Potash

Paradox Basin Potash Project

The Paradox Basin Potash Project (“Project”) covers approximately 390km2 in the Paradox Basin in south eastern Utah, USA. Transit has completed commitments to earn an initial 75% interest in the Project which comprises potash mineralisation in two beds of interest, Potash 13 and Potash 18, ranging in depth from approximately 1,500 to 2,000 metres below the surface.

The Exploration Target range for Potash 13 is 0.9 to 1.3 billion tonnes of sylvinite (potassium chloride-rich potash ore) at an average grade of 16% to 24% KCl. The Exploration Target range for Potash 18 is 1.6 to 2.5 billion tonnes of sylvinite at an average grade of 21% to 30% KCl.

This amounts to an overall Exploration Target range for the two Potash beds of 2.5 to 3.8 billion tonnes of sylvinite at an average grade of 19% to 28% KCl (12% to 18% K2O).

Areas hosting thicker and higher grade potash beds have been recognised within the Exploration Target and future exploration will focus on these areas.

The Exploration Target assumes a grade-thickness cutoff of 20% K2O-m (grade by thickness), below which mineralisation is excluded from the estimate. The Exploration Target is conceptual in nature and there has been insufficient exploration to define a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, the JORC Code (2004). The Exploration Target is not being reported as part of any Mineral Resource or Ore Reserve.

JORC Code Attribution
The information set out above that relates to exploration results, mineral resources or ore reserves is based on information prepared by Dr Michael P. Hardy, who is Principal with Agapito Associates, Inc. Mr. Hardy is a Registered Member of The Society of Mining, Metallurgy, and Exploration (SME), a Recognised Overseas Professional Organisation and is employed by Agapito associates Inc who are a consultant to the Company. Mr Hardy has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.” Mr Hardy consents to the inclusion in this Report of the matters based on his information in the form and context in which it appears in the Exploration Target estimate report.

Scoping Study
ProMet Engineers performed a Scoping Study (“Study”) on the Company’s Paradox Basin Potash Project. The results were received and announced on 10 December 2009.
The Study confirmed the potentially robust financials of a conceptual 2 million tonnes per annum potash solution mine delivering independent potash supply to the international potash market leveraging off the Project’s close proximity to key infrastructure.

The Study’s financial model indicates that the Project has significant potential value on a net present value basis and potentially has an attractive internal rate of return.  Because the project does not currently contain a JORC code compliant mineral resource Transit is unable to release the full results of the financial modeling.

The Study assumes mining of Potash bed 18 only within an area where it averages 8.5 metres thick over two splits of the same bed at a grade of 34% KCl.  The Study mine plan only covers 12% of the overall project area. ProMet based their Study model on estimated capital and operating costs based on the above parameters and future potash prices as projected by British Sulphur Consultants (part of the CRU Group, United Kingdom).

The potash production assumption is not a production forecast by the Company but an assumption used in the Scoping Study. It is uncertain if further exploration will result in sufficient resources being outlined within the Project to meet the assumptions used in the Scoping Study

Subject to successful exploration and permit approvals, Transit believes the Study confirms that the Project has the potential to become a world-class potash mining operation.

The Study recommends Transit advance the Project to the pre-feasibility study stage, based on the favourable results of the Study summarised above.

The pre-feasibility study will consider some of the expected refinements to the Project identified in the scoping study including the sale of product to the domestic US market as well as the mining of Potash bed 13 as well as Potash bed 18 at the Project.

Permitting and new State Leases
Transit announced on 3 December 2009 that it had received written confirmation that the first stage of the permitting process for the 350km2 portion of the Paradox Basin Potash Project on Federal land has been successfully completed. This effectively secures exclusive rights to potash within the prospecting permit application areas, subject to Federal Government approval of exploration and environmental plans.

In late January Transit was advised by the State of Utah School and Institutional Trust Lands Administration (“SITLA”) that it was the successful bidder on 36 km2 of Potash Mineral Leases in the January 2010 competitive lease offering. Transit and its partner will now press ahead with the signing of the necessary Mineral Lease agreements with SITLA.

As a result of Transit successfully tendering for State Land, the Project now covers approximately 386km2 of land over which the potash rights are administered by both Federal (350km2) and State (36km2) agencies.

The acquisition of these State Mineral Leases consolidates the land position of the Project. (see map above)

Transit believes the acquisition of the State land is highly significant as it should allow the joint venture to expedite the exploration programme planned for 2010. The approval process for exploration on State Mineral Leases is less onerous and therefore it is expected that the joint venture will be in a position to drill earlier than previously expected. A permitting plan is currently being put together by the Company in conjunction with its American environmental and permitting consultants.