Atacama Minerals Corp.

Atacama Minerals Corp.

July 14, 2008 10:02 ET

Atacama Acquires Major New Potash Project in Brazil

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 14, 2008) - Atacama Minerals Corp. ("Atacama" or the "Company") (TSX VENTURE:AAM) is pleased to announce that it has acquired a large land package in a major new potash region in northeastern Brazil. Application has been made for exploration permits in the state of Bahia covering 1,444 square kilometers (357,000 acres) of lands located 30 kilometres west of the port city of Salvador.

The "Salvador Potash Project" is located along the Atlantic coast within the highly prospective southern on-shore portion of the Reconcavo Basin.

Research of historical data concerning the history and development of oil, gas and halite salt deposits in the Reconcavo Basin has revealed the occurrence of potash beds of various meters in thickness directly overlying the halite salt bed located within the evaporitic section of the lower Alianca Formation of upper Jurassic age(i). Petrographic work(ii) has confirmed the existence of potash minerals sylvite and sylvinite interbedded in halite salt within a 9 meter section of drill core from hole MQ-3, drilled in 1972.

The potash was found in the "Intermediate Interval" of the evaporitic Matarandiba Member at a depth of 1,100 meters. The thickness of the Intermediate Interval varies between 32 and 37 meters. Underlying the Intermediate Layer is the halite salt bed which varies between 29 and 60 meters in thickness. The area of the original discovery of the halite salt bed on the Island of Matarandiba has been mined by Dow Chemical for the last thirty years using solution mining methods.

There are no historical resource estimates of grade or tonnage of potash within the project area, but Atacama has initiated an aggressive exploration program to define the economic potential of what is considered a major new potash exploration target in South America.

The exploration permits are expected to be granted to the Company within the coming weeks. Existing seismic data are being studied and new gravity surveys will be conducted with plans to initiate a scout drill program in the fourth quarter of this year.

Potash is basically potassium chloride, an essential plant nutrient, currently in high demand as an agricultural fertilizer. Recent world-wide demand has been accelerated by the need for fertilizers in countries such as China, India and Brazil. Prices have increased from $200/tonne CFR Brazil in 2006 to current levels of $1,000/tonne CRF Brazil.

The Reconcavo Basin is a large rift basin extending 600 kilometers in length by 100 kilometers in width. It is one of the important oil and gas producing areas of Brazil with several existing fields currently producing a total of approximately 50,000 barrels of oil per day. The evaporite section of interest within the Reconcavo Basin containing the potash and halite salt beds overlies crystalline PreCambrian basement which lends itself to interpretation of depth and configuration using seismic and gravity methods.

Ghignone and Assis state: "The halite salt beds of the Matarandiba Member were discovered in 1964-65 with the drilling of an exploration well (IDM-1, Matarandiba Island) by the Brazilian state-owned petroleum company, Petrobras. This well encountered the halite salt beds at a depth of 1,110 meters. In 1969, Mineracao e Quimica do Nordeste S/A (Mining and Chemical Company of the Northeast) was organized with the specific objective of investigating the salt section encountered earlier. Two exploratory wells were drilled on the small island of Matarandiba, MQ-2 and MQ-3, ncountering 32.5 meters and 44 meters thickness, respectively, of vertically continuous, high-grade halite salt". These holes formed the basis for subsequent commercial halite salt development using solution mining methods. Nine meters of potash consisting of sylvite and sylvinite interbedded with halite salt were subsequently described by Coutinho and Fernandes in drill hole MQ-3.

The halite salt bed is currently exploited by solution mining on the island of Matarandiba with the recovered saturated brine sent by a 51 kilometer pipeline across the Bay of Todos os Santos to a processing plant near the port city of Salvador. Chlorine and sodium hydroxide have been produced by a division of Dow Chemical for more than thirty years.

Ghignone and Assis also state, "The identification of the mineral species present in the evaporitic interval where thicknesses are in excess of one meter can be easily identified using the logging results of density and gamma radiation:"

Density in g/cm3 Gamma Rays in API units
Anhydrite 2.95 to 2.97 0 to 75
Salt (Halite) 2.03 to 2.05 60 to 75
Sylvite (Potash) 1.8-1.95 More than 150

Edward Posey, President of Atacama, stated, "The successful development of the Salvador Potash Project will form an important part of the Company's strategic growth plan for becoming a major supplier of fertilizers for the growing world market. Atacama is currently planning a $61 million specialty nitrate fertilizer plant at the Aguas Blancas operation in northern Chile, and potash forms a major component of the specialty potassium and sodium-potassium nitrate fertilizers we intend to produce. The excellent infrastructure surrounding the Salvador Potash Project, including proximity to the major port city of Salvador, along with a long local history of solution mining, will help insure the rapid acceleration of project development if economic deposits can be confirmed."

The acquisition is subject to receipt by the Company of requisite regulatory approval, including the approval of the TSX Venture Exchange.

Juki Laurikko, Euro Geologist, a qualified person in accordance with N.I. 43-101 has reviewed and approved the information contained in this news release.

(i) Ghignone & Assis, Principal Mineral Deposits of Brazil, CPRM/DMPM, Volume IV, Parte C, Brasilia, 1997.

(ii) Coutinho & Fernandes, XXVII Braziian Geologic Congress, Aracaju, 1973.

On Behalf of the Board

Edward F. Posey, President

This news release contains forward-looking statements concerning the Company's plans for its operations. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to political risks involving the Company's exploration and development of its properties, the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, the inability or failure to obtain adequate financing on a timely basis and other risks and uncertainties. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary.

Contact Information

  • Atacama Minerals Corp.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)