Patience Lake Member - Operating (KL) Abstract S.M.R.I. Fall 2010 2a Prince Albert 3a Exploration-Stage Mineral Resource Estimation North Melfort Solution Mining Research Institute Fall 2010 Technical Conference Wainwright Melfort Leipzig Germany 6-8 October 2010 Tisdale Battleford 30 a16 EXPLORATION STAGE MINERAL RESOURCE ESTIMATION OF a16 10 Of Potash Deposits: A Status Report ± POTASH DEPOSITS: A STATUS REPORT 1 50 1 2 0 a 0 6 Warman Saskatoon Stephen P. Halabura P.Geo. F.E.C. (Hon.) - Speaker 0 0 8 Saskatchewan 3 Swan River 30 PCS Cory www.northrim.sk.ca PCS Patience Lake Solution Mining Research Institute Fall 2010 Technical Conference PCS Patience Lake Lola M. Piche P.Geo., Earl Gebhardt P.Eng.,Tanner Soroka G.I.T. 70 50 [email protected] 6 60 Agrium Potash Mosaic Colonsay 0 PCS Cory PCS Allan North Rim Exploration Ltd., Saskatoon, Saskatchewan, 0 7 Agrium Potash Mosaic Colonsay 5 0 PCS Lanigan 4 a

0 1 0 PCS Allan 3 16 1 0

6 0 a0 20 6 6 30 Abstract 6 0 6 0 40 4 0 0 Member Thickness 0 a 1 0 7 3 0 PCS Lanigan 2 3 4 6 1 16 0 0 (in metres) a 0 This paper presents a broad overview of the development of methods for 4 Potash Members in Saskatchewan determining and reporting mineral resources and reserves for greenfield 3 1 0 conventional and solution mining potash projects arising in Saskatchewan during 50 0 a5 Carrot River 2 a2 5 the recent global potash boom. In Saskatchewan, the renewed potash activity Melville 6 Shellbrook Yorkton began in 2005 after a hiatus of almost 35 years. This “lost generation” required 0 6 5 0 25 50 75 km 2 4 0 0 0 Maidstone exploration specialists to return to first principles in their task of assessing new Mosaic Potash K1 1 2 Prince Albert 5 a Arborfield conventional and solution mining potash prospects. 0 Mosaic Potash K2 Regina 4 5 0 Projection: UTM Zone 13N, WGS84 Melville 0 PCS Saskatchewan Canadian technology, mining practices, and financial reporting standards 1 30 2 a 10 0 Wainwright changed dramatically from those in effect during the previous exploration and a14 Mosaic Belle Plaine 6 development period of 1960 to 1971. All of Saskatchewan’s present advanced a NU Mosaic Potash K1 Star City YT Hudson Bay CR 837 Outline greenfields potash development projects, for instance, BHP Billiton’s Conventional Mining S a s k a t c h e w a n Tisdale NT Mosaic Potash K2 Virden (Conceptual) Battleford Duck Lake a41 Melfort C A N A D A conventional mining Jansen Project and Potash One’s solution mining Legacy 0 Regina Project, originated from pre-existing 1960’s advanced exploration projects. For 9 40 2 2 a a PCS Rocanville a NL the Jansen Project, this involved the exploration work of Kerr McGee Industries a16 Swift Current 1 Assiniboia Waldheim a Ltd. and for the Legacy Project, the work of Imperial Oil Ltd. These exploration Moose Jaw Mosaic Belle Plaine 23BC AB SK QC a1 a MB programs have historical exploration data as their foundation. In such cases, the 0 50 100 150 kms 3 Map Area 1 Hague PE challenge is to evaluate the vintage dataset with all its limitations and restrictions 0 Unity Calgary NB Radisson Cudworth Vancouver Saskatoon Winnipeg NS Provost 14 0 50 100 kms from the viewpoint of current technical, design, and financial requirements. a 2 ON Ottawa Macklin 1 Scott a Vonda Langham Osler Toronto One of the critical challenges faced by Saskatchewan potash exploration and Dalmeny Warman Aberdeen development firms was the requirement to undertake exploration activities that Rose Valley U S A the National Instrument 43-101 Resources and Reserves Reporting Standards. Bruno a

1

0 Humboldt The NI43-101 Standard defines “Resources” in terms of three categories – Saskatoon Kelvington

Luseland Asquith Swan River Inferred, Indicated and Measured. The Inferred Mineral Resource can be 5

Watson 49 9 3

PCS Patience Lake a a A l b e r t a Biggar PCS Cory a estimated and reasonably assumed but not verified in terms of geology, grade Conventional Mining continuity, and assay verification, and the Indicated Mineral Resource can be

