Inspiration Increases Interest in Potash Dragon

TORONTO, ONTARIO--(Marketwired - April 8, 2013) - Further to its press release of June 25, 2012, Inspiration Mining Corporation ("Inspiration" or the "Company") (TSX:ISM)(FRANKFURT:OI8) is pleased to announce that it exercised an aggregate of 2,187,500 warrants at an exercise price of $0.80 per share, increasing its interest in Potash Dragon Inc. ("Potash Dragon") from 1,250,000 common shares to 3,437,500 common shares (or from 20% to 41% of the issued and outstanding securities of Potash Dragon). An aggregate of 1,562,500 warrants remain outstanding and the Corporation intends to exercise such warrants prior to their expiry date of May 15, 2013. Upon the exercise of the remaining warrants, the Corporation will own 50% of the issued and outstanding securities in the capital of Potash Dragon.

About Potash Dragon Inc.

Potash Dragon is a private company incorporated under the laws of Barbados. Through its wholly owned subsidiary, Potash Dragon SpA, a private company incorporated under the laws of Chile, Potash Dragon holds various potash properties and applications covering an area of 24,492 Hectares in Region I of Northern Chile some 160km south east of the town of Iquique and adjacent to the Pan American (Ruta 5) highway. All the properties are located within the Pampa del Tamarugal area on the Salar de Llamara, and some of the tenements are situated adjacent to a brine extraction well field operated by Sociedad Química y Minera de Chile S.A. ("SQM").

About Llamara and Solida Properties

The following information regarding Potash Dragon's Llamara Project in Northern Chile is derived from a report entitled "Exploration Potential and Mineral Resource Estimate for Potash Dragon Inc.'s Llamara Project, Salar de Llamara, Northern Chile. A document to conform to the Canadian National Instrument NI 43-101 for the disclosure of mineral deposit information Securities Act R.S.B.C. 1996 c. 418 B.C. Reg 86/2011" (the "Report").

The Report was prepared by Dr. C Mortimer OBE, B.Sc., Ph.D, FIMMM, C.Eng., FRGS and is dated February 18, 2013 with an effective date of January 31, 2013. A copy of the Report will be available through the Corporation's profile on the SEDAR website (www.sedar.com). The Report was prepared to declare a brine mineral resource estimate and exploration potential for Potash Dragon's Llamara and Solida Properties (collectively, the "Properties").

Property Holdings and Location

The Properties in Northern Chile are held by Potash Dragon's wholly owned subsidiary, Potash Dragon SpA (Chile). The Properties are located across generally flat sections of the Salar (salt flat) de Llamara depression in the Atacama Desert of Northern Chile. Potash Dragon has applied to convert the free areas held as concessions of exploration to concessions of exploitation which cover an area of 4,690 ha of the Salar de Llamara.

In December 2012 Potash Dragon submitted applications for exploration concessions covering a further 19,802 ha in the Llamara basin. The applications have been published and registered and the new properties under investigation cover an area of 10,954 ha of semi-contiguous Potash Dragon concessions in the central Llamara area and 13,538 ha which are adjacent and distal to the NE and SE of Potash Dragon's extant holdings.

History

There is no record of any previous owner (other than the Republic of Chile Government) having formally made use of or claimed any of the Properties for short or long term residential or commercial reasons. Mining concessions (either of exploration or exploitation) are granted in Chile by virtue of a judicial resolution given in accordance with a special procedure established in the Chilean Mining Code.

Geology and Hydrology of the Salar de Llamara

The Andean ranges in northernmost Chile can be divided into a number of generally north - south orientated fault bounded physiographic provinces. An offshore Perú-Chile oceanic trench is bordered on the east by the Cordillera de la Costa. Further east is the variously termed Central Depression; Longitudinal Valley, or Pampa del Tamarugal/Salar de Llamara ("Pampa") sloping up to the Precordillera and the volcanic Cordillera Occidental, which, with the Cordillera Oriental, contains the high plateau variously denominated as the Altiplano or Puna.

