My KCL Calculations
Couple more items of note
Please correct if I am incorrect in comments, DD, and calculations—the numbers for potash1's resource and potential share price using the 43-101 are staggering—and KCL is a huge buy.
Tackler:
"Potash One inferred of 360M tonnes 19% KCl = 68.4M tonnes"
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Tonnes of KCL and K2O in your calculations are off compared to the 43-101
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From pages 62 and 63 of potash one's 43-101 on there property it states that the "total -K2O tonnage for the indicated resource is 211.38 million tonnes @ 16.6% (185 million of the K2O tonnage is at a grade of 20.5%); and the K2O resource from that is 57~ million tonnes K2O—with a 43.45 million tonnes of K2O with Freehold Exclusion (?)—the official # used (note: 40million of the tonnes is from higher 20+% grade)
And
Potash1 43-101 states that the property contains a total "inferred K2O tonnage of 2.271 Billion tonnes @16.5% (of which 2.076 Billion tonnes is @ the 20.4% grade)--which equals a total K2O Inferred resource of 613.4million tonnes of K2O—and 425.55 million tonnes (official #, with the freehold exclusion) of K2O (and 392 million tonnes of that is derived from the higher grade 20.4% tonnage) ---of which you stated from the calculation that potash1 had only an inferred 68.4M tonnes of KCL.---real number is 425 million K2O inferred.
Also note from 43-101 (page 35)--
"The term “potash” is a colloquial term that is a contraction of “muriate of potash” which is expressed by the chemical formula “K2O” or “potassium oxide.” The terms “muriate of potash” and the contraction “K2O” are commonly used in the Saskatchewan potash industry to refer to the sales product (i.e., potassium oxide resulting from the mining and milling of sylvite-bearing rock or “sylvinite”). “Sylvite” refers to the potassium mineral “sylvite” or potassium chloride (“KCl”). The product mined and sold is KCl. A ton of KCl contains an equivalent of 0.63 tons of K2O."
So from this definition: "A ton of KCl contains an equivalent of 0.63 tons of K2O."
potash1 would have 425.55 million tonnes of K2O / .63 = which would create 675.47million tonnes of salable KCL in the inferred category and
69~ million tonnes of salable KCL in the Indicated category. This is 10x the inferred KCL in your calculation.
(I will just use potash1’s higher grade to compare to API)
Athabasca potash from their website = inferred 73.4MT of K2O @ 25.64% = 18.35 Million tonnes K2O
Potash1 = inferred 2.076 Billion tonnes of K2O is @ 20.4% = 425.55 million tonnes = (675.47million tonnes of salable KCL)
That is (potash1) 2.076 Billion tonnes of K2O @ 20.4% / (API) 73.4MT @ 25.64% = 28~ times more K2O inferred resource for potash1 over Athabasca Potash using just potash1’s 20.4 %grade of the tonnage---Right Now.
Yet API trades @ a valuation of 2.5x more of a market cap over potash1 right now—if of equal valuation a rough comparison would be 4.06 (KCL share price close) x 2.5~ (premium for API over KCL right now) x 28~ (potash1’s 28x API inferred K2O resource) = share price right now for potash1would be $284.9 CAD per share
API = 309 million market cap right now
KCL = 125 Million market cap right now (not only the cheapest of all the AG juniors it has the best resource----(a $285 share price would give KCL an 8.8 billion market cap—crazy?)
?????
Sounds high—but not really, considering the NAV Potash1’s resource is in the hundreds of billions and API is getting a 70x valuation over KCL for there K2O resource right now from the above calculations—and Potash of Saskatchewan (POT) is a 45Billion dollar market cap right now (though they are the main producer--but still that would be 5.5~ times more then potash1’s 8.8Billion dollar market cap @ a 284pps)
Still want to sell KCL @ 4 or even 7pps?
KCL is the play
And thanks Tackler et al. for introducing and spurring my interest to dive deeper into the numbers for these quality AG juniors—Esp. Potash1, KCL should be a huge winner in 2008.
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