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Announces an Updated Potash Resource Estimate for the Burr Project

posted on May 29, 2009 09:03AM
May 29, 2009
Athabasca Potash Inc. Announces an Updated Potash Resource Estimate for the Burr Project Including 425 Million Tonnes of Measured & Indicated Mineral Resources
SASKATOON, SASKATCHEWAN--(Marketwire - May 29, 2009) - Athabasca Potash Inc. ("API" or the "Company") (TSX:API) is pleased to announce an updated National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") compliant potash resource estimate for the Burr Project prepared by Lions Gate Geological Consulting Inc. ("LGGC"). The targeted mining members, including both the Upper Patience Lake ("UPL") and Lower Patience Lake ("LPL") Sub-Members, contain Measured Mineral Resources of 125,800,000 tonnes at a grade of 21.27% potassium oxide ("K2O"), Indicated Mineral Resources of 299,000,000 tonnes at a grade of 23.07 % K2O, and Inferred Mineral Resources of 186,900,000 tonnes at a grade of 23.55% K2O. The updated resource estimate has an effective date of May 22, 2009.

The updated resource estimate is based on 17 potash test wells, including new assay results from three test wells - Burr08-13-19, Burr08-01-32 and Burr08-09-34 - that were not included in the mineral resource estimate announced on September 29, 2008. New assay results were also used for two test wells included in the 2008 resource estimate, Burr08-04-23 and Burr08-16-36. In the 2008 mineral resource estimate, equivalent or eK2O results were used for these test wells. The assay results received to date for the 2008 test well core samples have corroborated the eK2O results used in the 2008 mineral resource estimate. API was given permission by the Saskatchewan government to sample some previously unsampled core in the historical drill hole Burr-04-14. The assay results returned high grade potash mineralization that increased the thickness of the potash intersection in this test well and has been included in the updated resource estimate.

The confidence level and sufficient tonnage of the Measured and Indicated Mineral Resource of 424,800,000 tonnes in the Burr Project is sufficient to support API's Pre-feasibility Study (the "Pre-feasibility Study") being led by SNC-Lavalin Inc. The Pre-feasibility Study is expected to be completed in the third quarter of 2009. A new NI 43-101 compliant technical report will be prepared by SNC-Lavalin Inc. upon completion of the Pre-feasibility Study.
"This resource update confirms management's assumptions and validates the potential development of the Burr Project as a potential low operating cost conventional potash mine" states Dawn Zhou, President and Chief Executive Officer.

Polygonal Resource Tabulation for the Burr Project 2009 Mineral Resource 
Update

(Tonnages are Net of Deductions for Freehold Lands, Identified Collapse
Structures and a 35% Extraction Ratio, May 22, 2009)

----------------------------------------------------------------------------
                       Tonnes     K2O(1)     MgO   Carnallite   H2O Insol(1)
                           (t)       (%)      (%)          (%)           (%)
----------------------------------------------------------------------------

LPL Measured      125,800,000     21.27     0.07         0.51          5.67
LPL Indicated     191,000,000     24.28     0.08         0.54          5.94
LPL M&I           316,800,000     23.09     0.08         0.53          5.83
LPL Inferred      117,500,000     23.97     0.08         0.52          5.75 
----------------------------------------------------------------------------

UPL Indicated     108,000,000     20.93     0.08         0.53          6.55 
UPL Inferred       69,400,000     22.84     0.08         0.53          6.25 
----------------------------------------------------------------------------

Total Measured    125,800,000     21.27     0.07         0.51          5.67 
Total Indicated   299,000,000     23.07     0.07         0.45          5.48 
Total M&I         424,800,000     22.54     0.07         0.47          5.28 
Total Inferred    186,900,000     23.55     0.07         0.49          5.07 
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(1) The summary value at the bottom of this column is inclusive of the eK2O
    and eInsol values.
The resource estimate was built using a polygonal method in GEMS(R) software using the same criteria as was used in the 2008 resource estimate. The classification protocols were changed to include Measured Mineral Resources within the 3D Seismic study area. For the LPL potash horizons within the 3D seismic area, a 1.5 kilometre radius was applied for the Measured Mineral Resource polygons, a 2.0 kilometre radius for the Indicated Mineral Resource polygons and a 3.0 kilometre radius for the Inferred Mineral Resource polygons. For the LPL potash horizon outside of the 3D seismic survey a 1.5 kilometre radius was applied for the Indicated Mineral Resource polygons and a 3.0 kilometre radius for the Inferred Mineral Resource polygons. For the UPL potash horizon a 1.5 kilometre radius was applied for the Indicated Mineral Resource polygons and a 3.0 kilometre radius for the Inferred Mineral Resource polygons. The outer perimeter of the 1.5 kilometre and 2.0 kilometre radius polygons was used to define areas of mineralization classified as Measured or Indicated Mineral Resources. This eliminated gaps between polygons that were too small to warrant drilling a new hole where the confidence in the grade and physical continuity of the potash horizons was good. The polygons in the area between potash test wells Burr07-09-29, Burr08-01-34, Burr08-04-23 and Casey-01 were extended the longest distance, 2.22 kilometres.

