines the
requirements for the exploration of rock-salt and potash. Originally published 5th December
1956, three revisions, dated 9th January 1960 (2nd revision), 20th June 1963 (3rd revision) and
17th November 1981 (4th and last revision).
Kieserite (MgSO4∙H2O): Hydrated magnesium sulphate monohydrate, commonly occurring
mineral in marine evaporites.
Langbeinite (K2Mg2(SO4)3): Potassium magnesium sulphate uncommon marine evaporite
mineral, however it is an important potash source.
Limestone: A common sedimentary rock composed mainly of calcium carbonate.
Magmatic: Consisting of, relating to or of magma origin.
Metamorphic rock: A rock that has, in a solid state, undergone changes in mineralogy,
texture, or chemical composition as a result of heat or pressure.
Mine: An excavation from which valuable materials are recovered.
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Mineral deposit: A body of mineralisation that represents a concentration of valuable metals.
The limits can be defined by geological contacts or assay cut-off grade criteria.
Mineral Reserve: The Russian equivalent of the Western mineral resource and ore reserve.
Mineral reserves are sub-divided into A, B, C1 and C2 categories depending on the level of
definition and technological study.
Mineral Resource: The JORC Code defines a mineral resource as “a concentration or
occurrence of material of intrinsic economic interest in or on the Earth's crust in such form and
quantity that there are reasonable prospects for eventual economic extraction”. Sub-divided
into Measured, Indicated and Inferred categories depending on how well they are defined.
Off-Balance Mineral Reserve: A volume of material which has demonstrated the presence of
a metal to a sufficient level of confidence, but whose economic viability has not been
demonstrated.
Open pit: A mine that is entirely on surface; also referred to as open-cut or open-cast mine.
Operational reserves: Balance mineral reserves that have been adjusted for dilution and
losses, and have been incorporated into a mine production schedule.
Ore Reserve: The JORC Code defines an ore reserve as “the economically mineable part of a
Measured or Indicated mineral resource”. Ore reserves have been the subject of appropriate
assessments, such as feasibility studies that apply realistic mining, metallurgical, economic,
marketing, legal, environmental, social and governmental factors. These assessments
demonstrate at the time of reporting that extraction could reasonably be justified.
Polyhalite (K2Ca2Mg(SO4)42∙H2O): Hydrated potassium calcium magnesium sulphate.
Common marine evaporite deposit mineral and an economically important potash source.
Pyrite (FeS2): Iron sulphide.
Run of mine (ROM): A term used loosely to describe ore of average grade as produced from
the mine.
Sedimentary rock: Rock formed by sedimentation of substances in water, less often from air
and due to glacial actions on the land surface and within sea and ocean basins. Sedimentation
can be mechanical (under the influence of gravity or environment dynamics changes), chemical
(from water solutions upon their reaching saturation concentrations and as a result of exchange
reactions), or biogenic (under the influence of biological activity).
Sylvinite: Evaporite rock comprising sylvite and halite.
Sylvite (KCl): Potassium chloride, common evaporite deposit mineral and an economically
important potash source.
Suite: An aggregate of conformable rock beds with similar general properties that differentiate
them from overlying or underlying rocks.
Techniko-Ekonomicheskie Obosnovie (TEO): Standard Russian format for characterising a
mineral deposit.
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16.2 ABBREVIATIONS
% Percent
° degree (angle)
°C degree Centigrade
Ca Calcium
CaSO4 Calcium sulphate
ASX Australian Stock Exchange
CIM Canadian Institute of Mining, Metallurgy and Petroleum
CoV coefficient of variation
CP Competent Person
CRM certified reference material
Cu copper
€ Euro
EHS environment, health and safety
ESIA Environment and Social Impact Assessment
G&A general and administration
GDR German Democratic Republic
GKZ The State Commission for Mineral Reserves
GMT Greenwich Mean Time
g Gram(s)
g/t gramme/tonne
h Hour(s)
ha Hectare
ICP-OES inductively coupled plasma-optical emission spectrometry
ID2 inverse distance weighting to the power of two
ID3 inverse distance weighting to the power of three
Insols Acid insoluble material
K Potassium
K2O Potassium oxide
KCl Potassium chloride
kg kilogramme
km kilometre
km2 square kilometre
k m3 thousand cubic metres
kt thousand tonnes
kV kilovolt
kW Kilowatt(s)
kWh Kilowatt hour(s)
kWh/t Kilowatt hours per tonne
L Litre(s)
LOM life-of-mine
µm micron
mm millimetre
m metre
m2 square metre
m3 cubic metre
Ma Millions of years ago
Mg Magnesium
MgCl2 Magnesium chloride
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MgSO4 Magnesium sulphate
Micon Micon International Co Limited
Mt million tonnes
Mt/a million tonnes per year
MW megawatt
Na Sodium
NaCl Sodium chloride
N/A Not applicable
NN nearest neighbour
oz ounce
QA/QC Quality assurance/quality control
QP Qualified Person
Report technical report
ROM Run of Mine
s Second
t tonne
t/a tonnes/year
t/d tonnes/day
t/h tonnes/hour
TEO Techniko-Ekonomicheskie Obosnovie
US$ United States dollar
V Volt(s)
VAT Value Added Tax
Wt% Weight percent
XRF X-ray fluorescence
XRD X-ray diffraction
y Year(s)
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17.0 APPENDIX 1
JORC Code, 2012 Edition – Table 1
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary
Sampling
techniques
Nature and quality of sampling (eg cut
channels, random chips, or specific
specialised industry standard measurement
tools appropriate to the minerals under
investigation, such as down hole gamma
sondes, or handheld XRF instruments, etc).
