Channel Resources Ltd. ("Channel" or the "Company") (TSX VENTURE:CHU) is pleased
to announce a maiden resource estimate for its Fox Creek mineral brine project
(the "Fox Creek Project"), located near the town of Fox Creek in Alberta,
Canada.
Channel is assessing the Fox Creek Project for its potential to produce a
package of industrial mineral products including salt, potash, calcium,
magnesium, boron, bromine, and lithium carbonate from deep saline formation
water that is currently being produced as a waste by-product of natural gas
production. The Fox Creek Project encompasses an area of 369 square kilometres,
situated over aquifers associated with producing oil and gas pools hosted in the
Devonian-age Beaverhill Lake and Woodbend/Leduc formations at a depth of
approximately 3,200 metres below surface (together, the "BHL Aquifer System").
These aquifers are believed to contain some of the highest concentrations of
lithium in Alberta formation waters, with the most favorable porosity and
permeability characteristics in the region. Channel has a right to acquire 100%
interest, subject to a purchasable 2% NSR royalty, in the metallic and
industrial minerals claims comprising the Fox Creek Project.
The Company engaged APEX Geoscience Ltd. to conduct the resource estimate in
accordance with National Instrument 43-101 standards for the BHL Aquifer System
on the Fox Creek Permits (the "Resource Estimate"). This Resource Estimate is
based on: 1) a compilation of publicly available stratigraphic and formation
water data from oil and gas well databases; 2) the results of Channel's
2009-2010 formation water sampling program; and, 3) a review of saline formation
water availability at the Fox Creek Project by Hydrogeological Consultants Ltd.
The Resource Estimate has required an evaluation of the total in-place
resources, achieved by multiplying the average grade of the elements of interest
by the total estimated volume of formation water present within the boundaries
of the Fox Creek Property, which was obtained by multiplying the total rock
volume of the BHL Aquifer System with the estimated porosity and percentage of
formation water based on historical well data (1961 to 2010).
This Resource Estimate reports an Inferred total In-Place volume of brine of 4.1
billion cubic metres from which contained industrial minerals are calculated
(Table 1).
A baseline estimate of the Inferred Recoverable volume of brine of 47.7 million
cubic metres (Table 2), represents the maximum calculated deliverability to
lower the aquifer fluid level by 100% of the available drawdown within the Fox
Creek Project over 20 years. This recoverable yield of approximately 1.2% of the
Inferred total in-place volume is estimated using transmissivity (permeability x
aquifer thickness) and storativity (the volume of water expelled per unit
surface area as a result of a change in head pressure) estimates of 0.5 square
metres per day and 1.3 x 10 to the power of negative 5 respectively, based on
calculated water levels and pressure survey levels reported in 1994 and 1997.
However, data is available from drill-stem tests and core analyses that indicate
a potential range of regional transmissivity in the BHL Aquifer System of
between 0.18 m2/day to 18.2 m2/day. Utilizing these values in calculating the
volumes of formation water that could be pumped over a 20-year period would
result in a range from 23.8 million m3 (0.6% of the resource in place,
represented in Table 3) to 671.5 million m3 (16.5% of the resource in place,
represented in Table 4).
Recoverable yield values will be subject to change when further data from the
Fox Creek project is collected, and can be influenced by a number of factors
including the redefinition of transmissivity and storativity through advanced
aquifer pressure tests, recovery methodology, regulatory extraction policies and
the reinjection of treated formation water back in to the reservoir, which would
limit the expansion of a hydraulic depression caused by pumping such that a much
greater recovered yield could be achieved.
Table 1 provides the total in-place inferred(ii) Resource Estimate for selected
elements within the BHL Aquifer System at the Fox Creek Project based on the
total in-place volume of 4.1 billion cubic metres of brine(iii).
