Monument Potash Project, Utah

TSX-V:SN Monument Potash Project, Utah Corporate Presentation | June 2015 1 1 FORWARD-LOOKING STATEMENTS Information included in this presentation ...
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TSX-V:SN

Monument Potash Project, Utah Corporate Presentation | June 2015 1 1

FORWARD-LOOKING STATEMENTS Information included in this presentation is forward-looking and is subject to uncertainties and risks. The results or events predicted in this presentation may differ materially from actual results or events. Such information is sometimes accompanied by words such as “project”, “potential”, “estimate”, or similar statements. None of the Company’s properties are presently producing and all estimates or statements regarding target size, incremental production and values have been created by the Company without independent verification. No assurance can be given that actual results, performance, achievements or values expressed in, or implied by, forwardlooking statements within this disclosure will occur, or if they do, that any benefits may be verified from them.

Most recent N.I. 43-101 report dated December 6, 2012 filed on www.sedar.com and available on the Company website www.sennenpotash.ca.

Ian Rozier, B.Sc. (Hons), M.Sc., P.Eng is the Qualified Person responsible for the review and approval of the technical and scientific data presented herein. Ian Rozier is a Director and Officer of Sennen Potash Corporation.

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MONUMENT POTASH PROJECT PROVEN HIGH GRADE POTASH 46.1% KCl (29.1% K2O) over 6.3m (20.6ft) in Cycle 18 Upper Bed

SIMPLIFIED EXTRACTION High temperature 68°C (154°F); likely less energy required and better solubility dynamics STRONG LOCAL MARKET Located adjacent to one of the world’s largest agricultural markets – the US midwest LOW CAPITAL REQUIREMENT Excellent jurisdiction and access to substantial existing infrastructure SCALABLE PRODUCTION Potentially very large scale project with rapid development potential

LOW OPEX Initial results indicate positive potential for low-cost solution mining and solar evaporation DOMESTIC FERTILISER Import substitutions as a domestic source of potash – premium pricing

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POTASH – HEALTHY PLANTS AND HIGHER YIELDS

INTRODUCTION POTASH DEMAND With population growth Potash will continue to be in demand RIGHT LOCATION Monument Project located in Utah, USA, existing potash market nearby SIMPLE GEOLOGY High assayed KCl grades, thick beds, high temperature and good continuity ENVIRONMENTALLY FRIENDLY Excellent technical fundamentals for solution mining multiple beds LOW COST Potentially low development and operating costs as well as rapid results WELL POSITIONED Available technical data compares very favourably to peers

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2014 RESULTS EXCEEDED ALL ESTIMATES JOHNSON 1 WELL DEPTH:

2,123 m

CYCLE 18 TOP

6,965 ft 2,124.1 m

2,138.7 m UPPER BED¹: 46.1% KCl (29.1% K2O) over 6.3 m (20.6 ft)

Insolubles: MgO: Temperature:

0.56% ~0.01% 68°C (154°F)

2,144.9 m

2,156.6 m

2,157.3 m 2,160.7 m

LOWER BED²: 44 – 52% KCl (28 - 33% K2O) over 3.4 m (11.2 ft)

2,195 m

6,968.8 ft

C O R E D

7,016.6 ft

7,037.2 ft

7,075.4 ft

7,077.6 ft 7,088.8 ft

7,200 ft

BASE OF DRILLED INTERVAL (CYCLE 18) Note 1: Based on core assay results performed by Saskatchewan Research Council Geoanalytical Laboratories Note 2: Based on Gamma Ray Equivalent Calculation by North Rim

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POTASH – HEALTHY PLANTS AND HIGHER YIELDS

POTASH PRICE OVERVIEW1 USES 1.

Increases crop yield and resistance to disease

2.

Strengthens plant cells

3.

Speeds absorption of Nitrogen and Phosphates

4.

Aids in water retention and photosynthesis

5.