These examples should not be taken as
limiting the broad meaning of sampling.
All samples were taken during historical drilling campaigns
predominantly carried out during the 1960's and 1970's with six
holes drilled in the 1980’s. Sample data exists from seven
hydrocarbon drill holes that were geophysically logged and 35
diamond core drill holes ('potash drill holes') that produced core
samples.
Include reference to measures taken to
ensure sample retrospectivity and the
appropriate calibration of any
measurement tools or systems used.
Information about the calibration of the geophysical downhole
tools is not available. Core recovery logs were kept for the core
drill holes, showing measurements taken by the drillers and
geologists, which were checked and correct against the
geophysical logs.
Aspects of the determination of
mineralisation that are Material to the
Public Report.
In cases where ‘industry standard’ work
has been done this would be relatively
simple (eg ‘reverse circulation drilling was
used to obtain 1 m samples from which 3 kg
was pulverised to produce a 30 g charge
for fire assay’). In other cases more
explanation may be required, such as
where there is coarse gold that has inherent
sampling problems. Unusual commodities
or mineralisation types (eg submarine
nodules) may warrant disclosure of
detailed information.
All drill-hole sampling was conducted according to the Kali-
Instruktion (1956 and 1960). No core samples were taken from
the hydrocarbon drill holes. Core samples were taken from 35 of
the potash drill holes. Where possible, the K2O grade of the
potash-bearing horizons was determined on an empirical base
using the correlation with the downhole natural gamma log.
Samples were taken across all potash-bearing horizons and the
total sampled length represents the total thickness of the potash-
bearing horizon of the z2KSt. In the potash drill holes, core
sample thickness ranges from 0.18 m to 4.00 m. Over
inhomogeneous potash horizons where interlayers of potential
waste were included, the minimum sample thickness was 0.5 m
and the maximum was 5 m. Samples were crushed to 2 mm in a
jaw crusher and a representative sample was milled and crushed
further to 50 μm which was assayed by Induced Coupled Plasma
Optical Omission Spectrometry (ICP-OES) for all elements
except NaCl which was tested using potentiometric titration. X-
Ray Diffraction (XRD) was used for mineralogy and thin
sections were carried out at a local university.
Drilling
techniques
Drill type (eg core, reverse circulation,
open-hole hammer, rotary air blast, auger,
Bangka, sonic, etc) and details (eg core
diameter, triple or standard tube, depth of
diamond tails, face-sampling bit or other
type, whether core is oriented and if so, by
what method, etc).
The 39 cored potash drill holes were drilled using a Type C 1500
rig in the 1960s, and T50A and Sif 1200 rigs in the 1980s
producing core with diameters of 108 mm and 65 mm
respectively. The 18 hydrocarbon drill holes were drilled using
T-50, BU-40 and BU-75 rigs producing core with diameters of
114 mm, 118 mm, 143 mm and 193 mm. All drill holes were
drilled vertically with minor deviations in some drill holes at
depth. Drilling from surface used tricone bits through the
overburden and upper stratigraphy, switching to core through the
potash-bearing horizons to the end of hole (EOH). Clay mud was
used as the drilling fluid through the overburden sections in
potash drill holes and a NaCl-saturated drilling fluid was used
through the salt horizons. Casing was used through the
overburden.
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Criteria JORC Code explanation Commentary
Drill sample
recovery
Method of recording and assessing core
and chip sample recoveries and results
assessed.
It is apparent that the core recovery was monitored by the project
geologist on site at the time of drilling and this recorded in the
historical logs. From the data available, which is not easily
interpreted, the core recoveries appear satisfactory (approx.
97%). Lithological and stratigraphic intersections were
subsequently corrected using the geophysical logging results.
Measures taken to maximise sample
recovery and ensure representative nature
of the samples.
Information about maximising sample recovery is not currently
known, but may be available in historical German documents.
Whether a relationship exists between
sample recovery and grade and whether
sample bias may have occurred due to
preferential loss/gain of fine/coarse
material.
