A Glance At Parkway Minerals’ Key Strategic Investment

Australian-headquartered exploration firm, Parkway Minerals (ASX: PWN) is a fertiliser developer that regulates huge quantities of raw materials close to mature and emerging markets. Those raw materials include large greensand deposits present in the Dandaragan Trough, located at only 150 kms north of Perth and near to the coast of Western Australia (WA).

Parkway currently holds 100 per cent interest in two significant projects in WA, including the Dandaragan Trough Project (DTP) and Lake Seabrook Project. As an aspiring fertiliser minerals firm, Parkway has been assessing the potential viability of the DTP as a source of potash and phosphate for many years.

The company also holds 1.2 per cent interest (~6.5 million shares) in Lithium Australia NL (ASX: LIT), a company focused on battery technology, lithium extraction and lithium recycling. Parkway is also planning to acquire an Australian-headquartered Consolidated Potash Corp (CPC) in order to expand its existing product portfolio.

Besides Australia, Parkway has also extended its footprint across Germany via a strategic investment (~44 million shares) in Davenport Resources Limited (ASX: DAV). Let us take a deep dive into the details of Davenport Resources below:

Parkway’s Key Strategic Investment – Davenport Resources

Parkway, the largest shareholder in Davenport Resources, holds approximately 31 per cent interest in DAV, which focusses on the exploration of potash in the South Harz region of Central Germany. Davenport, which owns three mining licences (Mühlhausen-Nohra, Ebeleben, and Ohmgebirge) and two exploration licences (Küllstedt and Gräfentonna) in the South Harz region, has been enjoying substantial success in developing potash resources in Germany.

Davenport’s South Harz Project covers a total area of approximately 659km². Over the 22-year period between 1970 and 1992, more than 500MT of potash ore were extracted from the South Harz region, resulting in the production of over 100MT of potash fertiliser.

South Harz Project Location, Source: Company’s Report (31^st July 2019)

Davenport’s portfolio of resources represents Western Europe’s largest potash inventory and contains several significant projects. Davenport controls over 4.9 billion tonnes (grading 10.6 per cent K₂O) of JORC Inferred Resource from its Mühlhausen-Nohra and Ebeleben mining and Küllstedt exploration licences, including 1.6 billion tonnes of Sylvinite grading 13.1 per cent K₂O. Approximately 75 per cent of the potash resource (1,205 million tonnes) at the Küllstedt project consists of carnallitite grading at 10.1% K₂O, which may be amenable to primary solution mining.

Recently, Parkway has also facilitated joint discussions between DAV and CPC, to explore the optimal pathway for adding value to Davenport’s project portfolio.

Parkway’s Existing Projects

Let us take a quick look at the company’s existing projects below:

Dandaragan Trough Project (DTP)

Dandaragan Trough hosts one of the world’s largest known greensand deposits, containing abundant potassium and phosphorous. The Dandaragan Trough Project possesses great infrastructure with access to rail, roads, towns, power, gas and water, along with two major export ports and fertiliser plants at Geraldton and Kwinana which are less than 200km away.

The current JORC compliant Indicated and Inferred Potash Resource stands at 910 Mt @ 3.8% K₂O, while the Indicated and Inferred Phosphate Resource is at 630 Mt @ 1.9% P₂O₅ at Dandaragan Trough.

Lake Seabrook Potash Project (LSPP)

The Lake Seabrook project is a salt lake located at the northeast of Southern Cross, in the Wheatbelt region of WA, very close to the Perth-Kalgoorlie rail line. Parkway has around 101 sq km. of granted tenure across the lake surface.

Recently, three brine samples collected from the central part of the lake system have delivered promising potassium concentrations of 4,209 mg/L, 2,521 mg/L and 2,616mg/L.

Parkway’s Potential Projects

Parkway has recently executed a binding terms sheet with Consolidated Potash Corp to acquire 97.79 per cent of the issued capital of CPC, with an intention to acquire the remaining 2.21 per cent in future.

With the complete acquisition of CPC, the company will get direct ownership interests in two highly prospective brine projects:

• New Mexico Lithium Project (NMLP, Central Lordsburg Playa)
• Karinga Lakes Potash Project (KLPP)

New Mexico Lithium Project (NMLP)

The acquisition of CPC will offer Parkway an ownership interest in New Mexico Lithium Project (NMLP) in which CPC initially holds 50 per cent interest, with a right to increase to 100 per cent. NMLP is an ideally located project with major gas, rail, road and power infrastructure passing through or adjacent to the project area.

Source: Company’s Report (5^th August 2019)

The historical sampling at the project and of nearby source rocks has detected anomalous K (%) and Li (ppm) which is considered to have been concentrated in the central playa covered by the project.

Karinga Lakes Potash Project (KLPP)

CPS initially holds 15 per cent interest in the Karinga Lakes Potash Project in the Northern Territory and has the right to acquire up to 40 per cent interest through a staged investment of further $2 million. The project is ideally located, with major road and rail infrastructure located near to the project, along with regional gas options.

Source: Company’s Report (5^th August 2019)

Parkway is adopting an accelerated business plan with an objective to determine the highest priority opportunities following the completion of CPC acquisition. The company is also planning to establish a collaborative partnership to explore opportunities and support Davenport Resources development plans in the near future.

PWN last traded on 6^th September 2019 at AUD 0.006.

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