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Mesa Exploration’s Permit to Develop Potash Mine in Utah Rejected

Utah can be considered as one of the hubs for potash mining in the United States. As one of the few potash-producing US states, Utah plays host to both producers and exploration companies, including Potash Ridge, EPM Mining Ventures, Intrepid Potash, Potash Minerals and Mesa Exploration. However, although the potential for potash development is generally strong, in light of the growing demand and food security needs, these clear fundamentals are not a sufficient argument to eliminate the bureaucratic red tape, such as when recently the Bureau of Land Management (BLM) rejected the prospecting permit for further exploration at Mesa Exploration’s Bounty potash project. The BLM cited as the reason the historic California Trail intersects Bounty.
Mesa Exploration was looking into the development of a potash mine on a dried lakebed known as the Pilot Valley Play. More precisely, while some exploration work was conducted already as early as in the late 1960s, when Quintana Petroleum drilled some 35 auger holes resulting in the definition of 5.1 million tons of potash, as these results were not NI 43-101 compliant, the company did not follow up with its plans. Forward some 50 years and in late July 2012, Mesa informed investors that “[a]s part of the permitting process the BLM is now reviewing historic geologic and hydrologic investigations done at the site. … Mesa’s proposed exploration plan will be evaluated by the BLM for environmental impacts and once approved the program will commence. Because the area is a lifeless, barren salt flat there are no anticipated environmental or permitting issues. Drilling should begin in the next few weeks.”
However, the investors were not aware of the fact only 3 months later, Mesa Exploration received notice from the BLM regarding the project saying that Bounty is bisected by a “high potential route segment,” and, as since public interest is at stake and keeping in line with the BLM’s Resource Management Plan (RMP), the permit was rejected. Responding to the mounting criticism that this important piece of information was kept away from the investors, Foster Wilson, CEO of Mesa, explained that the company was optimistic that it could fix the problem without too much hassle. Mr. Wilson also stressed that this announcement was not made back in 2012 because “we had indications from people we had lobbied with — at both federal and state levels — that we might be able to get that denial dismissed,” he told Potash Investing News (PIN). Although Mesa also issued a 15-page settlement proposal to clarify the company’s plans and objectives, its proposal was rejected and the company disclosed the issues only recently – in June 2014.

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