Resource World Magazine

A U G U S T / S E P T E M B E R 2 0 1 7 www.resourceworld.com 23 ment plans…such as potash…were in compliance with a new mining law. These sub-panels take into consideration the health and environmental concerns raised by the local communities. Therefore, Vatic is including the interests of the local stakeholders in the overall project planning. Dr. Wright stated, "The project will embrace social and environmental impact standards per the Equator Principles and is engaged in discussions with landowners and community leaders." Potash (potassium chloride or KCI) is a potassium salt and an essential plant nutrient; one of the three required fertilizers, (the other two are nitrogen and phosphate) for crops such as rice, wheat and palm oil. Over 90% of potash production is used in the manufacture of mineral fertilizers. "There is no natural substitute for potash," said Wright. The major producing countries are Canada, Russia, Belarus, Israel, China and Germany which combine for some 90% of world production with an annual world potash production of 60 mil- lion tonnes KCI and annual growth rate of 2.4%. Asia currently consumes 28 million tonnes KCI per year of which China produces 5 million tonnes, domestically. China and India combine for over 70% of total consumption in the region. Vatic's marketing plan targets Thailand, Malaysia, Indonesia and Vietnam consuming some 75% of the regional balance. These four have current demand of 5 million tonnes KCI per year at a 4-5% per year growth rate. Rice and palm oil cultivation account for some 70% of potash usage in the Southeast Asia region. In fact, Indonesia and Malaysia are the world's largest producers of palm oil while Thailand and Vietnam are leading producers of rice. "Proximity to these growing markets combined with conve- nient and flexible transportation options provide significant cost advantages of up to $60 per tonne over Canadian and European suppliers to the region," said Wright. He can only speculate about the project potash reserve and production capacity, but a "reason- able development target" may be a production level of one million tonnes KCI per annum for a minimum life of 20 years. Wright is very optimistic about the basic infrastructure for the project in Thailand. This includes electrical power (from the Thai regional authority and from a hydropower plant), roads, rail, and ports. "These will reduce capital costs normally associ- ated with major project developments," he said. The domestic and Malaysian market will be served by road, but most product will reach markets by river ports and the Laem Chabang seaport for export to regional markets. Moreover, the project is several kilometres from the railroad network connecting the main north eastern to Bangkok and beyond. This railroad is a single line, nar- row gauge rail which will be upgraded to a double-track standard gauge system by a China-Thailand project and will offer logistical and economic benefits. Southern Arc Minerals is experiencing similar mining law reforms in Japan and Indonesia. In 2012, Japan's mining laws changed to re-activate the mining industry. Since the 1970s, Japan conducted little active mineral exploration leaving a shortage of geologists, drillers and drilling contractors employing modern tech- niques in drilling operations. However, Japan has a long history of mining and hosts 5 million plus-once gold deposits. Southern Arc Minerals saw this renaissance of mining in Japan and acted. Southern Arc moved quickly to review historical data and identify key exploration targets. They were the first foreign exploration company to apply for prospecting rights. In 2015, Southern Arc applied for 80 prospecting rights covering 27,153 hectares over eight distinct projects in Japan through its wholly- owned Japanese subsidiary Southern Arc Minerals Japan KK. In September 2016, the company sold its Japanese focused subsid- iary to Sky Ridge Resources Ltd. Sky Ridge changed its name to Japan Gold Corp. and commenced trading on the TSX Venture Exchange under the symbol "JG". Southern Arc now holds a 42.57% interest in Japan Gold. Japan Gold expanded its project portfolio to 57, 337 hectares comprising of 173 prospecting rights applications accepted across 11 separate projects. To date, pros- pecting rights went to 32 applications. Southern Arc's leadership team has long recognized Japan's pros- pects for gold, silver and copper. Japan Gold's executive team and Board of Directors have decades of technical and business experi- ences and a proven record of growing companies. The team includes geologists and advisors with experience exploring and operating in Japan. "Japan Gold is focusing on areas with historical government drilling holes showing prospective results and historical mines and workings many of which stopped in ore during World War II and never re-opened," according to John Proust, Chairman and CEO and Dr. Mike Andrews, President and COO. The Vatic Ventures Saksrithai Potash Project is located in Thailand's northeast corner province of Nakhon Ratchasima. Map courtesy Vatic Ventures Corp.

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