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Mesa Exloration Corp. – Developing the Bounty Potash Project

Mesa Exploration Corp.

Overview

Mesa Exploration Corp. (TSXV:MSA)  is a mineral exploration and development company with a diverse portfolio of projects, including potash, lithium and uranium in the western United States. All projects are solely owned by Mesa, except the Holbrook Potash Project, which was announced as a joint venture with Passport Potash in September 2010. The Company’s premier project is the Bounty Potash Project in Utah, for which Mesa is creating a work program. Mesa has already undertaken significant drilling for two other projects. Mesa recently acquired the Bounty Potash Project, Utah in January 2012.

Investment Highlights

  • High potential of Bounty Potash Project
  • Good access and infrastructure to all Mesa’s projects, also in mining friendly jurisdictions
  • Small share float/tight structure and large insider ownership (34%)
  • Debt-free, premier portfolio, seasoned management

Key Properties

Bounty Potash Project, Great Salt Lake Desert, Western Utah

Mesa Exploration acquired the Bounty Potash Project in January 2012. The project is situated 15 miles north of Intrepid Potash’s Wendover mine and consists of 90 square miles of potash permit applications from the Bureau of Land Management. The Bounty project appears to be the same size and grade as Intrepid’s Wendover mine, a similar type of deposit. The project consists of 104 square miles of potash leases and prospecting permit applications, located on a lifeless salt flat in the Great Salt Lake Desert of western Utah.  The mineral deposit at the Bounty project is a potash-rich brine aquifer hosted in near-surface sand-silt-clay beds. These types of deposits are well known and understood from an exploration, development and production perspective.

Mesa Exploration are expecting a drill permit for the project this coming Spring and plan to drill 40 shallow auger wells by mid-summer. The Company also hopes to generate a PEA by the end of the year.

Green Energy Lithium Project, Utah, United States

The Green Energy Lithium Exploration Project hosts to a mineral-rich brine deposit that containing 40% dissolved solids with values as high as 1,700 ppm lithium. In the 1960s, this super-saturated brine was discovered when oil exploration wells encountered blow-outs with brine flowing at up to 1,000 gallons per minute. The brine is hosted in Bed #31 of the Paradox Formation at a depth of 6,000 feet. As pressure chokes were not used for drilling, the minerals in the brine were allowed to become crystalline and eventually the drill stem became clogged. Efforts to clear the drill stem were unsuccessful and exploration work ceased; modern techniques will keep this from occurring.

A work program is being scheduled by Mesa to obtain modern brine samples for chemical analysis and metallurgical testing. Engineering characteristics of the host formation will also be tested to establish pressure, temperature, artesian and precipitation characteristics of the aquifer. The information collected in this drilling will provide the basis for preliminary economic evaluation and metallurgical testing.
Brine mines are more economic to mine and can be put into production faster and with less CAPEX than conventional open-pit or underground mines. Brine is also less expensive to process than hard rock mines. According to estimates by Credit Suisse, lithium produced from brine costs around $1,500 to $2,300 per ton, while lithium from hard rock mines costs $4,200 to $4,500 per ton.

Lisbon Valley Project, Utah, United States

The 43 square kilometre, wholly-owned Lisbon Valley Project is located in the Lisbon Valley Mining District, San Juan County, Utah, approximately 56 km south of the town of Moab. The Lisbon Valley area is a world-class uranium mining district that has seen a past production of over 100 million pounds of U3O8. Of the major mines in the district, none of them were exposed at the surface. The discoveries were all were made by wildcat exploration drilling.