Kerrobert No Current a Leroy 5 estimated with a level of confidence sufficient to allow the appropriate application Belle Plaine Member Agrium Potash 1 Colonsay a M a n i t o b a Saskatchewan - Advanced (KP) 1 (Development) Delisle Wadena of technical and economic parameters, so as to support mine planning and 2b Prince Albert Mining Method PCS Allan Allan Mosaic Colonsay Outline of Potash Dispositions 3b evaluation of the economic viability of the deposit. In many cases, vintage drill a31 Dundurn PCS Lanigan (CR 837) North Battleford Melfort hole and seismic data was insufficient to support a resource estimate with a confidence level greater than the “Indicated” category; therefore the question Wainwright North Battleford Melfort Wynyard Tisdale a16 facing exploration geologists and engineers was “what then IS the proper Battleford Watrous Canora exploration dataset so as to obtain proper confidenc e in the deposit’s viability so Zealandia Hanley a16 1 as to proceed with advanced mine planning?” 10 a6 Rosetown 1 Kindersley 1 a7 a ± Nokomis For Saskatchewan deposits, it is important to realize that the mineral estimation Saskatoon Warman40 Outlook 15 Oyen a9 a procedure is essentially subtractive –from the initial volume calculation, a set of PCS Cory 0 PCS Patience Lake Swan River 5 Humboldt Raymore Saskatoon Saskatchewan Agrium Potash deductions is tallied to arrive at the final resource tonnages. The process of 9 PCS Patience Lake

1 Springside 5 Mosaic Colonsay a PCS Cory 0 a570 Imperial KP 308 generating potash mineral resource estimates can be broadly summarized in the 10 Govan KP 290 0 40 Roblin Agrium Potash Mosaic Colonsay following ten sequential steps used to construct a “Mineral Resource Estimation PCS Allan 4 PCS Lanigan 60 Davidson a PCS Allan 1 0 3 16 Elrose 44 Yorkton 5 Model”: 5 0 50 1 a a 0 Eston a 0 2 KP 286 5 Member Thickness a a PCS Lanigan KP 285 5 1 0 0 8 5 1 16 Kindersley 3 (in metres) KPa 360 a) Determination of total area of potential potash resource within 3 0 40 30 30 Yorkton Strasbourg Saltcoats KP 287 permit/tenement area; 2 Craik 0 0 2 0 4 b) Subtraction of land area not controlled by the permit / tenement 0 2 a 1 50 Leader No Current Mining Method Bredenbury holder(s); Southey Cupar Churchbridge 0 c) Emplacement within estimation model of drill holes that provide required Melville 3 Kyle Melville Langenburg Yorkton 30 a32 Conventional Mining a data, and selectio n of “radius of influence” (“ROI”) for required calculation Mosaic Potash K1 8 Russell Balcarres (Development) levels (e.g. inferred versus indicated); 4 Mosaic Potash K2 Fort Qu'Appelle a 0 1 Fenwood 0 Burstall Lemberg 6 5 North Block d) Calculation of areas contained within drill hole ROIs, net of portions of Regina Mosaic Potash K1 30 PCS Rocanville Solution Mining Esterhazy 1 30 Cabri Mosaic Potash K2 South Block ROIs falling within lands not controlled by permit / tenement holder(s); Swift Current a Lumsden Melville Moose Jaw Mosaic Belle Plaine 20 (Conceptual) Example Township e) Determi nation of mineral estimation calculation interval, i.e. the base and CR 837 Outline Mosaic Potash K1 top of zone for which an estimate is to be generated , using selected drill 10 Shown in Procedure 4b a KP 289 Mosaic Potash K2 hole data (e.g. borehole geophysical logs, assay records, etc.); Regina Pilot Butte Qu'Appelle PCS Rocanville Birtle KP 335 Virden Herbert f) Calculation of gross mineral volume, using spec ific gravities determined 1 Morse Mosaic Belle Plaine Wolseley Grenfell Rocanville 0 Broadview Mosaic Belle Plaine PCS Rocanville by mineral composition of potash bed(s); Weyburn 3 4 0 0 Solution Mining Whitewood Swift Current KP 336 KP 337 7 1 g) Subtraction of volume affected by solution collapse, unfavorable 2 3 Moose Jaw a Assiniboia 0 a (Development) Wapella Moose Jaw Regina mineralogy (i.e. carnallitite as opposed to sylvinite), and/or other mining 30 0 50 100 150 kms a1 Swift Current factors (e.g. depth of beds); Rouleau Moosomin h) Subtraction of volume left as pillar support material as determined by Estevan Gull Lake 0 50 100 kms 30 Kipling Fleming mining extraction ratio; 30 Francis

a1 Irvine 4 i) Subtraction of any other required pillar material (e.g. property/boundary a a1 pillars, pillars surrounding individual drill holes, etc.). Maple Creek Milestone Mossbank j) Net remaining tonnage, expressed as “tonnes KCl” or “tonnes K2O” depending upon client requirements. a33

