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Potash Slashes Profit Forecast After Sales Reach ‘Virtual Halt’
By Christopher Donville
April 23 (Bloomberg) -- Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, said 2009 profit will be less than it previously expected after North American sales of the crop nutrient reached “a virtual halt.”
Earnings this year will be $7 to $8 a share, Saskatoon, Saskatchewan-based Potash Corp. said today in a statement. That’s less than the $10 to $12 a share the company forecast in January and trails the $9.33 average estimate of 14 analysts surveyed by Bloomberg.
Chief Executive Officer Bill Doyle temporarily shut down some mines as demand declined, causing the company’s average potash price in North America to more than double to $639.91 a metric ton in the quarter. North American sales volumes of the form of potassium fell 86 percent from a year earlier, and shipments overseas plunged 78 percent.
“In North America, potash fertilizer sales ground to a virtual halt as farmers seemed to expect a price decline similar to those in nitrogen and phosphate fertilizers,” Potash said today in its first-quarter earnings statement.
First-quarter net income fell 46 percent to $308.3 million, or $1.02 a share, from $566 million, or $1.74, a year earlier, Potash said. Excluding a tax benefit, profit was 47 cents a share. The average estimate of 14 analysts surveyed by Bloomberg was for profit excluding items of 82 cents. Sales dropped 51 percent to $922.5 million.
Potash Corp. fell 2.35 euros, or 3.7 percent, to 60.50 euros as of 12:31 p.m. in Frankfurt.
Farmer Demand
Prices for corn, wheat and soybeans all plummeted from record highs last year, reducing growers’ incentive to boost yields.
“The potash companies are cutting production to prop up their prices, and we’re cutting our usage to bring them down,” David Kruse, president of CommStock Investment Inc. in Royal, Iowa, and a grower of corn and soybeans on 640 acres, said before the results were released. “It’s a battle.”
Second-quarter profit will be $1.10 to $1.50 a share, Potash Corp. said today. That trails the average analyst estimate of $2 a share.
The company, which produced about 8.7 million metric tons of potash last year, said in December it aims to reduce output by about 2 million tons because of a “short-term” decline in demand.
Bunge Ltd., the world’s largest oilseed processor, reported a $195 million net loss today, its second straight. The company’s fertilizer unit posted a $262 million loss after a $133 million profit a year earlier.
Global potash producers are negotiating with China on prices and volumes for 2009. The talks, led by Belarusian Potash Co., the world’s largest trader of the commodity, probably will be finished in the current quarter, Potash said today.
Potash, Mosaic Co. and Agrium Inc. negotiate through Canpotex Ltd., their joint international-marketing unit.
To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.
To add to the rumour mill ...
Lots of (China) chatter about KCL.T
No clue how valid.
Interesting project ...
Sprott Resource Corp. Announces Launch of One Earth Farms Corp.
Thursday, March 26, 2009 11:30:12 (GMT-04:00)
Provided by: Canada News Wire
TORONTO, March 26 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC") announced today that it has launched One Earth Farms Corp. ("One Earth Farms"), a large scale, fully-integrated corporate farming entity, which intends to have operations on world class First Nations' farmland in the Prairie Provinces. SRC will invest $27.5 million in One Earth Farms to establish operations, fund working capital and support its initial growth.
"We believe that the opportunities associated with this new venture are unprecedented in the agricultural industry," said Kevin Bambrough, President and CEO of SRC. "We intend to build a long-term profitable agricultural business in partnership with the First Nations, which will improve the management and environmental sustainability of First Nations' farmland as well as benefit their peoples through increased revenue and job opportunities. We have assembled an exceptional team at One Earth Farms, which we believe provides the industry experience and operational skill necessary to build One Earth Farms."
About One Earth Farms
Management has designed a program to begin farming operations in a hub and spoke system designed to plant crops and ranch lands in annual increments, beginning with an initial minimum target of 50,000 acres in the first year of operations. One Earth Farms' professional management team, its strong capitalization and its access to large tracts of world class First Nations' farmland, positions One Earth Farms to become the largest, most efficient, operating farm in Canada.
Management believes that the timing for this venture is opportune. Global trends continue to impact food supplies, as arable land continues to decline, fresh water remains in short supply and various regions of the world are experiencing severe, recurring droughts. In addition, the global credit crisis has impacted the financing available to farmers and will negatively impact crop production in the short term. These factors, combined with a global population that continues to rise, are creating food security issues and in turn fueling substantial farming investment demand globally.