Essential - no known substitute

Note 1: Sourced from World Bank January 2015

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MONUMENT PROJECT OVERVIEW •

Proven high grade, thickness and temperatures² *

Upper and Lower Potash Beds proved by drilling

Upper Bed: 46.1% KCl (29.1% K2O) over 6.3 m (20.6 ft)

Type

Leases

Net Mineral Acres

Lower Bed: 44 – 52% KCl (28 - 33% K2O) over 3.4 m (11.2 ft)

Private

100

10,645

*

Ambient temperature averaging 68°C (154°F)

State

21

15,645

*

Very low insolubles (0.56%) and MgO (0.01%)

Federal

38

80,553

*

Land position¹ of over 167 mi² (432 km²)

Total

159

106,8423



Sennen has earned into 70% ownership



Utah, USA is an attractive jurisdiction



MONUMENT LEASEHOLD OVERVIEW¹

*

Politically safe and in a mining friendly state

*

San Juan is a mining supportive county

UTAH

COLORADO

Supportive factors for development/operations *

Access, road/rail infrastructure in place

*

Electricity, oil & gas, water all available

*

Sparsely populated area with little flora/fauna

*

Smaller surface and environmental footprint

*

Encouraging environment for solution mining

*

Much lower capex for solution vs. underground mining

*

Pricing advantage over N. American peers of ~US$82 / ton³

Note 1: 100% basis, Sennen has a 70% interest Note 2: Confirmed from assay results and GREC from Johnson 1 Well core and well logs Note 3: Based on Intrepid Potash 2014 Q1 – Q3 net realized sales price versus North American Peers

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REGIONAL OVERVIEW UTAH

SOUTH EAST UTAH POTASH •



Located ~110 km (70 mi) SE of Cane Creek solution mine¹ *

Owned and operated by Intrepid Potash Inc.

*

Largest Potash solution producer in USA





Targeting 0.6 – 1Bt at 11.6 – 17.7 % eK2O

Moab Solution Mine Intrepid Potash

Hatch Point Potash Minerals

125 year mine life, 180Kt p.a.

0.9Mt at 12.2% eK2O (JORC)

Paradox Project North American Potash

Greatly reduced energy requirements

Cane Creek is one of the lowest cost potash mines in North America *

Employs solution mining, solar evaporation and flotation process to produce final product

*

100% sylvite (KCl) or ~63% K2O

*

Sylvinite = mixture of halite (NaCl) and sylvite

Monument Project Sennen Potash Corp • Upper Bed: 29.1% K2O over 6.3 m (20.6 ft) •Lower Bed: 28 - 33% K2O over 3.4 m (11.2 ft) •:

Q1 – Q3 2014 Intrepid received $82/tonne higher versus North American peers¹ *



Green River American Potash Corp

Low humidity and hot sun year round ideal for solar evaporation *

COLORADO

Driven largely by transport and proximity to consumers

Low transportation cost *

Next door to world’s largest agricultural markets

ARIZONA

NEW MEXICO

LEGEND Paradox Salt Formation Extent Approx. Potash Mineralisation Extent

40 km

80 km

Sennen Land Position Source 1: Based on publically available information Note: eK2O grade in graphic assumes 1 tonne KCl per 0.63 tonnes K20

Peer Projects

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SEISMIC OVERIEW • • • • •

20 lines acquired totaling 440km (275mi)

UTAH

2D lines shot between 1979 to 1986

COLORADO

A

Intersects existing historic well data Review, interpretation and analysis completed with RPS Canada and North Rim

A’

This work supports: *

Paradox calculated ispoach of ~860m (2,700 feet) thick

*

No evidence of salt dissolution in area of interest

*

No evidence of faulting in and around Johnson 1 Well

*

Johnson 1 Well < 40m (130ft) from 50-81 Thistle line

50-81 Thistle Line (A – A’) 11NR-4 Line

Johnson 1 Well

LEGEND 2D Seismic Lines Approx. Potash Mineralisation Extent Private Leases

2.5 km

5 km

Federal Leases State Leases

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LOW COST PRODUCTION

THICK FLAT POTASH BED • Supported by seismic

• Facilitates simple operational approach

• Mitigated costs related to directional drilling

• Affords higher margin or operating error

HIGHER POTASH CONTENT • Monument has grade of 28-33% K2O1

• Peer solution mining projects grade² between 1023% K2O

HIGH AMBIENT TEMPERATURE

SOLUTION MINING

• Monument Cycle

• Initial Monument

18 temperatures of 68°C

work shows no obvious hurdles

• Peer solution mining projects temperatures² between 25-55°C

• Preferential KCI solubility at higher temperatures decreases energy requirements

