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BHP Billiton has confirmed the strength of its position in the Saskatchewan potash basin in Canada with the reporting of an in-situ Mineral Resource of 3,370 million tonnes @ 25.4% K2O at its wholly-owned Jansen Potash Project. Table 1 provides full details of this Mineral Resource estimate. BHP Billiton also has further extensive exploration and development options in this known Tier 1 potash basin.

The Jansen project, located 140km east of Saskatoon, is nearing the end of its pre-feasibility study and is anticipated to progress to feasibility in the second half of 2010. Based on the current schedule, the project is expected to produce saleable potash from 2015. Jansen is the most advanced of BHP Billiton’s multiple development options in potash, with nearby Boulder and Young projects both in the concept study phase. The Burr project, acquired with Athabasca Potash in early 2010, is currently under review in the context of BHP Billiton’s full potash development portfolio. Exploration in the Melville area, also acquired with Athabasca Potash, is due to begin in July 2010. In total, BHP Billiton has exploration rights to a total of over 14,000km2 of highly prospective ground in the Saskatchewan basin. 

Graham Kerr, President of BHP Billiton’s Diamonds and Specialty Products, said: “Potash is strategically important for BHP Billiton offering the group an avenue for significant growth and further diversification by commodity, customer and geography. Jansen is the most advanced project in our potash development portfolio and is backed up by our other greenfield projects at Boulder and Young, and the rest of our land position. We believe Saskatchewan could be the next long life, low cost expandable basin play for BHP Billiton. Today’s announcement indicates a considerable high grade resource which will provide BHP Billiton a significant entry into the potash industry.” 

The Jansen resource forms part of a regionally extensive and consistent evaporite deposit at a depth of 900m to 1,000m. Mineralisation occurs as a gently dipping layer averaging 3.9 m thick made up of crystals of halite (NaCl), sylvite (KCl) and insoluble material plus or minus carnallite (KCl.MgCl2.6H2O).

Jansen is being planned to reach an eventual full production capacity of approximately 8 million metric tonnes of saleable potash per year. The potash-bearing zone will be mined using the conventional long room and pillar method already used by BHP Billiton in several locations around the world. The company has selected the location of the surface facilities to support the mine and is preparing to commence ground freezing in late 2010. Ground freezing is necessary to safely and successfully sink the mining shafts because of the presence of local aquifers common to the region. BHP Billiton has allotted pre-commitment funding of US$240 million to support continued engineering study, regulatory permitting, and completion of the ground freezing process.

Table 1 - Jansen Potash Project in-situ Mineral Resource as at 10 May 2010 in 100% terms.

Resource Category
Millions of dry metric tonnes
K2O
Insols
MgO
%
%
%
Measured
-
-
-
-
Indicated
3,250
25.4
7.1
0.07
Inferred
120
26.7
7.1
0.10
TOTAL
3,370
25.4
7.1
0.07
 
  • Competent Persons – J.McElroy (MAusIMM) BHP Billiton, B.Nemeth (MAusIMM) BHP Billiton, A. D. Mackintosh (APEGS) A.D.M Consulting.
  • BHP Billiton has 100% equity.
  • %K2O – potassium oxide, Insols – insoluble content, MgO – magnesium oxide. %MgO is generally used as a measure of carnallite (KCl.MgCl2.6H2O) content where % carnallite equivalent = %MgO x 6.8918. However, in the above statement the main source of the stated MgO content is the dolomite fraction of the insoluble material.  Areas of known geological anomalies, carnallitite (which comprises carnallite, halite and minor associated insolubles) and privately owned mineral tenure have been removed from the estimate. It is expected that a further 5 to 10% of the Mineral Resource tonnage will be discounted due to, as yet, unidentified geological anomalies.
  • The Mineral Resource is stated for the Lower Patience Lake potash unit.  A stratigraphic cut-off based on the top “406” clay seam and base “402” clay seam has been applied. A cut-off grade of 15% K2O was applied to the Resource estimate, no further modifying or mining extraction factors have been applied to the Mineral Resource.

Competent Person’s Statement

The statement of Mineral Resource being presented is based on information compiled by the above named Competent Persons and relates to Mineral Resource estimates as at 10 May 2010. Competent Persons are full time employees of BHP Billiton (unless otherwise stated), have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as a Competent Person as defined in the JORC Code. All Competent Persons are members of either the Australian Institute of Mining & Metallurgy (AusIMM) or a Recognised Overseas Professional Organisation (ROPO). The Competent Persons consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

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