Precipitation that occurs at higher elevations of the Andes Mountains reports to Tertiary fluvial braided fans which ultimately feed significant aquifers that flow beneath the Central Depression. The alluvial fans are incised by ephemerally active canyons and the talus of the median and distal fans locally masks underlying lake sediment accumulations of numerous salars including the Salar de Llamara. The Cerro (peak) Soledad range is located within the Salar de Llamara. The Salar de Llamara is incised by the Río Loa river canyon forming the ultimate drainage outlet to the Pampa del Tamarugal aquifer.

The underlying lake sediments of the Salar de Llamara host a partly closed basin aquifer, which has a longitudinal axis of approximately 60 km in a NNW-SSE direction and 25 km in an E-W direction, bounded to the S and W by a sub outcrop of impermeable rocks. The present day submerged basin covers an area of approximately 1300 km², exclusive of the area taken up by the impermeable basement (Mesozoic, 65-248 Mya) and older inliers of cerros Salar, Mogote, Hilaricos and Soledad, which protrude through the lacustrine sediments and form prominent hills above the Salar de Llamara. The Properties are situated within the western and central portion of the Salar de Llamara respectively at an elevation between approximately 750-800 m.a.s.l. in an area that has an exceptionally long geological history of aridity in the Atacama Desert, particularly during the post Oligocene period when the region has been continuously the most arid region on Earth with high evaporation and evapo-transpiration rates.

During a period spanning many decades the search for potable, irrigation and industrial quality water within the Pampa del Tamarugal has led to numerous exploration efforts and scientific studies of the upper portion of its vast, mostly saline, subterranean aquifers, including those of the Salar de Llamara by governmental and private institutions.

During 1994, the Department of Scientific and Technological Research of the Catholic University of Chile ("DICTUC"), who were consultants to Sociedad Quimica y Minera de Chile S.A. ("SQM"), in addition to work conducted by government on the Salar de Llamara aquifer ("SdLA"), published their initial estimates of the hydrology of the upper aquifer as part of an Environmental Impact Assessment ("EIA"). DICTUC further refined their hydrological model of the upper aquifer based on evaporation test work, ongoing borehole water level monitoring, pumping tests and transient electromagnetic surveys ("TEM"). Based on these studies, they produced further estimates of the recharge, evaporation, transpiration and discharge rates for three main upper aquifer sub basins.

The DICTUC study of the geology and hydrology of the Salar de Llamara basin led to the definition of an upper saline aquifer located between approximately 745 and 645 m.a.s.l. and a deeper saline aquifer of varying thickness located between an elevation of approximately of 645 and 300 m.a.s.l. The upper aquifer has been intensely explored by drilling, sampling and confirmatory TEM surveys while the deeper aquifer geophysical surveys have been tested by deep drilling in a few locations only.

Potash Dragon has validated the published sampling results obtained by the many scientific institutions for the surface and near surface aquifer. Potash Dragon has also duplicated and confirmed the TEM geophysical results relevant to the Properties.

Genesis of the Evaporite Minerals

The Pampa has been a basin for the deposition of non-marine sediments derived from the uplifting Andes to the E for much of the Neogene. The Cordillera de la Costa has blocked westward coastwise drainage of the Pampa until the relatively recent breakthrough to the coast of the Río Loa canyon. Prior to the overspill and development of the Loa canyon the Pampa was characterized by a huge lagoon of ponded Andean drainage, Lago Soledad, lying above the sedimentary fill of the Pampa including the Salar de Llamara. Prominent terraces with salt deposits marking high former lake levels occur around Cerro Soledad. The Tertiary continental sedimentary rocks in the Pampa are fluvial, lacustrine and evaporitic and the gypsiferous succession includes diatomite and highly soluble, but crystalline residues such as halite, associated potassium salts and, superficially, nitrates. These minerals were deposited following evaporation, particularly of Lago Soledad, in the hyper arid climate. Interspersed in this succession are horizons of volcanic tuff from eruptions in the Andes to the E. The sequence is estimated to be up to 1,000 m thick and has been shown to be 930 m thick in the drill hole Hilaricos No. 1, which is located on Potash Dragon's southernmost property.