One Earth Farms intends to initiate job training programs for First Nations persons, which will help train the next generation of farmers, provide One Earth Farms with a pool of qualified employees for the future and further strengthen the relationship between One Earth Farms and the First Nations.
Back to my full load of KCL with a 94 cent average
Nice Drill Results:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=34495575
Another deal for "da boyz" ...
Potash One Announces $10 Million Flow-Through Financing
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 23, 2008) - Potash One Inc. ("Potash One" or the "Company") (TSX:KCL) is pleased to announce a non-brokered private placement of flow-through shares to raise up to $10 million. Each flow-through share will be issued at $1.25 per share ("FT Share") for a total issuance of up to 8 million FT Shares (the "Placement").
The flow-through funds raised will be used for general exploration expenditures on the Company's Legacy Project, which will constitute Canadian exploration expenditures (as defined in the Income Tax Act) and will be renounced to the investors.
The Company is paying certain finder's a 5% finder's fee in cash and 5% in finder's warrants. Each finder's warrant will entitle the holder to purchase one non-flow-through common share at a price of $1.50 for a period of 12 months following the closing of the financing.
All securities issued in the Offering will have a hold period in Canada a minimum of four months from the closing of the financing.
The Placement is subject to certain conditions including, but not limited to the receipt of all necessary regulatory approvals.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F. Matysek, M.Sc., P.Geo., President and Chief Executive Officer
About Potash One Inc.
Potash One Inc. is a TSX listed Canadian resource company engaged in the exploration and development of advanced solution mine amenable potash properties. The Company owns 100% of a 97,240 acre Potash Subsurface Exploration Permit in Saskatchewan, Canada (the "Legacy Project"). The Legacy Project is adjacent to the largest producing solution potash mine in the world and has NI 43-101 Inferred Mineral Resources of 391.5 million tonnes of K2O and Indicated Mineral Resources of 40.8 million tonnes of K2O.
This press release does not constitute an offer to sell, or a solicitation of an offer to sell, any of the foregoing securities in the United States. None of the foregoing securities have been and, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
FOR FURTHER INFORMATION PLEASE CONTACT:
Potash One Inc.
Paul F. Matysek, M.Sc., P.Geo.
President and Chief Executive Officer
(604) 331-4431
(604) 408-4799 (FAX)
Email: info@potash1.com
Website: www.potash1.com
China and India waking up to fertilizer
Sep 23, 2008 11:18 AM,
By Elton Robinson
Farm Press Editorial Staff
Looks like more of the same next year for U.S. grain producers. Good prices and strong demand for grain will likely continue, but input costs are expected to trend higher too, particularly for fertilizer and fuel, says an industry analyst.
Globally, the news is worrisome, too, as several developing countries concerned about food security are paying out huge subsidies to help offset the high cost of fertilizer to their growers.
On the other hand, these developing countries are now driving global economic growth,” said Erin FitzPatrick, an industry analyst with Rabobank, speaking at a webinar. “Along with this economic growth have come rising incomes and higher demand for grain products, elevating the amount of food production needed.”
As this demand increases, “we’re seeing grain stocks diminish across the board. Ending stocks and the stocks-to-use ratios for wheat, corn and soybeans are at historic lows, which are dramatically raising prices for these crops.
“Other factors for higher prices include lower levels of capital investment over the past few years and a higher amount of speculative investment into the commodity markets.”
Unfortunately, as grain prices have risen so have key inputs for farmers. For example, diesel fuel prices have skyrocketed due to cost and supply of crude oil, tight refining capacity, high global demand driven by emerging markets, supply-demand imbalances, seasonality and increasing cost of shipping from refineries.
The fundamental driver of diesel prices — crude oil — has risen from $11 barrel 10 years ago, to $70 one year ago to around $110 today, FitzPatrick said. “Even if crude oil drops to $100, it’s still $30 over what it was only a year ago. It’s having an impact on the cost of fuel, which is trickling down to the cost of fertilizer, the cost of shipping fertilizer and the production of many other raw materials used in the commodities markets.”
Fertilizer had the highest increase in cost over the past year, driven primarily by emerging markets in Asia. “It’s just been tremendous,” FitzPatrick said.
