Potash Dragon's seasonal geochemical sampling together with the information available from neighbouring operations has confirmed the cyclical nature of the near surface water table. The fluctuation in water levels and TDS confirms the effect of variable flow into the system. The chemical composition of the brines also varies with the seasonal fluctuations in water level, evaporation rates, and ground temperature, which varies between 16 degrees C and 35 degrees C during summer months.
Aquifer Hydrology and Extractability (Specific Yield)
Various investigations by Potash Dragon have confirmed the horizontal and vertical differentiation in salinity of the Salar de Llamara aquifer ("SdLA"):
-- Lower salinity upper aquifer: Andean precipitation ultimately feeds significant aquifers that flow beneath the Salar de Llamara. A near surface upper unit of the aquifer is generally low in salinity. This upper part of the aquifer is considered by Potash Dragon to be the conduit for seasonal fluctuations in flow rates where, on average, about 30% of the water inflow physically exits the hydrological system. The majority of the waters of the upper aquifer leave the Pampa via evaporation, and those waters that discharge from the basin have limited interactions with the deeper lying saline Soledad Formation, which provides one of the sources for solution concentration where the brines of increasing density gravitate into deeper parts of the aquifer.-- High salinity lower aquifer: The lower aquifer water is considered to be derived in part from salt dissolution of the Soledad Formation and brine densification action in the upper aquifer. The porous nature of the El Loa Formation acts as a reservoir for the more dense brines. In parts, the lower aquifer is in contact with, and in equilibrium with, the precipitated salts in the Soledad and El Loa Formations. This gives rise to the higher concentrations of sodium (Na), chlorine (Cl), calcium (Ca), potassium (K), magnesium (Mg) and sulphate (SO4) in the lower aquifer brine.
The results of environmental impact studies, water extractability pump testing and bi annual monitoring of the SQM pump field (adjacent to the Properties) have been published in numerous publicly available technical reports and returns to the Chilean environmental regulators. The analysis of these test results indicates a minimum 12.5% effective porosity yield for the stratigraphic unit that Potash Dragon has defined from geophysical results as the Upper Conductor Unit ("UCU").
Geophysical and Geochemical Investigations
Geodatos SAIC of Santiago have conducted many geophysical surveys to define brine aquifers contained within salars in Chile and Argentina, and they undertook the close spaced TEM survey for Potash Dragon. Brines by their very nature are highly conductive and therefore receptive to three dimensional definitions by electromagnetic geophysical means. The conductivity is proportionally related to the content of the ions in solution. The higher the TDS content the lower the solution resistivity, and by experience developed by Geodatos, subterranean brine in the Pampa del Tamarugal region has a typical resistivity signature of between 0.5 omega-m to 2 omega-m. The only other rock types that have similar TEM signatures are graphite and highly conductive sulphide ore bodies that are not found in the Salar de Llamara evaporite basin. The TEM survey results have not been utilised as a basis to estimate the concentration of any elements or minerals contained within the waters of the Salar de Llamara aquifer. The TEM survey results have been used to define the size and shape of the brine conductor units.