Validation

Continuous monitoring, geochemical sampling data, backed up by the public disclosure of independent assay certificates, for the upper aquifer, have been reported. Quarterly sampling of the aquifer since May 2010 reveals that the total dissolved solids ("TDS") contained within the aquifer at a point vary between 3800 mg/L and 4200 mg/L.

The flow of the aquifer has been modelled and published. Flow directions of the aquifer are to the west and south towards puquios (small ephemeral lakes) that represent doline features within the karst (solution) topography where the aquifer becomes exposed on surface due to the dissolving of soluble salts. A north west - south east puquio trend extends over a distance of 21 km from the north west sub outcrop of the upper aquifer to its south east exposure. The zone of puquios effectively delineate the outcrop of the uppermost halite unit of the Soledad Formation which has an average west - east lateral width of approximately 5 km across the strike length of 21 km.

Seasonal Variation

Potash Dragon has conducted seasonal validation sampling of the waters of the upper aquifer which show dramatic increases in the concentration of TDS within the puquios to between 100,000 to 230,000 mg/L through a combination of dissolution and evaporation. Sampling of a borehole located to the east of the intersection of the upper aquifer with the south east puquios shows a fourfold increase in TDS from between 3800 mg/L and 4200 mg/L to between 12,000 mg/L and 17,000 mg/L TDS.

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 16ºC and 35ºC 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 Ω-m to 2 Ω-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.

Two hundred and eighty eight TEM survey stations, covering an area of approximately 14,400 ha were set up over the 4690 ha of the Properties as these stood at July 2012. The resulting geophysical surveys defined the three dimensional extents of the upper and lower conductor units within the aquifer. Geodatos determined the conductive unit volume based on various resistivity cut-offs, and developed sections that provide the basis for the definition of various conductor volumes. Potash Dragon has used this TEM data to define an upper conductor unit ("UCU") and a lower conductor unit ("LCU") that occur within the upper and lower SdLA on the Properties.

Mineral Resource Estimate

Inferred Resource:

The Properties under investigation cover an area of 10,594 ha for the inferred resource estimate on Potash Dragon's concessions in the central Llamara area. A porosity of 12.5% has been calculated using pumping test data to determine the specific brine yield from the strata. Based on the analysis of actual brine sampling results, the minerals of economic interest that have been declared as inferred resources are solely associated with the brines of the UCU.

Brine volume estimate parameters	Units	Central Llamara Properties
Conductor unit		Upper
Classification		Inferred
Property area	ha	10,954
Average width	m	32.5
Rock mass volume	Mm3	3,559
Porosity (specific yield)	%	12.5%
Total brine volume	Mm3	445

Potash Dragon's resource evaluation modelling involved the analysis of mineral occurrences using various factors which included unit cell dimensions, maximum search ranges (including blanking distances), as well as maximum and minimum data point selections per unit cell. The resource model was computed with the assistance of ArcGis™, ArcMap™ V10.1 and Geosoft Target™ software using modelling parameters that included 250 × 250 m cell sizes, blanking distances of 5 × 250 m = 1250 m, and maximum search radii of 10 × 250 m = 2,500 m. The minimum number of data points used per cell was 5 and the maximum number of data points used was 20. The search radius directions were set with strike, dip and plunge directions set at zero degrees, and a spherical kriging model was set within the horizontal semi-variogram range of 5,000 m. Analysis was also carried out using exponential kriging models and a semi-variogram range of 10,000 m was determined, which is consistent with the data.

The modelling was conducted on each individual element (or ions). Tests were also run to determine the variances between a 6-Ion model versus a sum of individual elements (or ions) model and the discrepancies were found to be negligible.

The concentration versus volume relationship, determined by this modelling method, for the minerals of economic interest contained in the brine of the UCU only, is shown below. The potassium concentration was used as the benchmark to determine the cut-off value and resultant brine volume, since potassium is expected to be one of the primary revenue generators for the project.