Projections from the International Fertilizer Association indicate that demand for fertilizer is not going to waver, especially for potash. In the 2007-08 crop year, potash sales are expected to outgrow the sales of phosphate and nitrogen.
According to FitzPatrick, global demand for potash is so strong because of historically low levels of proper nutrient applications in emerging markets. “In the United States, farmers apply a very strong balance of nutrients and have very sophisticated methods of testing soil and applying nutrients in appropriate levels. In countries like India and China, this has not been the historical norm, and they have some catching up to do in terms of bringing soil fertility levels to par with the rest of the world.”
As fertilizer prices have risen, government subsidies for fertilizer application in developing countries has come into play in a big way, according to FitzPatrick, particularly in China and India, “as they recognize the need for food security.”
Eleven of the top 25 fertilizer-consuming countries in the world are subsidizing fertilizer costs for their growers, according to FitzPatrick. In 2007, China’s government paid $3.7 billion to support fertilizer use, while India paid $5.3 billion in subsidies. “The result is that farmers in China are less sensitive to fertilizer price increases than U.S. farmers.”
In India, the government is essentially paying for half the cost of nitrogen and potash to farmers and 41 percent of phosphate.
Fertilizer is not the only input with rising costs. Over the last 10 years, seed costs have taken a larger share of the U.S. farmer’s seed and chemical budget, FitzPatrick noted.
In 1998, 43 percent of each dollar spent for soybean seed and chemicals was spent on seed. By 2009, the figure had grown to 77 percent.
In corn, the figure has grown from 52 percent to 72 percent.
In wheat, the numbers are not quite as dramatic because wheat is not a biotech-dominated seed source. Still seed has grown from 51 percent of seed and chemical costs to 57 percent over the last 10 years.
Over the last four years, for corn, fertilizer jumps out as the biggest factor for increased production costs. Chemicals are the only input costs showing a decrease.
Ten years ago, fertilizer represented 27 percent of the total operating expense for corn. “In 2009, we expect to see fertilizer represent 49 percent of the total operating expenses for corn farmers. We’re also seeing a reduction in chemicals as a percentage of that dollar.”
FitzPatrick says variable input costs for corn are expected to rise to around $360 per acre in 2009. Seed costs are expected to rise to $68, fertilizer to $176 and fuel to $21. Allocated overhead costs are projected at $238 per acre, driven by higher land values.
For soybeans, seed is the primary expense, at a little over $53 dollars per acre, while fuel and fertilizer are expected to increase to around $28 each in 2009. Total operating costs are expected to be around $147 per acre. Allocated overhead is expected to be around $207 for soybeans, driven primarily by taxes and insurance and land value.
Wheat has also experienced a dramatic increase in the price of fertilizer. For 2009, seed prices are expected to be $13 per acre, fertilizer $63, chemicals, $10 and energy expenses, $30. Operating costs are expected to total $142 per acres for soybeans.
Land cost is a big driver for allocated overhead expenses in wheat, along with capital recovery and labor. It adds up to an allocated overhead cost of $153 per acre.
“To offset some of these costs, we expect U.S. farmers to start looking at more efficient methods of farming, such as precision agriculture and other technologies that allow for more prudent nutrient applications and more efficient soil testing,” FitzPatrick said. “It could also demand a reassessment of tillage practices, perhaps looking at no-till. We could also expect farmers to seek out fertilizer as the markets dips throughout the year, and not just when they need fertilizers.”
Potash One Initiates Two-Phased Drill Program at Its Legacy Solution Mining Project
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 12, 2008) - Potash One Inc. (the "Company" or "Potash One") (TSX:KCL) is pleased to announce that Nabors Canada has initiated drilling the first well of Potash One's resource expansion and confirmation drilling program at its Legacy Solution Mining Project in southern Saskatchewan (the "Legacy Project").
Based upon initial seismic surveys, Potash One has identified two promising solution mining development areas within the 97,240 acres of the Legacy Project. Both of the areas identified have the potential to support long term solution mining operations. Resource expansion drilling plus additional seismic surveys will be utilized to select the most favourable solution mining area to be developed based upon the potash zone temperature, thickness, average grade, continuity, and quality. The first phase of the drilling program will consist of 3 to 5 wells.