Sampling was conducted according to the stratigraphic
interpretation of the core using the downhole geophysical
logging as a depth guide. Axial drilling into the drill core with a
spiral drill was conducted to contain pulverised material for
chemical and mineralogical analysis.
Logging
Whether core and chip samples have been
geologically and geotechnically logged to a
level of detail to support appropriate
Mineral Resource estimation, mining
studies and metallurgical studies.
Core samples were geologically logged in detail and full and
summary drill-hole logs were produced in both written and
graphical format. Information recorded on the drill-hole logs
included lithological depths, stratigraphic interpretation, and
sampling information.
Whether logging is qualitative or
quantitative in nature. Core (or costean,
channel, etc) photography.
Full drill-hole logs include a detailed lithological description of
the entire drill hole, which was also summarised and graphically
portrayed alongside the downhole geophysical logging and assay
results. Logs are available for 32 drill holes and geophysical
logs are available for 16 drill holes, mostly made up of calliper
and natural gamma with the full suite of geophysical results
available for at least two drill holes. Geophysical logging speed
is recorded as 2.5 m/min and 7 m/min.
The total length and percentage of the
relevant intersections logged. The complete core intersection was logged on a millimetre scale.
Sub-sampling
techniques and
sample
preparation
If core, whether cut or sawn and whether
quarter, half or all core taken.
Axial drilling into the drill core with a spiral drill was conducted
to obtain pulverised material for chemical and mineralogical
analysis.
If non-core, whether riffled, tube sampled,
rotary split, etc and whether sampled wet
or dry.
Not applicable.
For all sample types, the nature, quality
and appropriateness of the sample
preparation technique.
All drill-hole sampling was conducted according to the
Kali-Instruktion (1956 and 1960).
Quality control procedures adopted for all
sub-sampling stages to maximise
representivity of samples.
Samples were homogenised to ensure a representative sample
was assayed (see section above on sampling).
Measures taken to ensure that the sampling
is representative of the in situ material
collected, including for instance results for
field duplicate/second-half sampling.
No field duplicates were taken. Thicknesses of the potash-
bearing horizons were confirmed by the geophysical logging and
the full length of the potash was sampled.
Whether sample sizes are appropriate to
the grain size of the material being
sampled.
Sample sizes are considered appropriate to the material being
sampled, which is bulk mineralisation.
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Criteria JORC Code explanation Commentary
Quality of
assay data and
laboratory
tests
The nature, quality and appropriateness of
the assaying and laboratory procedures
used and whether the technique is
considered partial or total.
Samples were sent to the VEB Kombinat Foundation of Potash
Research Institute, now known as K-Utec AG Salt Technologies.
Samples were assayed by ICP-OES for all elements except NaCl
which was tested using potentiometric titration.
For geophysical tools, spectrometers,
handheld XRF instruments, etc, the
parameters used in determining the
analysis including instrument make and
model, reading times, calibrations factors
applied and their derivation, etc.
This information is not currently known, but may be available in
untranslated historical German documents.
Nature of quality control procedures
adopted (eg standards, blanks, duplicates,
external laboratory checks) and whether
acceptable levels of accuracy (ie lack of
bias) and precision have been established.
Quality control was insured by technical representatives from
several state institutions at the time who checked the sampling
procedures and laboratory results.
Verification of
sampling and
assaying
The verification of significant intersections
by either independent or alternative
company personnel.
For all exploration work conducted post-1950, quality assurance
and quality control (QAQC) procedures performed at
Mühlhausen-Nohra was conducted by independent state
institutions and quality checked by VEB Kombinat Kali company
professionals. Detailed information regarding the cross-check
analysis that is reported to have occurred on the Mühlhausen drill-
hole data is not currently available to Micon and may exist in the
archives in Germany.
The use of twinned holes. No twin drilling has taken place.
Documentation of primary data, data entry
procedures, data verification, data storage
(physical and electronic) protocols.
Original drill-hole logs were recorded on paper, using a
combination of handwritten and typed records. Copies of the
drill-hole logs (including the summary logs and geophysical
logging etc) were distributed to several institutions around
Germany, including BVVG, Ercosplan and K-Utec, many of
which are still stored in the archives and available for review.
The header for each drill-hole lists are not all are still
inexistence, but those that are have been were reviewed in person
by Micon and Davenport. No original drill core or sample pulps
are still available.
Discuss any adjustment to assay data.
Assay data was not adjusted in any way. K2O grades for the
hydrocarbon drill holes were interpreted from the natural gamma
logs.
Location of
data points
Accuracy and quality of surveys used to
locate drill holes (collar and down-hole
surveys), trenches, mine workings and
other locations used in Mineral Resource
estimation.
Drill-hole collars were surveyed by the state surveyor subsequent
to drilling and given with centimetre to decimetre accuracy.
Records of collar positions were obtained from drill-hole logs
and state archives.
Specification of the grid system used.