Expected product		Na2SO4	MgCl2	K2SO4
Expected revenue	$/t sold	150	400	696
Determinate ion		SO4	Mg	K
Expected recovery		74%	72%	81%
Break-even concentration	mg/L	3,008	170	362
Break-even revenue	$/m3 Treated	0.49	0.19	0.91
Operating cost	$/m3 Treated	1.59

A multi-product analysis, which included various individual or combined saleable salt compounds that contain potassium, magnesium, and sulphates, in addition to chlorides and sodium, was used to determine an operating cost break-even concentration of 362 mg/L on a "potassium only" basis. The impact of mineral concentration cut-offs on estimated brine volumes contained in the UCU for the central Llamara properties are shown below.

K Cut Off		6-Ion	K	Mg	SO4	Ca	Cl	Na
mg/L	% of Brine	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L
1	100%	71,834	1,645	994	15,867	470	29,993	25,350
150	87%	81,408	1,879	1,135	17,770	478	34,066	28,589
362	69%	97,933	2,294	1,383	20,997	476	41,190	34,229
680	49%	127,195	3,055	1,828	26,634	463	53,910	44,316
1,000	35%	158,789	3,949	2,336	32,557	434	67,705	55,127
2,000	22%	204,267	5,445	3,213	41,174	407	86,205	70,246

The volume, sampling and brine yield data are deemed sufficient to confidently estimate and declare an inferred mineral resource to be contained within the freely available brines of the UCU on Potash Dragon's central Llamara properties.

The brine mineral content has been determined using analysis of actual brine sampling and resource modelling, the results of which have been integrated with the brine volume estimates of the UCU contained on the central Llamara properties.

The brine mineral content contained in the free brines of the UCU on the central Llamara properties has been determined as an inferred mineral resource. The inferred mineral brine estimate is 1.57Mt of K₂SO₄ (i.e. 308 Mm³ at 5,112 mg/L K₂SO₄) and summarised as follows:

	K	K20	KCl	K2SO4	Mg	MgO	SO4
	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L
Inferred Resource	2,294	2,763	4,374	5,112	1,383	2,294	20,997

	Brine	K	K20	KCl	K2SO4	Mg	MgO	SO4
	Mm3	Mt	Mt	Mt	Mt	Mt	Mt	Mt
Inferred Resource	308	0.71	0.85	1.35	1.57	0.43	0.71	6.47

Exploration Potential (UCU and LCU)

There is an additional 13,538 ha of properties with exploration potential on Potash Dragon's concessions which are distal and located to the north east and south east of the central Llamara and Solida claims. No inferred resources have been declared for the LCU or distal UCU brines. As such the minerals associated with brines estimated to be contained in the LCU and distal UCU do not constitute a mineral resource and are classified to have exploration potential only, as shown below.

Brine volume estimate parameters	Units	Central Llamara Properties	Distal Properties
Conductor unit		Lower	Upper	Lower
Classification		Exploration Potential
Property Area	ha	10,954	13,538
Average Width (thickness)	m	96.0	32.5	96.0
Rock Mass Volume	Mm3	10,511	4,398	12,991
Porosity (specific yield)	%	12.5%	12.5%	12.5%
Total Brine Volume	Mm3	1,314	550	1,624

The UCU contained on Potash Dragon's other properties, excluding the central Llamara properties, is deemed to have the same exploration potential as the UCU included in the inferred mineral resource estimate.

K Cut Off		6-Ion	K	Mg	SOΓéä	Ca	Cl	Na
mg/L	% of Brine	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L
362	69%	97,933	2,294	1,383	20,997	476	41,190	34,229

K Cut Off	Brine	6-Ion	K	Mg	SO4	Ca	Cl	Na
mg/L	Mm3	Mt	Mt	Mt	Mt	Mt	Mt	Mt
362	381	37.3	0.9	0.5	8.0	0.2	15.7	13.0

The LCU is expected to have higher concentrations of elements and a higher density causing the brine to differentiate and stratify below the UCU. An analysis of the closely spaced TEM survey results for the UCU and LCU has shown that the LCU has a conductivity that is between 15% and 30% greater than that of the UCU. The increase in conductivity for brines held within similar strata is considered to be the result of an increased concentration of ions contained within the brine.