----------------------------------------------------------------------------
Sodium Potassium Calcium Magnesium
(Na) (K) (Ca) (Mg)
----------------------------------------------------------------------------
Concentration (mg/L) 59,815 4,596 13,354 2,818
----------------------------------------------------------------------------
Total In-Place Resource
(Tonnes) 245,000,000 18,800,000 54,800,000 11,600,000
----------------------------------------------------------------------------
Salt Potash Calcium Magnesium
Equivalent End-Product (NaCl) (K2O) (CaO) (MgO)
----------------------------------------------------------------------------
Total In-Place Equivalent End-
Product (Tonnes)(i) 623,000,000 22,700,000 76,600,000 19,200,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Boron Bromine Lithium
(B) (Br) (Li)
----------------------------------------------------------------------------
Concentration (mg/L) 169 326 88
----------------------------------------------------------------------------
Total In-Place Resource
(Tonnes) 694,000 1,330,000 362,000
----------------------------------------------------------------------------
Lithium
Boron Bromine Carbonate
Equivalent End-Product (B2O3) (Br2) (Li2CO3)
----------------------------------------------------------------------------
Total In-Place Equivalent End-
Product (Tonnes)(i) 2,230,000 1,330,000 1,930,000
----------------------------------------------------------------------------
Table 2 provides details of the total recoverable inferred(ii) Resource Estimate
using an applied 20 year yield of 1.2%, or 47.7 million cubic metres of
brine(iii):
----------------------------------------------------------------------------
Sodium Potassium Calcium Magnesium
(Na) (K) (Ca) (Mg)
----------------------------------------------------------------------------
Recoverable Resource
(Tonnes) 2,850,000 219,000 638,000 135,000
----------------------------------------------------------------------------
Salt Potash Calcium Magnesium
Recoverable End-Product (NaCl) (K2O) (CaO) (MgO)
----------------------------------------------------------------------------
Recoverable End-Product
Equivalent (Tonnes)(i) 7,250,000 263,000 892,000 224,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Boron Bromine Lithium
(B) (Br) (Li)
----------------------------------------------------------------------------
Recoverable Resource
(Tonnes) 8,070 15,500 4,210
----------------------------------------------------------------------------
Lithium
Boron Bromine Carbonate
Recoverable End-Product (B2O3) (Br2) (Li2CO3)
----------------------------------------------------------------------------
Recoverable End-Product
Equivalent (Tonnes)(i) 26,000 15,500 22,400
----------------------------------------------------------------------------
Table 3 illustrates the sensitivity of the Fox Creek resource to changes in the
applied yield quotient, using a an applied 20 year yield of 0.6%, or 23.8
million cubic metres of brine(iii).
----------------------------------------------------------------------------
Sodium Potassium Calcium Magnesium
(Na) (K) (Ca) (Mg)
----------------------------------------------------------------------------
Recoverable Resource
(Tonnes) 1,420,000 109,000 318,000 67,000
----------------------------------------------------------------------------
Salt Potash Calcium Magnesium
Recoverable End-Product (NaCl) (K2O) (CaO) (MgO)
----------------------------------------------------------------------------
Recoverable End-Product
Equivalent (Tonnes)(i) 3,610,000 131,000 445,000 112,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Boron Bromine Lithium
(B) (Br) (Li)
----------------------------------------------------------------------------
Recoverable Resource
(Tonnes) 4,030 7,700 2,100
----------------------------------------------------------------------------
Lithium
Boron Bromine Carbonate
Recoverable End-Product (B2O3) (Br2) (Li2CO3)
----------------------------------------------------------------------------
Recoverable End-Product
Equivalent (Tonnes)(i) 12,900 7,700 11,200
----------------------------------------------------------------------------
Table 4 illustrates the sensitivity of the Fox Creek resource to changes in the
applied yield quotient, using a an applied 20 year yield of 16.4%, or 671.5
million cubic metres of brine(iii).