Yellow Grass A review of public record reports of resource estimates show s that typical ROI for Legend the Inferred category ranges from 1.5km up to 8.05km while the Indicated Lafleche Esterhazy Member ! Solution Mining Saskatchewan - Exploratory (KP) Shaunavon Drill Hole 7 Stoughton

4 category is more consistent at 1.6 km and the Measured at 0.8km (half the a 2c Prince Albert  Assiniboia a13 (Conceptual) Potash Mine Redvers 3c Indicated resource) . The decrease in ROI reflects the requirement for higher Weyburn a2 Ogema levels of confidence in deposit continuity required for the Indicated and Measured Areal Extent of the Potash Members North Battleford Melfort categories. In each estimation case, it is the opinion of the authors that 2D and Wainwright Melfort a39 North Battleford CR 837 Outline (Potash) 3D seismic is critical for area calculations. Tisdale Battleford Mining Method Division Line Willow Bunch Bengough a16 Key words: Potash, Sylvite , Solution Mining, Saskatchewan Potash Deposits, 1 Salt Solution Collapses 6 a6 a501 a Alameda Geology of Sylvinite , Potash Exploration, Potash Mineral Reporting Standards Oxbow 1 township 1a ± Warman 3 Mining Method a Saskatoon Swan River Saskatoon 5 Saskatchewan PCS Cory PCS Patience Lake 0 18 Conventional Mining Coronach a Estevan PCS Patience Lake Mosaic Colonsay 10 PCS Cory Hybrid Mining Agrium Potash PCS Allan Mosaic Colonsay Final Estimation Of 0 PCS Lanigan Agrium Potash a 4 PCS Allan 1 16 Solution Mining 1 60 50 a

0 Member Thickness 10 0 PCS Lanigan 6 a Saskatchewan Potash 8 1 0 5 0 (in metres) North Dakota 0 1 6 4 0 Montana Kindersley 0 6 0 6 7 16 20 7 a 30 0 0 Yorkton 5 0 4 3 60 Potash Resources Remaining Within CR 837

1 Melville 0

3 Yorkton 4 0 0 20

0 30 Mosaic Potash K1 2 0

5 5 Mineral Resource Estimation Example - Practical Procedures And Results From A Geomatics Perspective 23,452,483,336 m Regina 50 Mosaic Potash K2 4 4b 0 Melville 1 PCS Rocanville Swift Current a 40 Mosaic Belle Plaine Development 2 Moose Jaw 35,233,264,218 m ! ! ! ! ! Mosaic Potash K1 2 CR 837 Outline 0 Mosaic Potash K2 3 0 800m Radius 13,904,351 m 0 1 Virden 2 Regina Measured PCS Rocanville Weyburn Swift Current 1 0 a Assiniboia 1 ! ! ! ! ! No Current Mining Method ! ! ! ! 2 ! Moose Jaw Mosaic Belle Plaine 20 ! ! ! ! 32,759,528 m ! 6b 0 50 100 150 kms ! ! ! ! ! 3 Indicated Estevan 0 Drill Hole 0 50 100 kms Legend 30 ! ! ! ! ! Conventional Mining Development ! ! ! ! ! Hybrid Mining 6c Measured Solution Mining Potash CR 837 2 ! ! ! ! ! 8,534,316,631 m