K Cut Off mg/L	Increase in Conductivity	% of Brine	6-Ion mg/L	K mg/L	Mg mg/L	SO4 mg/L	Ca mg/L	Cl mg/L	Na mg/L
362		69%	97,933	2,294	1,383	20,997	476	41,190	34,229
362	15%	69%	112,623	2,638	1,591	24,146	548	47,369	39,364
362	30%	69%	127,312	2,982	1,798	27,295	619	53,547	44,498

The possible ranges of brine mineral exploration potential in the LCU, shown below, has been determined using the brine volume estimates of the UCU in the central Llamara properties.

K Cut Off mg/L	Increase in Conductivity	Brine Mm3	6-Ion Mt	K Mt	Mg Mt	SO4 Mt	Ca Mt	Cl Mt	Na Mt
362	0%	2034	199.2	4.7	2.8	42.7	1.0	83.8	69.6
362	15%	2034	229.1	5.4	3.2	49.1	1.1	96.3	80.1
362	30%	2034	258.9	6.1	3.7	55.5	1.3	108.9	90.5

The range of mineral content shown in the following table is indicative of what could be expected as additional exploration potential to be defined by further exploration work. 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.

	K	K20	KCl	K2SO4	Mg	MgO	SO4
	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L	mg/L
Exploration potential Low	2,294	2,763	4,374	5,112	1,383	2,294	20,997
Exploration potential Medium	2,584	3,112	4,927	5,758	1,558	2,585	23,650
Exploration potential High	2,874	3,462	5,479	6,404	1,733	2,874	26,302

	Brine	K	K20	KCl	K2SO4	Mg	MgO	SO4
	Mm3	Mt	Mt	Mt	Mt	Mt	Mt	Mt
Exploration potential Low	2415	5.5	6.7	10.6	12.3	3.3	5.5	50.7
Exploration potential Medium	2415	6.2	7.5	11.9	13.9	3.8	6.2	57.1
Exploration potential High	2415	6.9	8.4	13.2	15.5	4.2	6.9	63.5

Conclusions and Recommendations

The results obtained have resulted in the declaration of an inferred brine mineral resource contained in the Upper Conductor Unit of 1.57Mt of K₂SO₄ (i.e. 308 Mm³ at 5,112 mg/L K₂SO₄). There are no known significant risks or uncertainties that could reasonably be expected to affect the reliability or confidence in the exploration information. The main uncertainties in future exploration programs are geological risk.

The results also identified exploration targets for further definition.

Recommendations:

The Report offers the following recommendations for the Properties:

• Further drilling and sampling is recommended to increase the quantity of data and improve on the level of confidence of the resource determination for the UCU inferred resource. Exploration drilling work is recommended for the prospective LCU targets.
  
  
• Specific test work needs to be carried out to determine the metallurgical/processing outcomes for all evaporation compounds produced.
  
  
• Simulations of the evaporation pond chemistry and the various products produced under local evaporation conditions are recommended.
  
  
• A detailed process flow design and estimation of the capital for the plant and various loading and storage facilities.
  
  
• Provisional and then detailed design and costing of the recharge and recovery well field be completed.
  
  
• Complete and detailed engineering and costing of the coastal recharge pumping system, power supply line and pipeline be undertaken.
  
  

The objective of the next phase of the project is to increase the level of confidence of the resource determination for the UCU inferred resource and to conduct exploration drilling on the prospective LCU targets. This is expected to take six months and cost $3 million as shown in the following table.

	CAD $
Technical Support and Consulting	750,000
Advisory Costs	250,000
Additional Properties	300,000
Mineral rights	250,000
Llamara exploration	1,450,000
Total	3,000,000

Qualified Person

Dr. C Mortimer OBE, B.Sc., Ph.D, FIMMM, C.Eng., FRGS, who is a Qualified Person as defined by NI 43-101, has reviewed and approved the scientific and technical content of this press release.

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Inspiration is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. Inspiration cannot assure investors that actual results will be consistent with these forward looking statements and Inspiration assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.