Drill-hole coordinates were recorded in local a German
coordinate system, which is a 3-degree Gaus Kruger zone 4
projection with a DHDN datum and an East Germany local
transformation to 2 m (EPSG-Code 31, 468). For the purposes
of this resource estimation the coordinates have been converted
to UTM Zone 32 North.
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Quality and adequacy of topographic
control.
No topographic survey exists for the project area, which is flat
lying to gently undulating.
Data spacing
and
distribution
Data spacing for reporting of Exploration
Results.
The drill-hole spacing in the Mühlhausen-Keula sub-area ranges
from ±800 m to ±1,900 m.
Whether the data spacing and distribution
is sufficient to establish the degree of
geological and grade continuity
appropriate for the Mineral Resource and
Ore Reserve estimation procedure(s) and
classifications applied.
The spacing of drill holes and samples is considered sufficient to
imply geological and grade continuity based on information
obtained from historical drill holes and samples.
Whether sample compositing has been
applied. Samples were not composited prior to laboratory test work.
Orientation of
data in
relation to
geological
structure
Whether the orientation of sampling
achieves unbiased sampling of possible
structures and the extent to which this is
known, considering the deposit type.
All drill holes are vertical with only minor deviations at depth as
discussed above. The potash-bearing horizons are horizontal
with only minor gentle undulations and the sample thicknesses
are considered to represent true thickness without requiring
correction.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered to
have introduced a sampling bias, this
should be assessed and reported if
material.
The potash seam at Mühlhausen-Keula is horizontal to sub-
horizontal and all thicknesses from the vertical drill holes have
been treated as true thickness.
Sample
security
The measures taken to ensure sample
security.
No information is available about sample security, although it is
noted that the historical drilling programmes were conducted
with a very high level of technical capability with experienced
geologists and drillers. The laboratory used (K-Utec) is regarded
as one of the most experienced salt technological facilities in the
world.
Audits or
reviews
The results of any audits or reviews of
sampling techniques and data.
Original analytical results retained in the K-Utec archives were
reviewed where possible and compared with historical records
stored at the BVVG archives. No original core or sample
material is available, however, the available data is of sufficient
quality to support an Inferred Resource.
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Section 2 Reporting of Exploration Results
Criteria listed in the preceding section also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral
tenement and
land tenure
status
Type, reference name/number, location and
ownership including agreements or material
issues with third parties such as joint
ventures, partnerships, overriding royalties,
native title interests, historical sites,
wilderness or national park and
environmental settings.
Davenport Resources Limited is a publicly listed company on the
Australian Securities Exchange and holds the Mühlhausen-Nohra
mining licences through its wholly owned subsidiary East
Exploration GmbH. The Mühlhausen-Keula mining licence is
located within the South Harz Potash District of the Thuringian
Basin, Germany.
The security of the tenure held at the time of
reporting along with any known
impediments to obtaining a licence to
operate in the area.
There are no known impediments to the security of the tenure
that Davenport have over the Mühlhausen-Keula sub-area. The
Mühlhausen-Nohra mining licence is perpetual in nature, not
subject to expiry and is valid to explore for and produce ‘potash,
including (associated) brine’ with no applicable statutory
royalties. The Mühlhausen-Nohra Mining Licence Deed No. is
1077/95-611 and has an area of 141.6049 km2
Exploration
done by other
parties
Acknowledgment and appraisal of
exploration by other parties.
All of the exploration conducted on Mühlhausen-Keula is
historical. The first recorded evidence of exploration drilling on
the Mühlhausen-Nohra mining licence is from drill hole Kal
Möhrbach 1/1890, drilling of which commenced in 1889,
following the completion of which a further 14 drill holes were
drilled during the 1890’s. All of the other exploration drilling
was conducted by the former GDR. Various parties were
involved, most of which combined to form VEB Kombinant
after reunification.
Geology Deposit type, geological setting and style of
mineralisation.
The Mühlhausen-Nohra mining licence is located in the Südharz
(South Harz) Potash District in the north-western extent of the
Thuringian sedimentary basin, which has been separated by the
uplift of the northerly Harz Mountains from the South Permian
Basin (SPB). The regional stratigraphy of the South Permian
Basin is fairly well understood with a pre-Variscan basement
(Upper Carboniferous and older rocks) and a transition horizon
of Upper Carboniferous to Lower Permian lying beneath an
expansive sequence of evaporite rocks of the Upper Permian
succession. These evaporite deposits are assigned to the
Zechstein Group, and host the target potash mineralisation of the
South Harz Potash District which occurs on the Mühlhausen-
Keula mining licence. The potash-bearing target Zechstein
Group consists of seven depositional cycles with the potash
mineralisation of the South Harz Potash District hosted within
the second cycle, the Staßfurt Formation (Z2). The Z2 is further
sub-divided into horizons, of which the Kaliflöz Staßfurt (z2KSt)
hosts potentially economic potash. The z2KSt is split into a
Hanging Wall Group that has 11 to 19 horizons of finely layered
potassium salts and a Footwall Group that has 1 to 10 coarsely
layered potassium salts and thick halite layers. The z2KSt is
present across the whole of Mühlhausen-Keula sub-area apart
from one barren drill hole (Kal Mda 3/1983) and has an average
thickness of 18.2 m. The main mineral present on Mühlhausen-
Keula is carnallite with additional sylvite, or Hartsalz present in
various areas. There are also lesser amounts of glaserite,
langbeinite, halite, polyhalite, anhydrite and kieserite.