• Potential sources of water observed in drilling

• Allows for rapid development

• Lower Capex/Opex

SOLAR EVAPORATION • Same climate as existing Cane Creek solar evaporation ponds

• Greatly reduced energy requirements

• Sustainable and eco-friendly

• Less surface and environmental footprint

Note 1: Confirmed from assay results and GREC from Johnson 1 Well core and well logs Note 2: Peer figures as listed on slide 18

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FAVOURABLE PROVEN GEOLOGY POTASH CYCLE NO. 181 • • •

Johnson 1 Well drilled to depth of 2,195m (7,200ft)

• •

#18 K2O Bed 10.0m 9.1m 6.3m (U) 3.4m (L)

#18 K2O Bed 6.0m 3.0m (U) 4.6m (L)

Estimates prior to drilling were 25% to + 30% K2O

6.1m (U) 2.4m (L)

Cedar Point Area

Estimates prior to drilling were ~2,100m (6,900ft)

Dove Creek Area 7.6m (U) 3.7m (L)

NIL

Cycle 18 average depth of ~2,123m (6,965ft) Cycle 18 combined potash zones of 9.7m (31.8ft) *

• •

Six Shooter Area

Recovered grades of 28 – 33% K2O (44 – 52% KCl)

*



Utah Colorado

Geologically simple – little or no faulting predicted

*



MONUMENT POTASH PROJECT

32.6m (107ft) core extracted including all of Upper Bed

Johnson 1 Well confirmed figures in line with or better than pre-drilling estimates:



CYCLE 18 POTASH THICKNESS

Estimates prior to drilling were from 5-9m (16-30ft)

4.6m

Low insolubles of 0.56%, low MgO of 0.01%

4.6m

Ambient temperature of 68°C (154°F) *

Estimates prior to drilling of 67-70°C

*

Ideal for solution mining

4.6m NIL

Dec 2012 NI 43-101 report estimates exploration target potential between 20.7 – 47.1 Mt sylvinite/mi2 (average thickness ranging from 13 – 30ft)² Engineering and geological work underway to prepare updated NI 43-101

NIL

Thickness of K2O bed (m) (U) = upper (L) = lower

Oil and Gas well Johnson 1 Well - Sennen

Note 1: Confirmed from assay results and GREC from Johnson 1 Well core and well logs Note 2: The above potential quantities and grades are 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 target being delineated as a mineral resource

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JOHNSON 1 WELL - COMPLETED Western Natural #1 Charles Redd Well

PRIME LOCATION • Extensive Interpreted Seismic Data

50 - 81 Thistle 2D Seismic Line

Long Draw



Over 440km (275mi) of acquired and interpreted 2D seismic



Well located within 40m (130ft) of 50-81 Thistle

UT T34S R26E

2D seismic line UT T34S R25E

E. Lockerby Road



Johnson 1 Well

Seismic indicates continuous & flat Cycle No. 18 in and around the area of the Well

• Historic Well Data • 400 m

120 - 82 Thistle 2D Seismic Line

presence of 107m (350ft) Cycle No. 18

800 m



Geology & Engineering Seismic Permitting Archeological Pad Construction Wellsite Supervision

Western Natural #1 Charles Redd well indicated

Notable Cycle No. 18 gamma kick •

Also encountered in Johnson 1 Well



KCl grades confirmed via core assay

• Good road access •

Well located on intersection of E. Lockerby (339 E-W) and Long Draw (355 N-S)



Located ~4km (2.6mi) S of Highway 491

• Flat surface terrain •

Flat, low vegetation and sparsely populated

• Proximity to local towns

Drilling



~18km ( mi) W of Dove Creek, CO

Drilling Fluids



~21km (13mi) SE of Monticello, UT



Established regional potash services TSXV:SN

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JOHNSON 1 WELL

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STRATEGIC APPROACH Reduced exploration spending by staging initial exploration approach: • Rapid results from confirmatory drilling and coring • Johnson 1 well completed