Mesa Exploration is pursuing the concept that 1/2 of the district has remained buried and undiscovered on the down-faulted, eastern flank of the Lisbon Valley anticline. The area has a history of 65 million pounds of U3O8 uranium production that came from 15 mines along a narrow horizon skirting the western flank of the anticline. Geologists and miners observed this trend and have suggested that uranium mines should exist along a similar horizon on the eastern side of the Lisbon Valley fault. In 1968, Wildcat drilling validated the hypothesis with the discovery of the district’s largest mine, the Lisbon Mine, which produced 20 million pounds of U3O8 at a grade of 0.3% U3O8 (6 pounds per ton). The decline of uranium prices in the late 20th century brought a halt to further mining and exploration in the district. Mesa’s 2007 drill results showed that the Company encountered significant U3O8 mineralization 8,000 feet east of the Lisbon Mine.

Highlights from drill hole L-15 are:

  • 3.5 feet of 0.28% U3O8 (5.6 pounds/ton)
  • 1.0 foot of 0.16% U3O8 (3.2 pounds/ton)
  • 1.5 feet of 0.13% U3O8 (2.6 pounds/ton)

Strong mineralization between these three higher-grade intercepts resulted in an overall mineralized interval of 17.5 feet grading 0.11% U3O8 (2.2 pounds/ton).

Moonshine Springs, Arizona, United States

In June of 2010, Mesa received a permit from the Arizona State Land Department for drilling in its wholly-owned Moonshine Springs project in Arizona. The Company has planned more than 9,800 feet of conventional and core drilling. The main target is to expand previously drilled mineralization and new geochemical targets.

An extensive two phase radon soil gas survey has been completed and results portray a pattern of radon enrichment consistent with an elevated subsurface uranium source. Radon surveys led to the discovery of the adjacent Moonshine uranium deposit (4.67 million pounds grading 0.153% U3O8) owned by Denison Mines. The sandstone horizon that hosts this deposit was encountered in Mesa drilling, the best intercepts being 7.5 feet grading 0.21% U3O8 and 4 feet grading 0.47% U3O8, as previously reported.

Moonshine Springs

Management

Foster Wilson – President, CEO, and Director
Mr. Wilson has over 25 years experience in exploration and development projects ranging from reconnaissance to development drilling, ore reserve estimation and feasibility studies. Mr. Wilson has worked for Placer Dome, Echo Bay, Tenneco and various junior exploration companies.

Brian Kirwin – Non-Executive Chairman and Director
Mr. Kirwin is President and CEO of American Bonanza Gold Corp., and is an accomplished mining executive and geologist at both senior and junior mining companies having leadership positions in various capacities from CEO to VP Exploration. With over 25 years of experience evaluating deposits, mines and risk worldwide. Mr. Kirwin, a geologist has three gold discoveries in Nevada to his credit.

Greg French – Director
Geologist with experience in various capacities for Homestake Mining Co., Atlas Precious Metals, and Cornerstone Industrial Minerals, with a gold discovery to his credit and extensive project development experience including two projects taken through feasibility and production

Joe Giuffre – Director
Mr. Giuffre has over eighteen years of combined experience in business and legal matters, and has a transaction-based practice in the areas of corporate finance, securities, mining, corporate structuring, project finance, mergers and acquisitions. Mr. Giuffre has extensive experience acting for Canadian public companies with an international focus.

Joe Chan – Chief Financial Officer
Professional accountant with over 25 years of accounting, administration and system experience in the mining industry. From 1992 to 2002, Mr. Chan held various positions with Teck Cominco Limited including 6 years as Controller for its subsidiary Quintette Operating Corporation and four years in a senior financial role for its U.S. $2.5 billion Antamina copper project in Peru. Mr. Chan has served in senior financial roles for various public companies since 2003.

Larry Kornze - Director
Mr. Kornze is a geological engineer, credited as a co-discoverer of Barrick Gold Corporation’s 40 million ounce gold deposit at the Betze Mine, on the Carlin Trend in Nevada. He was part of Barrick’s team responsible for the discovery of the Miekle, Deepstar, Screamer and Rodeo deposits in Nevada. Mr. Kornze has also held positions with Newmont Mines Limited and Getty Mining Company.