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Criteria JORC Code explanation Commentary
Drill hole
Information
A summary of all information material to
the understanding of the exploration results
including a tabulation of the following
information for all Material drill holes:
The drill-hole database for Mühlhausen-Keula is made up of 57
historical drill holes. A table showing the key drill hole
information can be found in Section 7.4 of this report.
Data
aggregation
methods
In reporting Exploration Results, weighting
averaging techniques, maximum and/or
minimum grade truncations (eg cutting of
high grades) and cut-off grades are usually
Material and should be stated.
The chemical analysis for Mühlhausen-Keula was composited
according to stratigraphy (z2KSt). A minimum cut-off grade of
5% K2O was applied to delineate the limits of the potash-bearing
horizon within the z2KSt. A weighted average K2O grade for
each drill hole was calculated against sample length with a 2 m
minimum grade length, a 2 m maximum total length of waste
and a 1 m maximum consecutive length of waste allowed.
Where aggregate intercepts incorporate
short lengths of high grade results and
longer lengths of low grade results, the
procedure used for such aggregation should
be stated and some typical examples of such
aggregations should be shown in detail.
Waste was included in the grade composite with a 2 m maximum
total length of waste and a 1 m maximum consecutive length of
waste allowed.
The assumptions used for any reporting of
metal equivalent values should be clearly
stated.
No metal equivalents were used or reported.
Relationship
between
mineralisation
widths and
intercept
lengths
These relationships are particularly
important in the reporting of Exploration
Results.
All drill holes are vertical with only minor deviations at depth as
discussed above. The potash-bearing horizons are horizontal
with only minor gentle undulations and the sample thicknesses
are considered to represent true thickness without requiring
correction.
If the geometry of the mineralisation with
respect to the drill-hole angle is known, its
nature should be reported.
If it is not known and only the down hole
lengths are reported, there should be a clear
statement to this effect (eg ‘down hole
length, true width not known’).
Diagrams
Appropriate maps and sections (with scales)
and tabulations of intercepts should be
included for any significant discovery being
reported These should include, but not be
limited to a plan view of drill-hole collar
locations and appropriate sectional views.
Diagrams included in the body of the report.
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Criteria JORC Code explanation Commentary
Balanced
reporting
Where comprehensive reporting of all
Exploration Results is not practicable,
representative reporting of both low and
high grades and/or widths should be
practiced to avoid misleading reporting of
Exploration Results.
All available drill hole information was used. Mühlhausen-
Keula has been reported as a mineral resource, see Section 3 of
Table 1.
Other
substantive
exploration
data
Other exploration data, if meaningful and
material, should be reported including (but
not limited to): geological observations;
geophysical survey results; geochemical
survey results; bulk samples – size and
method of treatment; metallurgical test
results; bulk density, groundwater,
geotechnical and rock characteristics;
potential deleterious or contaminating
substances.
As well as the potash and hydrocarbon drill hole information
described above, hydrogeological, geotechnical and seismic
studies have also been conducted on Mühlhausen-Keula. The
details and results of these projects are written up in the
historical archived reports and have not been reviewed by the
author as they require translation into English.
Further work
The nature and scale of planned further
work (eg tests for lateral extensions or depth
extensions or large-scale step-out drilling).
The current mineral resources are the full extent of the
Mühlhausen-Keula sub-area within the Mühlhausen-Nohra
mining licence. Future work should include four twin drill holes
to confirm the historical grades, possibly accompanied by a
seismic survey or a detailed review of the results of the historical
seismic survey.
Diagrams clearly highlighting the areas of
possible extensions, including the main
geological interpretations and future
drilling areas, provided this information is
not commercially sensitive.
At this stage of the project the focus is on increasing confidence
and not area of the resource. Positions of suggested holes to be
twinned are shown on Figure 10.2.
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Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Database
integrity
Measures taken to ensure that data has not
been corrupted by, for example,
transcription or keying errors, between its
initial collection and its use for Mineral
Resource estimation purposes.
The database used to create the geological model and mineral
resource estimation was created from manual data entry of hard
copy historical drill-hole logs and exploration records. The
Excel database was cross-checked against the original drill-hole
logs in the BVVG and K-Utec archives in Berlin and
Sondershausen respectively.
Data validation procedures used.