• Results received – confirmed all results predicted prior to drilling • Anticipate relatively low cost to feasibility level study • Targeting up to 3 wells in total (including Johnson 1 Well)

• Expect low development Capex • Relative simplicity of solution mining and surface evaporation

• Condensed construction timeline • Potential to re-purpose exploration wells as production and/or extraction wells

• Scalable approach • Modular build-out – avoid excessive capex

• Preliminary work indicates potential to commence production at approximately 200Ktpa and increase up to ~1.0 Mtpa • Intrepid’s Cane Creek Solution Mine (Utah) operating at ~180,000 tons KCl per year¹ • Intrepid’s HB Solution Mine (New Mexico) expected to operate at ~150,000 - 200,000 tons KCl per year¹

Source 1: Intrepid Potash public information

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SOLAR SOLUTION MINING – SIMPLE AND INEXPENSIVE IN: Brine Solution

OVERVIEW •

Drill production and potentially extraction wells



Inject salt-saturated brine to dissolve potash



Allow brine to circulate and dissolve potash (Monument’s higher ambient heat may expedite this)



Extract saturated brine and pump onto lined solar evaporation ponds



Solar evaporation allows potash to recrystallize as water evaporates



Harvest precipitated potash and salt from evaporation ponds



Transport to flotation plant



Separate potash from salt and refine for sale



Monument may not need to heat the large volume of brine solution required to dissolve potash underground which may significantly decrease cash operating costs

SOLAR EVAPORATION POND

OUT: Potash Solution

SURFACE

Ambient Temperature Heats Brine

TOP OF POTASH BED

POTASH ZONE – CYCLE 18 Brine dissolves potash and forms a cavity

Note: Engineering and development regarding solution mining method is currently under investigation, the diagram above is purely for illustrative purposes

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POTASH – HEALTHY PLANTS AND HIGHER YIELDS

ADVANTAGES OF SOLUTION MINING REDUCED COSTS Capex and opex significantly lower than conventional mining LESS COMPLEX Less technical, engineering, mine design requirements vs underground mining STRAIGHTFORWARD No development shafts, underground mining equipment, or de-watering

FAST PROGRESS Time to production ~3-4 yrs vs 6-7 yrs for conventional mine SMALLER FOOTPRINT Significantly lower environmental impact SOLID ECONOMICS Generally higher IRR, lower OPEX, faster payback period FLEXIBILITY Production volume is easily scalable TSXV:SN

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CANE CREEK SOLUTION MINE • Monument is located ~110km (70mi) SE of Intrepid Potash’s Cane Creek Mine •

Solution mining and solar evaporation

• Cane Creek is in the bottom quartile of operating costs for potash producers

• Excess of 125 year mine life • Production of ~180,000 tons KCl per year • Low humidity and an arid climate results in

Cane Creek - Outline of evaporation ponds

rapid evaporation of solution brines •

Results in significant cost reduction in energy and processing costs

• Solid combination of geology, location and infrastructure

• Intrepid is also planning to build the new HB solution mine in New Mexico¹ •

Forecast production cash operating cost of US$90/ton at full production



Estimated to be 150,000 – 200,000 ton per year at capex of US$240 million

Cane Creek - Harvesting product Source 1: Intrepid Potash public information

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SOLUTION MINING COMPARABLES Company