Potash Dispositions Project Boundary 1600m Radius Indicated Townships Within Each Mining Method Determination of "Radii of Influence" Step 1 Step 2 Step 3 Step 4 Step 5 6a 4a Property outline with drill holes Potash dispositions "clipped" 800m measured and 1600m indicated Bisectors drawn for both measured Measured and indicated resource areas Mineral Zone - Solution Mining Case Macro view of potash tonnages in the three zones of and potash dispositions to property outline "raw" buffers around drill holes and indicated mineral resources are "clipped" to the property boundary 5 potash dispositions (CR 837) in Saskatchewan Prairie Evaporite: Class Type Radius Analog for Radius Operator of Property Author of Report Comments (permit or tenement lands) Mineral Zone - Belle Plaine and Esterhazy members at a depth of approximately 1500 metres. 1. Total Townships (approx. 100 sq. kms) that could fit Historical New Conventional Solution Inferred Indicated Measured Determination Used radius 1 Township Parameters: mineral resource thickness = 30 metres, weighted average grade = 27% KCl in the "Conventional Mining" area (see figure above) = 234 Athabasca (Burr) Susan Lomas, P.Geo. XXX 1.50 km AMEC polygons for drill hole influence with a gross area of 100 square kilometres. 2. Total Townships (approx. 100 sq. kms) that could fit No exploration or Freehold Collapse Dr. Michael Hardy P.E., measurement of in the "Hybrid Mining" area (see figure above) = 352 Potash North (Langenburg) Mr. S. P. (Steve) Halabura, XX Including Gross tonnage = 30m x 10,000m x 10,000m x 2.08 tonnes per cubic metre = 6,240 million tonnes resource done P.Geo. ! ! ! ! ! prior to report Buffers in 100 square kilometres (or approx. 1 township) - See: Step 8 of Procedure 4b 3. Total Townships (approx. 100 sq. kms) that could fit Dr. Michael Hardy P.E., 2 Mosaic Company at the Potash One (Findlater) Mr. S. P. (Steve) Halabura, X X 8.05 km 1.60 km 0.804 km 2 11,722,742 m in the "Solution Mining" area (see figure above) = 85 Belle Plaine operations P.Geo. 27,694,838 m Measured "South" Block Dr. Michael Hardy P.E., Indicated Potash One (Findlater) XX 1.608 km 0.804 km Internally defined drilling, 2D and Volume & Tonnage Calculations Debbie Shewfelt P.Geo. ! ! ! ! ! Total Townships Within Mining Zones = 671 3D seismic ! ! ! ! 2 ! 5a ! 2 ! ! ! 22,646,047 m ! Dr. Michael Hardy P.E., Mosaic Company at the ! ! ! ! ! 2 3 Raytec (Langham) X 8.05 km 1.60 km 0.804 km 12,848,690 m Indicated Resource CategoryNet Areas (m ) Net Volume (m ) Converted To Net Tonnes Net Tonnes Sylvite Joseph E. Crawford L.P.G. Belle Plaine operations Measured Approx. km 10 Tonnage For Solution Mining - No Current Mining Method Karnalyte (Quill) S. P. (Steve) Halabura P.Geo. X 6.00 km 1.60 km 3D Seismic Coverage ! ! ! ! ! S. P. (Steve) Halabura, P.Geo., Indicated 22,646,047 679,381,410 1,413,113,333 381,540,600 6b BHP Billiton (Jansen) X Earl Gebhardt P.Eng. ! ! ! ! ! no known mineral 182 Million Tonnes Per Township x 352 Townships = 64,204,549,192 resources or Measured 11,722,742 351,682,260 731,499,101 197,504,757 Western Potash Clifford Duke, P. Eng XX mineral reserves ! ! ! ! ! (Manitoba) on the Western Carnallite Potash property Including Approx. 10 km Totals: 34,368,789 1,031,063,670 2,144,612,434 579,045,357 64 Billion Tonnes of KCl 3D seismic 64 Billion Tonnes of KCl S. P. (Steve) Halabura, P.Geo., and additional Step 6 Buffers Anglo Minerals (Jansen) Earl Gebhardt P.Eng., XX 3.20 km 1.60 km advanced Step 7 Step 8 Step 9 Step 10 Ken Kuchling P.Eng. geotechnical Final Net Tonnes KCl studies Non-permit and/or tenement areas Solution collapses and other anomalies Remainder of measured and indicated Measured resource areas remaining Indicated resource areas remaining are subtracted from both (including their buffers) resource areas after being "clipped" by 5b measured and indicated are mapped to see if they solution collapses Resource CategoryNet Tonnes @ 35% Extraction Ratio 10% Plant / Cavern Losses Final Mineable Resources Tonnage For Solution Mining Development Data Sources: 6c affect resource areas 1. Dispositions: Saskatchewan Energy and Resources, 2009 (Atlas of Saskatchewan) Indicated 381,540,600 133,539,210 13,353,921 120,185,289 182 Million Tonnes Per Township x 85 Townships = 15,503,939,436 2. Potash members & contours: Sask. Ministry of Energy and Resources Geological 0 2 4 6 8 10 kms Map, 2009 by C. Yang, G.K.S. Jensen, and J. Berenyi (Open File 2009-24) Measured 197,504,757 69,126,665 6,912,666 62,213,998 3. Salt Solution Collapses: Saskatchewan Energy and Mines, Potash in Saskatchewan, 1982 by Anne Fuzesy (report 181) 0 2 4 6 miles Totals: 579,045,357 202,665,875 20,266,587 182,399,287 1515 BillionBillion TonnesTonnes ofof KClKCl

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