When the Excel database is imported into Micromine®
modelling software, a data validation exercise is run that
includes checking for missing samples, mis-matching samples
and stratigraphy intersections, duplicate records and overlapping
from-to depths. In addition, and where possible the sum of
chemical compounds was checked to ensure a total of 100%.
Site visits
Comment on any site visits undertaken by
the Competent Person and the outcome of
those visits.
The Competent Person visited Muhlhausen-Keula on two
occasions and incorporated visits to the archives of BVVG and
K-Utec and the surrounding area where there are currently
operating and now dormant Potash mines. The dates for the two
site visits are 12th -15th February 2018 and 6th - 8th March 2018.
If no site visits have been undertaken
indicate why this is the case. Not applicable
Geological
interpretation
Confidence in (or conversely, the
uncertainty of ) the geological
interpretation of the mineral deposit.
The confidence in the data used and geological interpretation of
the potash deposit is high due to the strict guidelines followed
during the historical exploration and adherence to the
Kali-Instruktion. In addition, the geological interpretation was
checked by several geologists during both the 1960s and 1970s
drilling campaigns. Lastly, the depths recorded in the
lithological descriptions and geophysical logs correspond,
providing confidence in the continuity of the potash horizons and
grade.
Nature of the data used and of any
assumptions made.
Since there are no records about some of the sampling protocols
and sample security, assumptions have been made that this was
done to a high standard based on the historical records. Due to
the historical nature of the data, it is sometimes unclear which is
the final version of the drill-hole log and this forms part of the
ongoing work that will be required to increase confidence in the
resources.
The effect, if any, of alternative
interpretations on Mineral Resource
estimation.
No alternative interpretations exist for previous Mineral resource
estimates.
The use of geology in guiding and
controlling Mineral Resource estimation.
The mineralisation is confined to the z2KSt horizon and this was
used as the initial basis for geological modelling prior to
applying cut-off grades.
The factors affecting continuity both of
grade and geology.
Some of the drill holes have a duplication of the z2KSt horizon
that suggests there is some localised folding and/or faulting.
This can only be tested when horizontal drilling can be done
from underground and face mapping.
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Criteria JORC Code explanation Commentary
Dimensions
The extent and variability of the Mineral
Resource expressed as length (along strike
or otherwise), plan width, and depth below
surface to the upper and lower limits of the
Mineral Resource.
The economic potash deposit covers the whole of the
Mühlhausen-Keula sub-area contained by the Mühlhausen-Nohra
mining licence with the exception of barren drill hole Kal Mda
3/1983. The mineral resource has been restricted by seam
thickness (>1 m) and grade (>5% K2O). The total mineral
resource area for the Mühlhausen-Keula sub-area is
141,581,481.7 m2 and the total Inferred Mineral Resources
tonnage is 1.13Mt. The minimum depth from surface to the roof
of the uppermost seam, the Upper Sylvinite seam, is ±830 m
towards the north of the sub-area. The modelled seam package
dips gently towards the southeast with the maximum depth
below surface reaching ±1000 m in the vicinity of drill hole Kal
Amr 1/1976.
Estimation and
modelling
techniques
The nature and appropriateness of the
estimation technique(s) applied and key
assumptions, including treatment of
extreme grade values, domaining,
interpolation parameters and maximum
distance of extrapolation from data points.
If a computer assisted estimation method
was chosen include a description of
computer software and parameters used.
The geological model and resource estimation for Mühlhausen-
Keula was carried out in Micromine® modelling software, which
is internationally recognised software used for modelling
stratiform deposits. The chemical database was first composited
according to stratigraphy. The composited database was
assigned a tag column to indicate if a sample was sylvite or
carnallite based on the mineralogical data. Where some
chemical data was missing, for example a number of drill hole
did not have MgSO4, a length weighted average dummy value
was assigned. For missing KCl values, the K2O was divided by
0.63. This database was composited using a minimum trigger of
5% K2O, a minimum grade length of 2 m, maximum total length
of waste of 2 m and a 1 m maximum consecutive length of
waste. Each drill hole was then examined and, based on
stratigraphy, sequence of mineralised layers and K2O composite
grades, the sylvinite or carnallite seams were further divided into
the Upper Sylvinite seam, Upper Carnallitite seam, Lower
Carnallitite seam and Lower Sylvinite seam. Roof and floor grids
were made for each of the four distinguished seams. The
minimum and maximum x and y origins used for gridding were
592000 (min x), 5674000 (min y), 610000 (max x) and 5690800
(max y). A grid cell size of 400 was used as this best fitted the
data when correlated in cross-section. An inverse distance
squared gridding algorithm was used, with a circular search area
and a 5,000 m search radius to cover the distance between data
points, one sector and maximum 1 point per sector. The roof and
floor grids were converted to wireframes surfaces and then DTM
surfaces for analysis. Lastly, two sets of solid wireframes were
created for Upper Sylvinite seam, Upper Carnallite seam, Lower
Carnallite seam and Lower Sylvinite seam using the roof and
floor surfaces. First set of wireframes represents the total extent
of potash mineralisation based on complete set of data provided.
