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The Bada Potash Project

E r i t re a
Bountiful resource reserves and a favourable
geographic location: the Danakil region will be key
to servicing the worlds agricultural markets
Project Summary 03
Essel Group Middle East (EGME), through its group com- As the global population rises, the demand for food and the
pany Interu Mining and Trading DMCC, acquired the pressure on the agricultural sector will only increase. The
exploration license for the Bada potash mine in May 2015. Danakil region of Eritrea offers a combination of bountiful
The license area, 626km2, is located in the northern most resource reserves and favourable geographic location, and it
part of the Danakil region of Eritrea, East Africa. is set to play a key role in servicing the worlds key agricultur-
al markets in the future.
The Danakil Depression is world renowned for possessing
The license area is approximately 330km by road from the
significant accumulations of potash salts. Several potash
capital city Asmara and 230km from the port of Massawa.
projects to the south of Bada and across the border in Ethio-
EGME estimates that Bada possesses approximate reserves of
pia have significant proven potash reserves. Based on the
more than one billion metric tons and expects production to
physiographic features and location of the Bada basin, it is
commence in 2017/18.
clear that the area possesses an attractive depositional
environment for potash accumulation.

Bada License Area

Red Sea
The proximity to established infrastructure links
provides the means to service the strong demand
for potash in India and China. Massawa
Red Sea
There are plans to develop a second port facility
at Anfile Bay which is 75km from the Bada explora- Asmara
tion site.

23 m
33 0 Anfile Bay
Saudi Arabia


Red Sea
Proposed processing site




Geological Highlights 04
Preliminary testing shows that the Bada project area has similar The surrounding platform towards the north and north-
evaporite basin and depositional environment as that of the east of the basin is capped by young volcanic rock.
Dallol and Colluli areas, where huge potash resources have
been identified recently.
Thick stratified and consolidated siltstone to sandstone
Key Highlights of the Area are:
beds are out cropped at the western margin of the license
It comprises of evaporite sequence (gypsum, etc) and Late area. These sediments are unconformable and overlain by
Cenozoic volcanic rocks, dominated by basalt and tuffs. basalt flow.

The low-lying graben area is covered with thick, fine and In the north western part of the basin, one-centimetre
unconsolidated clastic sediments. Moreover extensive evap- thick anhydrite and chert lamina are present beneath the
orite are deposited between the coast and the Bada basin volcanic rocks. The chert lamina shows imprints of fossilifer-
(mainly anhydrite and minor gypsum lens-shaped deposits). ous helical grooves.

Geological Map of Bada Potash Project

Geological Map of Bada Potash Concession

Only 12 countries produce potash. Canada, Russia,
Belarus and Germany account for more than 75pc of
global supply. The Bada Poash deposit would be
one of the major sources of potash in a few years.
History 06
The Bada potash prospect was originally granted to NGEX
Resources [NGEX], the Canadian mineral exploration com- To feed more people
pany, in 2010. NGEX undertook detailed geological mapping
and rock chip sampling, as well as a number of geophysical
surveys, including a ground magnetic survey and four gravity from less land, we
profile lines.

NGEX drilled six holes at the Bada basin and, according to the need healthy soil
lithological data of the drill holes, all holes ended within the
overburden zone. In addition, the drilling revealed a 5m thick
basaltic extrusion buried along the eastern portion of the and more fertilizer
basin at shallow depth. The prospective evaporate stratum
has not yet been tested.

evaporite basin
Bada Proposed drillholes Geology sanu Dec 2010, Basin
Bada gravity station Profiles CJ May 2011
Proposed DDH JRS May 2011, 20
Sed - Sandy and marl
May 2011
Sed - Red bed
Bada Potash LTD

obsidian tuff
......... ddh prop jrs may11
gravity survey jrs rev 11 jan 19
Dallol evaporite basin outline
Gravity Profiles on Geology phonolite
09 March 2011 0 2.5 5

Gravity Profile Interpretaton Bada Potash (Source : NGEX Resources)