Upon the selection of the solution mining development area, the second phase of the drill program will consist of resource definition by drilling an additional 7 to 9 wells. The planned infill drilling and a 3D seismic survey of the area will be conducted to support the preparation of a revised National Instrument 43-101 compliant resource estimate with the goal of supporting a minimum of 25 years of mining at the production rate of 2 million tonnes of potash per year.
Artisan Consultants has been contracted to supervise the drilling operations and North Rim Exploration Limited has been contracted to coordinate and supervise the permitting, planning, coring, geological and wireline logging, core chain of custody, sample preparation, and QA/QC for the chemical composition of the cores. It is planned that continuous cores spanning the mid-Dawson Bay to the base of the Esterhazy Member will be taken from each well.
The Company also reports that Boyd Petrosearch has completed a 3-dimensional (3D) seismic survey covering an area of approximately 25.6 square kilometers at the Company's Legacy Project in Saskatchewan. The objective of the program was to determine the extent and distribution of the potash-bearing Prairie Evaporite Formation and provide subsurface information that facilitates the assessment of geological conditions adjacent to the historic solution pilot test area of the Legacy Project.
Results from the survey indicate that the Prairie Evaporite Formation ranges in thickness from 80 m to 200 m over the survey area. The structure of the Second Red Beds shows elevation change ranging from very steep to marginal. Since the Second Red Bed is in close proximity to the mining level, its structure suggests that future mining operations will experience minimal topography provided that collapses are avoided.
The survey has verified the extent of collapse anomalies present within the 3D seismic survey area. Experience with similar collapse anomalies in other Saskatchewan potash mines shows that mining in close proximity to these features may lead to unstable mining conditions in the immediate vicinity. A key driver for the acquisition of 3D seismic information is to delineate areas of collapse so that a mine plan can be designed to avoid these features.
Paul F. Matysek, President and Chief Executive Officer of Potash One Inc., said: "We are pleased that we are on track with our development plan. The Company is well funded and in a good position to deliver a pre-feasibility study within 6 to 9 months. Work on solution mining and processing studies to support the pre-feasibility study has commenced."
Max Ramey, PE., a qualified person as defined by National Instrument 43-101, has reviewed this news release and is responsible for its content.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F. Matysek, M.Sc., P.Geo., President and Chief Executive Officer
About Potash One Inc.
Potash One Inc. is a Toronto Stock Exchange (TSX) listed Canadian resource company engaged in the identification, acquisition, exploration and development of advanced solution mining amenable potash properties. The Company owns 100% of a 97,240 acre Potash Subsurface Exploration Permit in Saskatchewan, Canada (the "Legacy Project"). The Legacy Project was previously explored by Imperial Oil Ltd. (now Exxon) and Lumsden Potash Corporation and is adjacent to the largest producing solution potash mine in the world. In addition, the Company owns 100% of three other Potash Subsurface Exploration Permits comprising over 200,000 acres that are contiguous to the Legacy Project. The Company has a NI 43-101 resource, a solid balance sheet, and experienced technical and corporate management to advance the Legacy Project to the next stage.
FOR FURTHER INFORMATION PLEASE CONTACT:
Potash One Inc.
Paul F. Matysek, M.Sc., P.Geo.
President and Chief Executive Officer
(604) 331-4431
(604) 408-4799 (FAX)
Email: info@potash1.com
Website: www.potash1.com
Boost coming for the juniors???
As Potash Corp. shares plummet, RBC predicts stock will double
Posted: September 04, 2008, 1:17 PM by Zena Olijnyk
Market Call, Minng
Even as sharers of Potash Corp. of Saskatchewan Inc. are plummeting today, falling by more than 4% to under $158 in mid-afternoon trading, RBC Capital is expecting the stock to more than double to $375 as Chinese potash buyers begin negotiations for a pricey new contract in Seattle, Wash.
Analysts Fai Lee and Owen Martin say in a research note that Potash Corp, one of the world's largest potash producers, is currently trading at a flat realized potash price of US$430 per tonne (about US$530 per tonne delivered), but RBC believes this is far below market prices which range between US$900 and $US1,100 per tonne.
They also point out that the Belarusian Potash Company is expecting to squeeze higher contract prices out of the Chinese, while Uralkaliy OAO, a Russian potash company, predicts the negotiations will bring prices closer to spot (to about US$1,000 per tonne from US$640).
“(This is) consistent with our view that Potash Corp. Is very attractively valued,” the analysts' report says.