Second set of wireframes represents the potash seam
mineralisation cropped by the project licence boundary.
The availability of check estimates,
previous estimates and/or mine production
records and whether the Mineral Resource
estimate takes appropriate account of such
data.
An historical Kali-Instruktion balanced C2 reserve and a JORC
Exploration Target exists for Ebeleben. Both are comparable to
the current Inferred resource in both grade and tonnage. There is
a slight difference in the carnallite grade and tonnage reported by
Micon, which is a result of the way the waste horizons between
economic zones were treated, where Micon applied a minimum
grade length of 2 m, a maximum total length of waste of 2 m and
a 1 m maximum consecutive length of waste.
The assumptions made regarding recovery
of by-products.
No assumptions have been made regarding by-products, there is
minor kieserite, but this has not been estimated at this stage.
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Criteria JORC Code explanation Commentary
Estimation of deleterious elements or other
non-grade variables of economic
significance (eg sulphur for acid mine
drainage characterisation).
The insoluble content has been reported for purposes of
metallurgical processing review and is not considered to be
significant.
In the case of block model interpolation,
the block size in relation to the average
sample spacing and the search employed.
A block model was not created.
Any assumptions behind modelling of
selective mining units.
No selective mining units were modelled. The resource was
modelled according to sylvite and carnallite so the low grade and
high grade areas can be distinguished.
Any assumptions about correlation between
variables. Not applicable.
Description of how the geological
interpretation was used to control the
resource estimates.
The geological model was first constrained to the z2KSt horizon
and then the mineralogical data was used to split this into an
upper sylvite and a lower carnallite unit. No structural blocks
have been defined, but future modelling will have to consider the
upthrown fault block identified by drill holes Kal KuSo 5/1977
and Kal KuSo 1/1957.
Discussion of basis for using or not using
grade cutting or capping.
A minimum cut-off grade of 5% K2O was used as this is
considered economic. No top cut was applied as the statistical
analysis of the data shows a normal distribution with no outlying
populations.
The process of validation, the checking
process used, the comparison of model data
to drill-hole data, and use of reconciliation
data if available.
The composited assay data was compared against original assay
data in cross section. Modelled wireframes were compared
against original stratigraphic interpretations and geophysical
logs. All correlated well.
Moisture
Whether the tonnages are estimated on a
dry basis or with natural moisture, and the
method of determination of the moisture
content.
Not applicable.
Cut-off
parameters
The basis of the adopted cut-off grade(s) or
quality parameters applied.
A minimum cut-off grade of 5% K2O was used as this is
considered economic. In addition, areas with a seam height of
<1 m were excluded.
Mining factors
or assumptions
Assumptions made regarding possible
mining methods, minimum mining
dimensions and internal (or, if applicable,
external) mining dilution. It is always
necessary as part of the process of
determining reasonable prospects for
eventual economic extraction to consider
potential mining methods, but the
assumptions made regarding mining
methods and parameters when estimating
Mineral Resources may not always be
rigorous. Where this is the case, this should
be reported with an explanation of the basis
of the mining assumptions made.
A minimum seam height of 1 m was used as a cut-off to take into
account potential mining height underground.
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Criteria JORC Code explanation Commentary
Metallurgical
factors or
assumptions
The basis for assumptions or predictions
regarding metallurgical amenability. It is
always necessary as part of the process of
determining reasonable prospects for
eventual economic extraction to consider
potential metallurgical methods, but the
assumptions regarding metallurgical
treatment processes and parameters made
when reporting Mineral Resources may not
always be rigorous. Where this is the case,
this should be reported with an explanation
of the basis of the metallurgical
assumptions made.
Processing specifically for Mühlhausen-Keula has not been
considered at this stage. Insoluble material has been modelled.
The South Harz area has historically been mined for decades and
there is a lot of local knowledge about the metallurgical
processes required.
Environmental
factors or
assumptions
Assumptions made regarding possible
waste and process residue disposal options.
It is always necessary as part of the process
of determining reasonable prospects for
eventual economic extraction to consider
the potential environmental impacts of the
mining and processing operation. While at
this stage the determination of potential
environmental impacts, particularly for a
Greenfields project, may not always be well
advanced, the status of early consideration
of these potential environmental impacts
should be reported. Where these aspects
have not been considered this should be
reported with an explanation of the
environmental assumptions made.
Mining will take place underground. Assumptions regarding
environmental factors have been based on the standards set by
surrounding potash mines in the area. Davenport has the
exclusive right to explore and/or produce and to appropriate the
respective mineral resources in a certain field. However, all
exploration and production activities require a mining permit
(Betriebsplanzulassung) to be applied for with the mining
authority.