Potash is the common name for various
compounds containing potassium, which are used
mainly as fertilizers. But the crop nutrient has become
very high in demand, with pricing having out per-
formed other commodities.
What is Potash? 08
Fertilisers provide plants with the essential chemical elements Potash is a vital regulator in plant growth. It controls water
needed for growth, particularly nitrogen, phosphorus and content and the movement of other plant foods from roots to
potassium. leaves and the formation of grains, fruits and flowers.
Adequate supplies are essential to balance other plant foods
Potash refers to any of the various salts that contain potassium
and to create vigorous, healthy growth with natural resistance
(symbol K in the periodic table of elements) in water-soluble
to pests, diseases and adverse climatic condition.
form. Potassium salts such as carnallite, langbeinite, polyhalite,
and sylvite form in extensive deposits in ancient lakes and

Predicted overall increase in demand

Fundamentals of potash between 2014-2018


Crop demands Agricultural

increasing land shrinking 27%


Asia Europe Africa Rest of the world

The Process
Source: United Nations Food and Agriculture Organization.

Two common mining techniques are used - underground Once mined, potash must be converted to a form that can be

and solution-based mining - and the chosen technique absorbed by plants, most commonly potassium chloride

depends on the characteristics of the deposit. (KCL). The primary separating process that has been devel-

Conventional underground mining is typically used to mine oped is flotation - a multi stage process that includes ore

ore deposits located from 500m to 1,000m below the crushing, milling, drying and refining - after which the potash is
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surface. The ore is broken up using large machinery before floated in the resulting froth product and the salt discarded as
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being transferred on underground conveyor belts and hoist- tailings.

ed to the surface for processing.

Solution mining is better suited for deposits found deeper
EGME is currently conducting a tech-
than 1,000m. In this method, injection and recovery wells are
bored into the ground and a heated brine solutiton is then nical evaluation of the Bada potash
injected into the deposit. The solution dissolves the potash deposit. Preliminary findings indicate
salts and the dissolved salts are then pumped to the surface
that a conventional mining process
where the water is evaporated leaving behind salt and
will likely be used.
Illustrative Comparison of Mining Methods 09

Solution Mining Conventional Mining

Extraction Summary: Heated brine (salt and water solution) Extraction Summary: Miners travel down the shaft to the
is injected into the mine and salt from the walls. mining level to break up and retrieve the ore.
Deposit Features: Deeper deposits, irregularly shaped. Deposit Features: Shallow to deep.
Mine Depth: Up to ~ 3,000 metres. Mine Depth: Up to ~1,000 metres.
Typical Mining Method: Salt dissolution and brine pumping. Typical Mining Method: 1) Room & Pillar 2) Drill & Blast
(solution is brought to the surface to be processed)

Extraction Injection Ore skips

Brine Tank

Machines Conveyor

Relatively low capex Low operating costs

Relatively shorter time to production Well known and well understood
Low environmental impact - Most prevalent form of potash mining
Low demand for labour - Used in significant majority of potash production
Allows for more flexible operations Relatively high capital costs
Enables the mining of deep or irregularly shaped deposits
Few solution mines in operation
Geographic Advantage 10
The Bada license area is located in the Danakil region of Eritrea, a low lying area in the south-east of the country.

The site is only 40km from the Red Sea coast and The United Nations Food and Agriculture Organization
230km from the established export facility at the port of predicts that the global increase and demand for potash
Massawa.There are also plans in place to build a new between 2014 and 2018, 56% will be in Asia, 11% in Europe
coastal loading point at Anfile Bay, which is just 75km and 6% in Africa. Importantly, China will account for 23%,
from the mine. India 7% and Indonesia 7%.

The port of Massawa provides direct access to the key Badas proximity to the port of Massawa represents a
end demand markets in Europe, Africa, India, China and significant strategic and cost advantage over some of the
Southeast Asia. more established global potash producers in Russia and
North America whose assets are situated much further
away from the coast.

Access to global growth markets







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Next Phases of Development 11
In the next phase of the exploration campaign at the Bada The major fault running along the eastern side of the basin
prospect, the focus will be on undertaking a rigorous drilling and the transverse fault, which extends from the eastern
program of deep test holes. The primary purpose of the test fringe into the Ragali River to the west, are the existing
control structures for the proposed holes. Drilling is expect-
holes is to examine the occurrence of evaporate strata
ed to advance northward following careful assessment of
beneath the overburden layer. Based on the old geophysi-
initial results. For this campaign up to seven drill holes can
cal data and the current structural observation at the Bada cover the priority target area. Other parts of the target area
basin, the southern portion of the graben will be a priority will be assessed based on results obtained from the initial
target for the initial drilling. drilling.