Uralkaliy also made several statements in its recent second quarter conference call that will benefit Potash Corp. The Russian company plans to start production at its proposed Mine-5 greenfield potash mine in 2013, but more importantly, Urakaliy would sacrifice sales volume for higher prices.
“We believe this is a significant statement and very positive for potash prices in the long term,” the report said.
As well, Uralkaliy announced Tuesday it was awarded a tender from Bangladesh at US$1,100 per tonne for October delivery, with other markets likely following suit as early as 2009.
RBC Capital derive their share price target from a valuation multiple analysis and discounted cash flow analysis based on an equity discount rate of 8.75%. The price reflects a 2009E Enterprise Value//Earnings Before Interest Depreciation Taxation and Amortization multiple of 8 and a Price/Earnings multiple of 13.5x, plus $90 per share for future potash expansion projects.
There are numerous obstacles to achieving this growth, however. An unexpected decline in global demand, a drop in fertilizer prices, negative government intervention in China and India, and even a rail-car shortage for carrying potash could all leave Potash Corp short of its target, the analysts say.
Eric Lam
Just saw this on SH. Read the following 2 posts.
http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=KCL&t=LIST&m=23688567&l=0&pd=1&r=0
Potash One Inc. Adopts Shareholder Rights Plan
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 27, 2008) - Potash One Inc. ("Potash One" or the "Company") (TSX:KCL) reports that its Board of Directors has implemented a Shareholder Rights Plan Agreement (the "Rights Plan").
The Rights Plan has been adopted to ensure the fair treatment of all Potash One shareholders in the eventuality of a possible take-over bid for the outstanding common shares of Potash One. In the event that a takeover bid should occur the Rights Plan provides a mechanism to ensure that shareholders have adequate time to properly evaluate and assess a take-over bid without facing undue pressure or coercion. The Rights Plan also provides the Board with additional time to consider any take-over bid and, if applicable, to explore alternative transactions in order to maximize shareholder value. As such, the Rights Plan is not designed to prevent take-over bids that treat Potash One shareholders fairly.
The TSX has accepted notice of the Rights Plan, subject to, among other conditions, confirmation of the Rights Plan by the Company's shareholders on September 25, 2008 at the Company's 2008 annual shareholders' meeting. If ratified by the shareholders, the Rights Plan will have a term of 3 years.
Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders are deemed to be "Permitted Bids". A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions, must remain open for a minimum of 75 days. In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of Potash One at a significant discount to the market price of the common shares at that time. The board of directors is not currently aware of any pending or proposed takeover bid for Potash One.
Potash One President and CEO, Paul Matysek commented, "This Rights Plan is simply a proactive measure that we believe is appropriate to adopt in light of the increased pace of merger and acquisition activity in the mining industry. We feel this is the prudent thing to do to protect shareholder value while we are embarking on the current growth phase of the Company."
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F. Matysek, M.Sc., P.Geo., President and Chief Executive Officer
About Potash One Inc.
Potash One Inc. is a Canadian resource company engaged in the identification, acquisition, exploration and development of advanced solution mine amenable potash properties. The Company owns 100% of a 97,240 acre Potash Subsurface Exploration Permit in Saskatchewan, Canada (the "Legacy Project"). The Legacy Project was previously explored by Imperial Oil Ltd. (now Exxon) and Lumsden Potash Corporation and is adjacent to the largest producing solution potash mine in the world. In addition, the Company owns 100% of three other Potash Subsurface Exploration Permits over 230,000 acres that are contiguous to the Legacy Project. The Company has NI 43-101 resource, a solid balance sheet, and experienced technical and corporate management to advance the Legacy Project to the next stage.
FOR FURTHER INFORMATION PLEASE CONTACT:
Potash One Inc.
Paul F. Matysek, M.Sc., P.Geo.
President and Chief Executive Officer
(604) 331-4431
(604) 408-4799 (FAX)
Email: info@potash1.com
Website: www.potash1.com
Agrium profit more than doubles
JOHN PARTRIDGE
Wednesday, August 06, 2008
Fertilizer maker Agrium Inc., like its competitors around the world, is continuing to make hay amid soaring demand and prices for its products, with an assist from its latest acquisition.