----------------------------------------------------------------------------
Sodium Potassium Calcium Magnesium
(Na) (K) (Ca) (Mg)
----------------------------------------------------------------------------
Recoverable Resource
(Tonnes) 40,100,000 3,080,000 8,980,000 1,900,000
----------------------------------------------------------------------------
Salt Potash Calcium Magnesium
Recoverable End-Product (NaCl) (K2O) (CaO) (MgO)
----------------------------------------------------------------------------
Recoverable End-Product
Equivalent (Tonnes)(i) 102,000,000 3,710,000 12,560,000 3,150,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Boron Bromine Lithium
(B) (Br) (Li)
----------------------------------------------------------------------------
Recoverable Resource
(Tonnes) 114,000 218,000 59,300
----------------------------------------------------------------------------
Lithium
Boron Bromine Carbonate
Recoverable End-Product (B2O3) (Br2) (Li2CO3)
----------------------------------------------------------------------------
Recoverable End-Product
Equivalent (Tonnes)(i) 366,000 218,000 316,000
----------------------------------------------------------------------------
(i) Equivalent tonnages were calculated using the following standard
conversion rates as determined by the chemical composition of the
final product, and are independent of price and extraction
processes: Na x 2.542 = NaCl, K x 1.2046 = K2O, Ca x 1.3992 =
CaO, Mg x 1.6582 = MgO, B x 3.2202 = B2O3,Li x 5.323 = Li2CO3.
(ii) Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
(iii) Figures may not sum due to rounding. Significant figures do not
indicate added level of precision. Values represent 100% recovery of
the elements of interest from the formation water and do not reflect
process recoverability, which ongoing studies are currently
addressing.
Production and operating agreements and permits have yet to be put in place
governing a brine processing facility at Fox Creek however it is anticipated
that such an operation would be able to capitalize on the existing
infrastructure within the permit boundaries including access to existing wells,
pipelines, an operating gas plant, grid-connected electricity, and rail lines.
The project may also benefit from nearby fresh water sources, as well as the
tapping of the geothermal potential in the brine itself. Preliminary
metallurgical testwork has indicated that existing processing technologies can
be deployed on the brine to recover saleable industrial minerals (see interim
results reported in a news release of November 17, 2010). The Company is
currently finalizing a process-flowsheet that would maximize overall economic
recovery of each of the mineral products.
The independent brine resource estimated by APEX Geoscience is consistent with
the standards set out in Canadian Securities Administrators' National Instrument
43-101 and the Company is treating the inferred brine resource estimate as a
National Instrument 43-101 resource estimate. The Company anticipates that a
report consistent with the format of a National Instrument 43-101 Technical
Report, which will incorporate the brine resource estimate will be filed on the
SEDAR within 45 days. Mineral resources which are not mineral reserves do not
have demonstrated economic viability. The estimate of mineral resources may be
materially affected by geology, environment, permitting, legal, title, taxation,
socio-political, marketing or other relevant issues.
The resource model and brine resource estimate was completed and/or supervised
by Mr. Michael B. Dufresne, M.Sc., P.Geol., President of APEX Geoscience Ltd. of
Edmonton, Alberta, who is an 'Independent Qualified Person' as defined in the
instrument and who has reviewed and approved of the contents of this news
release.
Channel Resources Ltd. is a Canadian TSX.V listed mineral exploration Company
which has a 90% interest in the Tanlouka Gold Project in Burkina Faso, West
Africa and an option to earn 100% in the Fox Creek Lithium / Potash Brine
Project in Alberta. At Tanlouka, Channel has recently discovered multiple
mineralized zones that are now being explored and expanded through a 15,000
metre core drilling program, with a maiden resource estimate for the Mankarga 5
deposit expected in the spring of 2012. At Fox Creek, a bulk sample of brine
sourced from producing natural gas wells is undergoing process testing to
determine the most efficient method of producing various industrial minerals
from the brine, including lithium carbonate, potash, bromine and borates. The
Company is financed to advance both projects through their current programs, and
is actively searching for additional opportunities to expand its project
portfolio.
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