The limits of all polygons used in the resource estimate were restricted to the boundary of the Burr Project. Freehold mineral rights not currently in the possession of API were deducted from the polygonal areas and a 35% mineable extraction rate was applied to account for materials lost due to mine pillars and allowance for salt replacement, small collapse areas and carnallite. Additional deductions were made for collapse anomalies identified from the 2007 3D seismic survey. A density factor of 2.08 was used to estimate tonnages for each of the polygons. The deposit is assumed to be mined using conventional underground methods and processed into saleable products using technology similar to that currently in use at nearby potash mines.

Due to uncertainty associated with Inferred Mineral Resources, additional exploration work on the property may or may not succeed in upgrading the Inferred Mineral Resource to an Indicated or Measured Mineral Resource. Because confidence in the Inferred Mineral Resource estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure, the Inferred Mineral Resource must be excluded from estimates forming the basis of feasibility or other economic studies. The UPL member was included in the resource estimate in the north-west corner of the resource area due to the presence of carnallite in the LPL in Burr07-13-21, Burr08-01-32 and Burr08-13-19 and very low grade found in the LPL in Burr07-13-23. The UPL intersections in the other potash test wells on the property are above minimum grade and thickness in most areas of the LPL mineral resource. API has concluded that the LPL is the target horizon in these areas for any future mine planning. The UPL is considered a viable alternative mining horizon if there are areas where the LPL is not mineable locally, which is a method of mining similar to that currently in use at nearby potash mines.

The potash wells have all encountered stable overlying rocks which are an important consideration for reasonable prospects of economic extraction. The geological setting and favourable mineralization shown at the Burr Project are consistent with characteristics of existing Saskatchewan potash mines.

The results from three test wells included in this resource estimate were based on eK2O values. Drill core from Burr08-04-23 and Burr08-16-36 is being used for geomechanical testing and will be submitted to the Saskatchewan Research Council Laboratory in Saskatchewan ("SRC") for analysis as soon as the study work is completed. The eK2O value was used for Burr07-13-23 for the UPL intersection in place of the assay results after LGGC reviewed the drill core and the log data and determined that the log data in this case is more reliable due to the local anomalous feature intersected in Burr07-13-23. The log data samples a larger area than the assayed samples. The assay results for the UPL in the test well Burr07-13-23 returned 8.99% K2O over 2.85 m, whereas the log data returned 11.7% eK2O over 3.60 m and is considered more reliable.

Assay Results for Burr-04-14 and the 2008 Potash Test Well Intersections 
Included in the Burr Project 2009 Mineral Resource Update

----------------------------------------------------------------------------
               From     To Width   eK2O   K2O    MgO  Carnallite      Water 
                                        Total                     Insoluble 
                  m      m     m   wt %  wt %   wt %        wt %       wt %
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Upper Patience Lake Sub-Member
Burr08-13-19 939.39 946.01  6.62        22.05   0.08        0.56       6.51 
Burr
 08-01-32    927.92 934.25  6.33        25.20   0.06        0.43       5.47

Lower Patience Lake Sub-Member
Burr-04-14   957.41 964.08  6.67        19.70   0.05        0.32       3.17
Burr08-01-34 931.56 936.24  4.68        28.01   0.08        0.54       5.01
Burr08-04-23 940.30 945.30  5.00   24.3 Assay Results Pending           7.6
Burr08-16-32 945.97 950.15  4.18        24.63   0.11        0.74       6.39
Burr08-16-36 939.40 943.60  4.20   22.8 Assay Results Pending           6.3
Burr08-09-34 940.95 945.11  4.16        23.61   0.08        0.55       4.46

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Susan Lomas, P.Geo. of LGGC, is the Qualified Person (as defined by NI 43-101) for having prepared the mineral resource estimates, and scientific and technical information in this press release and has reviewed the results reported herein. Details regarding the 2008 mineral resource estimate and the three 2008 test wells not included in the 2008 resource estimate are documented in the technical report entitled NI 43-101 Technical Report for a Resource Estimation on the Burr Project, Athabasca Potash Inc., Saskatchewan, Canada, with an effective date of September 18, 2008 (the "Technical Report"). New assay results included in this updated resource estimate were assayed at SRC and verified by Ms. Lomas. The sampling and analytical procedures, QAQC program and sampling for new assay results are the same as those used for the 2007 assay results as described in the Technical Report. The Technical Report as well as a number of press releases related to the Burr Project exploration program, the Environmental Impact Studies currently being undertaken at the Burr Project and the Pre-feasibility Study are available at www.sedar.com or www.athabascapotash.ca.

About Athabasca Potash Inc.

API is a Canadian based corporation and was founded with a goal of establishing itself as a pre-eminent Canadian public company engaged solely in potash exploration and development with focus on the Company's wholly owned Burr Project in Saskatchewan, and to provide its shareholders with a unique investment opportunity focused entirely on potash.
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