The Calgary company said Wednesday that it tallied a profit of $636-million (U.S.) or $4 a share in the second quarter, its strongest quarterly performance ever and more than double the previous high of $229-million or $1.70 a share a year ago.
The profit blew past analysts' forecasts, which averaged $2.96 a share, according to a Bloomberg survey.
Agrium estimated that the acquisition of UAP Holdings Corp., which it bought earlier this year for $2.1-billion, contributed 70 cents a share to the quarterly bottom line. UAP, based in Greeley, Col., is the biggest retailer of fertilizer, chemicals and seeds to the U.S. farming industry.
Revenue for the period, which ended June 30, rocketed to $3.94-billion from $2.09-billion in last year's second quarter, Agrium said.
“Agrium's exceptional second-quarter earnings are a result of strong performance across all business units, and the outlook for all our product lines continues to strengthen,” Chief Executive Officer Mike Wilson said in a news release. “The outlook for the second half of the year remains solid with corn, wheat and soybean prices at two to three times historic levels.”
However, Agrium and competitors such as Potash Corp. of Saskatchewan, the world's largest fertilizer producer, have seen their soaring share prices trimmed back in recent weeks amid a commodities stock rout that has investors wondering whether the fertilizer boom may have peaked.
Agrium's shares fell to $82.78 (Canadian) on the Toronto Stock Exchange Tuesday, down $6.99 from their previous close, and down $33.37 or 29 per cent from their mid-June high of $116.15. Shares of Potash Corp. also plunged, falling by $26.49 to $180.50 on the TSX. That was $65.79 below a mid-June high of $246.29 that made Potash Corp. Canada's largest public company by stock market value.
Analyst Raymond Goldie at Salman Partners in Toronto said it is not clear whether the consensus analyst forecast for the quarter included any profit contribution from UAP. But even excluding the U.S. acquisition's 70-cent-a-share delivery, Agrium's numbers were “better than expected.”
Agrium said its earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $1.03-billion (U.S.) in the second quarter, more than double the $405-million it tallied a year earlier. The key drivers were higher realized prices for seed, chemicals and nutrients, the company said.
It said share profit would have been $3.81, excluding $161-million or 68 cents a share in hedging gains and $115-million or 49 cents a share in stock-based compensation expense, both of which were higher than the company's estimates.
Agrium's wholesale division saw its EBITDA climb to a record $682-million in the quarter from $261-million a year earlier as a result of “exceptional” prices and gross margins, particularly for potash and phosphate.
In part reflecting a $177-million contribution from the UAP acquisition, Agrium's retail business reported EBITDA of $431-million, up from $150-million a year earlier.
Meanwhile, the advanced technologies unit saw its EBITDA jump by $5-million or 50 per cent to $15-million in the second quarter.
The quarterly showing brought Agrium's profit for the first half of 2008 to $831-million or $5.24 a share, up from $213-million or $1.63 in the first six months of last year. Revenue leaped to $5.1-billion from $2.95-billion, while EBITDA totalled $1.37-billion, up from $447-million, the company said.
According to Bloomberg, 8 analysts currently have “buy” recommendations on Agrium shares, while 5 others rate the stock as “hold.” The average 12-month target price for the shares is $133.70 (Canadian).
© The Globe and Mail
Not coming. Market has decided that a flobal diet is in order. No need for ferts.
Potash Corp confirms potash price hike to $1,000/t
Thu Jul 17, 2008 9:42am EDT
(All prices in U.S. dollars)
WINNIPEG, Manitoba, July 17 (Reuters) - Canpotex has sold "significant volumes" of potash to Asian spot markets for $1,000 per tonne (standard grade, delivered) for the fourth quarter, Potash Corp (POT.TO: Quote, Profile, Research, Stock Buzz) confirmed on its website.
Canpotex, the export marketing arm for Potash Corp, Mosaic Co (MOS.N: Quote, Profile, Research, Stock Buzz) and Agrium Inc (AGU.TO: Quote, Profile, Research, Stock Buzz), has told customers that all new sales shipped during the rest of 2008 will be priced at the higher level, including sales to Brazil and Latin America.
"These new and higher price levels are supported by continued strong offshore potash demand and by the historically low potash working inventories that have resulted from record demand this year," Potash Corp said on its website.
The 21 percent price hike matches what Russian competitors had earlier announced for July shipments. ($1=$1.00 Canadian) (Reporting by Roberta Rampton; Editing by Peter Galloway)
A great picture to put that sinkhole in perspective:
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24756248
It's a terrible deal. Period!