Project

Name

Stage

Location

Ambient

KCl

Insolubles

Temperature

Grade

Grade

State/Prov

°C

%

%

Name

Sennen Potash

Monument

Exploration

UT, USA

68°

44 - 52%

0.01%

Western Potash

Milestone

FS

SK, Canada

58 - 65°

16 - 32%

6 - 11%

Mosaic Company

Belle Plaine

Producing

SK, Canada

n/a

29%

n/a

Intrepid Potash

Cane Creek

Producing

UT, USA

41°

41%

n/a

Intrepid Potash

HB

Development

NM, USA

n/a

34%

7%

Legacy

Producing

SK, Canada

43 - 55°

27%

7.25%

Muskowekwan

PFS

SK, Canada

33 - 38°

28%

6%

Hatch Point

PEA

UT, USA

49°

20%

n/a

Wynyard

FS

SK, Canada

25 - 55°

18 - 26%

2 - 4%

K + S Aktiengesellschaft Encanto Potash Potash Minerals Karnalyte Resources

GRADE, TEMP & INSOLUBLES ALL AMONGST BEST OF SOLUTION MINING PEERS Source: Company websites, publications and industry publications Note 1: Confirmed from assay results and GREC from Johnson 1 Well core and well logs Note 2: 1 tonne KCl per 0.63 tonnes K20

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OUR TEAM IAN ROZIER B.Sc. (Hons), M.Sc. P.Eng. President/CEO, Director Has over 30 years experience in the international mining industry. He has been involved in many capital raisings for mining ventures and is well known in the Canadian Mining Industry and European capital markets

BARBARA DUNFIELD B.Ed, MBA Chief Financial Officer Formerly an Investment Advisor, with over 20 years experience in the management, financing and development of public companies

ANDREW GOURLAY P.Geo. Project Manager Graduate of the University of British Columbia with extensive exploration and project management experience throughout Asia, North and South America and has successfully advanced projects from the grassroots to the resource estimation stage. As well as having a strong technical background, he also has extensive experience in corporate management, finance, and regulatory compliance in the junior mining sector.

DOUGLAS HYNDMAN LLB, Director Lawyer with the firm Kornfield LLP and sits as an independent director of several public companies and is very familiar with the financial and regulatory aspects of public companies in the resource sector

JAMES ROBERTSON B.Sc. P.Eng. Director Has twenty years experience in the international management of mineral exploration companies

MERFYN ROBERTS B.Sc., M.Sc. Director Over 30 years experience in international mining and mining finance. He holds a B.Sc. (Hon) in Geology, an M.Sc. (Oxford) and is also a Chartered Accountant in the U.K.

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HITTING ALL THE HIGH POINTS

MONUMENT HIGHLIGHTS LOCATION Excellent project location PROVEN Nearby Cane Creek Mine is precedent for solution mining in region SIMPLE GEOLOGY High assayed KCl grades, thick beds, high temperature and good continuity SIMPLE BUILD Straightforward development and technical fundamentals LOW COST Potentially low capex and opex as well as expedited timeframe WELL POSITIONED Geology compares very favourably to peers

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APPENDIX A – CAPITALIZATION OVERVIEW SENNEN POTASH CORP. Ticker

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Close Price1

C$

$0.355

12 Month Range

C$

$0.20 - $1.35

Basic S/O

#

26,314,344

Warrants

#

12,913,000

Options2

#

1,635,000

Fully Diluted S/O Market Capitalization

40,862,344 C$mm

CONTACT US Suite 408, 837 West Hastings Street Vancouver, BC Canada V6C 3N6 T (604) 685 6851 E [email protected] www.sennenpotash.com

9.2

Note 1: As at 27 May 2015, sourced from TMX website Note 2: Stock Options of 1,635,000, strike of C$1.10 and C$0.50, expiring February 12, 2018 and March 18, 2019, respectively

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APPENDIX B – POTASH SOLUBILITY CURVE

SOLUBILITY CURVE – POTASH (KCI) vs. SALT (NaCl)



Increasing temperature increases KCI Solubility



At 26°C KCI becomes rapidly more soluble than NaCl



Monument: 68 C° Milestone: 58-65 C°

Increasing temperature may improve economics

Cane Creek (Moab): 41 C° Legacy: 43-55 C°



Water saturated in NaCl can still dissolve KCI



Selectively mine KCI by circulating NaCl saturated fluids



NaCl remains in situ and KCI is dissolved and pumped to surface

Note 1: Note 2: Note 3:

Solubility Curve sourced from Sennen N.I. 43-101 dated 6 December 2012 Peer temperature information from Company websites, disclosures and technical publications The above potential quantities and grades are 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 target being delineated as a mineral resource