Bulk density
Whether assumed or determined. If
assumed, the basis for the assumptions. If
determined, the method used, whether wet
or dry, the frequency of the measurements,
the nature, size and representativeness of
the samples.
The bulk density for both the sylvite and carnallite seams was
calculated by Ercosplan based on historical data. The bulk
density for each sample was calculated based on the derived
mineralogical composition. A weighted average was created for
sylvite and carnallite based on the samples. The average density
for Upper Sylvite is 2.26 t/m3 and 2.21 t/m3 for the Lower
Sylvinite, and 1.88 t/m3 for both Carnallite seams. densities
reported by Ercosplan were used by Micon.
The bulk density for bulk material must
have been measured by methods that
adequately account for void spaces (vugs,
porosity, etc), moisture and differences
between rock and alteration zones within
the deposit.
Not applicable.
Discuss assumptions for bulk density
estimates used in the evaluation process of
the different materials.
Not applicable.
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Criteria JORC Code explanation Commentary
Classification
The basis for the classification of the
Mineral Resources into varying confidence
categories.
The whole of the Mühlhausen-Keula sub-area has been classified
as an Inferred resource based on the quality and extents of the
drilling database that are sufficient to imply geological grade and
continuity for eventual economic extraction.
Whether appropriate account has been
taken of all relevant factors (ie relative
confidence in tonnage/grade estimations,
reliability of input data, confidence in
continuity of geology and metal values,
quality, quantity and distribution of the
data).
The location of Mühlhausen-Keula is in an area that has been
mining potash for decades. Whilst on site, the Competent Person
visited the area where the old Volkenroda ventilation shaft was
sunk and other operating underground mines and solutions mines
in the neighbouring area such as Bleicherode.
Whether the result appropriately reflects
the Competent Person’s view of the deposit.
The stated tonnage and grade are considered an appropriate
reflection of the Competent Persons view of the deposit.
Audits or
reviews
The results of any audits or reviews of
Mineral Resource estimates.
Between 1980 and 1987 historical resource estimates were
reported for three sub-areas of the Mühlhausen area including
Mühlhausen-Keula. The exact areas of the three resources were
slightly different to the current mining licence boundary. The
historical resource estimations were conducted by VEB
Geological Research und Exploration. The total C2 balanced
resources was 299.2Mt at a K2O grade of 14.05%. In 2017
Ercosplan estimated a JORC complaint Exploration Target with
a total tonnage range of 1,182 – 1,635Mt at a K2O grade of 7.91
– 14.31%.
Discussion of
relative
accuracy/
confidence
Where appropriate a statement of the
relative accuracy and confidence level in
the Mineral Resource estimate using an
approach or procedure deemed
appropriate by the Competent Person. For
example, the application of statistical or
geostatistical procedures to quantify the
relative accuracy of the resource within
stated confidence limits, or, if such an
approach is not deemed appropriate, a
qualitative discussion of the factors that
could affect the relative accuracy and
confidence of the estimate.
The stated resource tonnage and grades stated are considered
based on the detailed drill-hole database and 3D modelling. The
use of the inverse distance squared method is considered
appropriate for Mühlhausen-Keula as the drill holes are
relatively far apart, the mineralised zone is flat lying, mineral
zones are clearly defined and grade is relatively consistent.
The statement should specify whether it
relates to global or local estimates, and, if
local, state the relevant tonnages, which
should be relevant to technical and
economic evaluation. Documentation
should include assumptions made and the
procedures used.
This statement relates to the global Mühlhausen-Keula resource.
These statements of relative accuracy and
confidence of the estimate should be
compared with production data, where
available.
Not applicable.
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Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral Resource estimate for
conversion to Ore Reserves
Not applicable for this report
Site visits
Study status
Cut-off parameters
Mining factors or assumptions
Metallurgical factors or assumptions
Environmental
Infrastructure
Costs
Revenue factors
Market assessment
Economic
Social
Other
Classification
Audits or reviews
Discussion of relative accuracy/
confidence
Section 5 Estimation and Reporting of Diamonds and Other Gemstones (Criteria listed in other relevant sections also apply to this section. Additional guidelines are available in the
‘Guidelines for the Reporting of Diamond Exploration Results’ issued by the Diamond Exploration Best Practices
Committee established by the Canadian Institute of Mining, Metallurgy and Petroleum.)
Criteria JORC Code explanation Commentary
Indicator minerals
Not applicable for this report
Source of diamonds
Sample collection
Sample treatment
Carat
Sample grade
Reporting of Exploration Results
Grade estimation for reporting
Mineral Resources and Ore Reserves
Value estimation
Security and integrity
Classification
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18.0 APPENDIX 2
Upper Carnallite K2O Distribution
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Lower Carnallite K2O Distribution
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Lower Sylvinite K2O Distribution
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Upper Carnallite Seam Thickness (m)
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Lower Carnallite Seam Thickness (m)
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Lower Sylvinite Seam Thickness (m)