Mining in Eritrea
Eritreas natural mineral resources include gold, copper,
potash, zinc, oil, natural gas, cement, gypsum, granite, marble,
ceramics, limestone and iron ore. The mining industry in
Eritrea is growing and the country expects to have four mines
in operation by 2018 producing gold, copper, zinc and

Notable projects include:

The Bisha mine in the north of the country, a joint venture

between Nevsun Resources, the Canadian mining company, A new gold mine, a joint venture between the Eritrean
and the state mining firm ENAMCO, is currently the only Government and Chinese firm, intends to start commercial
mine in full production. It has been in production since 2011, production in 2016.
producing gold and copper, and it will soon mine zinc.
Finally, the Colluli potash project, owned by Australian
company Danakali, is slated to begin production by 2018.
Management 12

Gagan Goel
Managing Director,
Essel Group ME

Mr. Goel is a Director of Essel Group and

the founder of EGME. He has more than
13 years experience of buildiing
and leading international businesses.

In October 2003, Mr. Goel founded Dish TV, one of Indias first direct-to-home television platforms which now boasts over 20
million subscribers. Four years later he was appointed Executive Director of Zee Entertainment Enterprise Ltd, the Mumbai-listed
media and entertainment company, where he was responsible for overseeing content production and marketing. Mr. Goel left
the company in 2009 to become Executive Director of E-City Bioscope, the Indian leisure and real estate business. In 2011, Mr.
Goel moved to Dubai to oversee Essel Groups global expansion and to manage the groups diversification into natural resourc-
es. He founded EGME in 2012.

Mr. Goel is also Chairman of Simba Energy Inc., the TSX-V listed oil and gas exploration junior focused on the onshore frontier
basins of Africa, and he sits on the companys Board of Directors.
Management 13

Punkaj Gupta
Group Chief Executive,
Essel Group ME

Mr. Gupta joined Essel Group in 2012

to oversee the companys expansion
into the natural resources industry
and the eventual establishment
of EGME in 2012.

He has over 20 years of corporate experience in the natural resources and industrial sectors. Mr. Gupta started his career working
for the United Nations Educational, Scientific and Cultural Organisation (UNESCO) in Geneva. In 2000, he joined Jindal Saw Pipes,
a leading global manufacturer and supplier of iron and steel pipe products, where he was responsible for business development
and for growing the company overseas. He left the company in 2006 and was appointed Executive Director Asia Pacific of Gap
Steel, the Dubai based steel company. Two years later he joined Meta Copper, Indias largest manufacturer of copper products,
as Executive Director and was responsible for starting various new business activities. Before joining EGME, Mr. Gupta managed
a number of independent mining projects in India.

Mr. Gupta is also the Chief Executive Officer of Simba Energy Inc.
Why EGME ? 14

The Bada basin has one of the shallowest potash deposits in the world between 75m and 125m beneath the suface, there
by reducing capital and production cost
Badas proximity to the coast provides strategic and cost advantage over the major potash producers of the world
EGME targets assets with near-term production potential and the company aims to become a low-cost leader in the
exploration, development and production of diversified natural resources
EGMEs technical team uses advanced technology and end-to-end logistical expertise to improve the efficiency and prof-
itability of its existing operations. This helps to maintain a low-cost advantage
The management team has an average of 28 years of experience across a wide spectrum of natural resources companies
EGME has a strong financial position and is backed by Essel Group, a global conglomerate with an annual turnover of
$20bn and a 40-year history spanning numerous industries including media, packaging, entertainment, infrastructure, educa-
tion and metals
EGME seeks to support local communities by creating opportunities for educational and economic advancement, foster-
ing a sustainable environment for future development.

Advanced Technology
Low-cost Leader

Highly Skilled
Logistical Efficiency
Management Team

Sustainable Environment Backed by

Large Conglomerate
Bada has estimated reserves of over 1 billion
metric tons of potash and is
one of the shallowest deposits in the world
Essel Group ME is wholly owned by Essel Group, the Indian
multinational conglomerate operating in a broad spectrum GROUP ME
of industries including media, packaging, infrastructure and
technology. Building on Essel Groups 90 year history of
developing and promoting businesses, EGME is leading
the expansion of the Groups presence in Europe, the
Middle East and Africa. EGME operates subsidiary business-
es in the natural resources, industrial supply and logistics,
and education sectors.

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