The Lake Disappointment project is comprised of 9 Exploration Licenses, 1 Miscellaneous Licence, 1 Mining Lease and 2 applications covering approximately 3,327km2 over the playa lake of the same name. An Access and Heritage agreement was executed, in February 2006, between the Martu People and the Company in respect of Exploration Licenses E69/2156-2159 and E45/2801-03.
The negotiations over the Lake Disappointment tenure progressed throughout the 2006 calendar year. Several meetings occurred between the Company and the Traditional Owners (Martu People) to discuss access matters and the Company’s plans for exploration and possible development at Lake Disappointment. One of the meetings with the Traditional Owners was on site at Lake Disappointment to discuss the significance of the area to the Martu People and areas of possible disturbance by Company activities should development proceed.
At subsequent meetings held with the community leaders and their legal representatives, the Company outlined its proposals for exploration and development. A forum was held in October 2006 at Punmu, where the proposals were presented to the broader Martu community for approval. Agreement was reached with the Martu Traditional Owners permitting the Company access to substantial areas of Lake Disappointment for exploration. The Company has provided undertakings not to enter or disturb certain areas of the lake highlighted by the Traditional Owners as of sensitive heritage value.
On the basis of this agreement and permitted access the Company prepared a Section 18 (Aboriginal Heritage Act) submission seeking approval for the exploration activities necessary for Reward Minerals Ltd to establish the potential of Lake Disappointment as a Potash resource.
The Section 18 submission was lodged with the Dept of Indigenous Affairs for presentation at the December, 13, 2006 meeting of the Aboriginal Cultural Material Committee (ACMC) for approval and ratification. The outcome of the ACMC meeting was favourable with a recommendation to the Minister for Indigenous Affairs that she ratify the Section 18 consent allowing Reward Minerals’ exploration activities to commence at Lake Disappointment.
In January 2007, Ministerial approval was received from the acting Minister for Indigenous Affairs, Hon Jon Ford JP MLC. Consent was granted for access and the use of the Land at Lake Disappointment exactly as sought in the Section 18 submission to the ACMC.
The granting of consent allowed for the comprehensive drill assessment of the Lake Disappointment potash resource. Global Groundwater Pty Ltd were contracted to conduct the hydrogeological assessment of the Lake using a ‘Geoprobe rig’ in conjunction with trenching and pump testing, to enable a JORC standard resource estimate to be generated.
A total of 30 holes were drilled using a purpose built ‘Geoprobe’ rig, transported over the Lake by helicopter. The core retrieved from the lake was collected in sealed tubes that recover the Lake sediments as well as the entrained brine for the interval.Drilling was carried out on a nominal 5km x 5km grid (accommodating the Traditional Owners restricted areas), being the drill spacing required for a JORC compliant resource based on a variography study carried out by RSG Global.
The drilling has determined that the lakebed sediments are at least 3 metres and up to 10 metres in thickness, averaging 4.1 metres. Heavy brine flow was encountered in every hole. A drill hole location plan is appended.
In addition to the drilling, a test-pumping programme was carried out by Global Groundwater Pty Ltd. Pumping was done at three separate trench sites to define the brine flow characteristics of the lakebed sediments.
The results of the drilling and pumping testwork were used to compile an independent, JORC compliant, Indicated Resource estimate for the Lake Disappointment potash deposit.
The resource estimates for total contained Sulphate of Potash (SOP) are as follows:
7,705 Mt @ 3.17kg/t for 24.43 Mt K2SO4
8,635 Mt @ 3.17kg/t for 27.37 Mt K2SO4
The difference between the upper and lower figure relates to depth and area assumptions for the lake margins.
The average potassium sulphate (SOP) content per tonne of lakebed sediment is derived from the analysis of the whole drill core. The average of 3.17kg/t translates to 6.17kgSOP/m3 of lakebed material. Higher grade areas of the lake reported 10.40 kgSOP/m3.
In practice the recovery of SOP will be via the (solar) evaporation of the entrained brines. Brine samples drawn from drill holes have returned SOP values as high as 20.01g/L. Of significance is the average (arithmetic mean) SOP value of 12.56g/L for all brine samples collected. Vigorous brine flow was encountered in all of the holes drilled. Brine flow parameters are currently being determined.
SOP is used extensively as a potash source in fertilizers. Imports of potash to Australia currently exceed $200 million per annum at the retail level. The current base price (June delivery) for SOP is $632/tonne, giving the in situ resource a value ca $15 billion for Lake Disappointment. There are no potash producers in Australia and thus imports currently account for 100% of the nations potash requirements.
The Company is maintaining the Lake Disappointment Exploration Licences and continuing with metallurgical testwork required for future production of potassium sulfate from Lake Disappointment.
On 23 December 2011, Reward reached agreement with the Western Desert Lands Aboriginal Corporation (“WDLAC”) and the Martu people on terms and conditions of a Mining and Indigenous Land Use Agreement (ILUA) applicable to the development of the Lake Disappointment Potash Project by Reward.