Muskowekan: 33-38 C°

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APPENDIX B – POTASH MARKET OUTLOOK DEMAND • •

33% population growth by 2050 (80M people/year)1 Potash fertilizer consumption growth led by Asia & South America² *

Indian CAGR ‘03 – ‘13 = 2.8% –

• • •





Forecast CAGR of 10 – 13% ‘13 – ‘18

*

China CAGR ‘03 – ‘13 = 3.9%

*

Latin America CAGR ‘03 – ‘13= 3.1%

*

Diet shift towards fruits, vegetables and meats

Food security becoming a key global issue



• • •

2009 ~ 28 Mt up to 53 Mt in 2013²

*

H1 2014 already at ~32.5 Mt, expected FY 58 Mt²

*

No commercial substitute

*

Crop yields fall sharply in its absence

Industry susceptible to supply shocks Production growth not sufficient2 Most producers running at or near estimated operational capability

Depleted existing mines and reserves *

6 mines with >15 year reserve life –

World potash consumption growth continues *

Potash essential

*

Result is growth in global potash demand

*



5 conventional mines already depleted

Water inflows a challenge –

U.S. potash supply/demand deficit

Caused 5 mine closures since 1976

Grain inventories approaching all time lows³ *

25 year grain ‘stocks-to-use’ ratio=25%, today=~20%

Arable land per person forecast to steadily decline as population grows – need for more efficient farming

*

Growth in crop production needed

Crop prices trending steadily upward

*

*



SUPPLY

In 2012 over 85% of potash imported³

Source 1: United Nations Source 2: Fertecon, IFA, Industry Publications Source 3: USDA





Record 2013 crop production yet supply still tight

Higher crop prices reflect tight supply

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APPENDIX C - PARADOX FORMATION STRATIGRAPHY System Quaternary

Unit Alluvium

5,890

250

6,140

15

Salt Wash

200 - 400

Salt 7

6,155

50

Tidwell

0 - 60

Clastic 7

6,205

5

Summerville

5 - 70

Salt 8

6,210

20

Curtis

80 - 110

Clastic 8

6,230

50

Entrada

60 - 310

Salt 9

6,280

130

Triassic Moenkopi

20 - 80

Clastic 9

6,410

23

Navajo Sandstone

80 - 500

Salt 10

6,433

57

Kayenta

60 - 360

Clastic 10

6,490

35

Wingate Sandstone

220 - 420

Salt 11

6,525

30

Church Rock

240 - 310

Clastic 11

6,555

13

Owl Rock

70 - 120

Salt 13

6,568

89

Petrified Forest

50 - 100

Clastic 13

6,647

18

Moss Back

0 - 100

Salt 14

6,665

60

Moody Canyon

40 - 120

Clastic 14

6,725

40

Torrey

100 - 200

Salt 16

6,765

163

Sinbad Limestone

0 - 20

Clastic 16

6,928

8

Black Dragon

0 - 230

Salt 17

6,935

23

Clastic 17

6,958

5

Salt 18

6,963

327

Clastic 18

7,290

10

Salt 19

7,300

170

Clastic 19

7,470

35

Salt 21 Cane Creek Clastic Salt 22

7,506

84

7,590

85

7,675

80

Clastic 22

7,755

15

Salt 23

7,770

14

Hoskinnini Sandstone

Devonian

0 - 100

Clastic 6

Chinle

Mississippian

Thickness (ft)

Salt 6

Glen Canyon Group

Pennsylvanian

Depth (ft)

250 - 500

Carmel

Permian

Unit

Brushy Basin Morrison

Jurassic

Thickness (ft)

Cutler Group

Hermosa Group

0 - 50 White Rim

0 - 250

Organ Rock

200 - 400

Cedar Mesa Sandstone

200 - 1,200

Elephant Canyon / Halgaito

0 - 1,500

Honaker Trail

0 - 3,000

Paradox Formation

500 - 9,000

Pinkerton Trail

200 - 300

Molas

0 - 100

Leadville Limestone

400 - 600

Ouray Limestone

100

Elbert

300

Note 1: Detailed Stratigraphic Column of Monument Project Area and Paradox Formation – Mossoth (2011)

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