You misunderstood. I meant it's surprising to see the short positions down.
Thanks. Surprising to see them down.
I did. Could you pull up the short positions on POT?
RAY shorts connected to the financing???
Breaking News Agrium faces $280-million writeoff
Agrium faces $280-million writeoff
The Canadian Press
Friday, June 20, 2008
CALGARY — Agrium Inc. may have to write off $280-million (U.S.) it has invested in EAgrium, a venture with the Egyptian government, after Egypt's parliament voted to recommend that the plant be relocated. Moving the planned facility “is not a viable option.”
More to come
© Canadian Press
My thoughts:
This may just lift fert prices even higher and it may prompt the big guys to look for deals closer to home.
I am down to KCL and RAY.
RAY expects their permits in July.
I can't see the sector losing favor anytime soon BUT I have been wrong before.
Regardless, KCL negats the risk (right now)
Poor little RAY (Well, not so poor anymore after the last PP)is trying so hard to get out of consolidation mode.
Picking up spoils at this level as people throw them my way.
KCL is now a play for the big boys. I'll let them look after increasing my portfolio value. LOL
Saw this on the SH forum. Can anyone confirm?
Potash One Started At Outperform, C$12 Tgt By Natl Bk >KCL.T
Out of the traders I bought yesterday with a 50 cent per share gain. That worked nicely.
Thanks Mr Market
Picked up some traders just now sub $5. They will be for sale tomorrow on the TSX. Betting on $5.50.
Fingers and toes crossed ...
New ATH: $5.15 and looking pretty solid above $5
Nice deal for KCL
Potash One Exercises Its Right to Subscribe to Private Placement in a Potash Development Company
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 16, 2008) - Potash One Inc. (the "Company" or "Potash One") (TSX VENTURE:KCL) is pleased to announce that it has exercised its right (as previously announced on May 13, 2008) to fully subscribe to the initial private placement financing of Potash North Resource Corp. ("PON"). The Company has subscribed for 27 percent of the private placement, which equates to 6,583,850 units at $0.35 per unit, for total consideration of $2,304,347. Each unit consists of one common share and one common share purchase warrant, each warrant exercisable to acquire a further common share at a price of $0.50 per share for two years. As a result of this transaction Potash One holds approximately 13% of PON's outstanding shares. In addition, Potash One holds warrants which, if exercised, could result in Potash One holding 13,167,000 shares of PON, increasing its ownership interest to up to 23% of the outstanding shares of PON, assuming no other dilutive securities of PON are exercised.
Paul F. Matysek, President and Chief Executive Officer of Potash One Inc., said: "This decision provides the Company with a number of attractive options, such as, 1) a non-dilutive source of funding for the Company, through partial or full monetization of PON shares; and 2) a continued exposure to the conventional mining Potash sector while allowing Potash One to focus on developing its large 336,343 acres of solution mining amenable potash lands with particular emphasis on the Legacy Project."
The completion of this private placement coincided with the completion of the acquisition of Permits KP 416 and 417 pursuant to which PON paid the balance of the purchase price for the permits, in the amount of $2,587,880. In connection with that transaction, Potash One entered into an Assignment, Assumption, Release and Consent Agreement with PON and Peninsula Merchant Syndications Inc. (the "Assignment Agreement"). Pursuant to the Assignment Agreement, PON has confirmed Potash One's (i) right to purchase up to 20% of any equity securities issued by PON in financing transactions until the earlier of such time as Potash One holds less than 5% of the outstanding shares of PON and such time as PON has completed 3 further equity financings, and (ii) nominate a director to the board of PON until the later of one year following closing of the acquisition of the permits and such time as Potash One holds less than 5% of the outstanding shares of PON. Potash One's nominee to the board, Paul Matysek, was appointed concurrently with the closing of the acquisition.
Potash One has acquired securities of PON for investment purposes, and may acquire additional shares of PON pursuant to the exercise of its rights under the Assignment Agreement.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F. Matysek, M.Sc., P.Geo.
About Potash One Inc.
Potash One Inc. is a Canadian resource company engaged in the identification, acquisition, exploration and development of advanced solution mine amenable potash properties. The Company holds an option to acquire 100% interest in a 97,240 acre Potash Subsurface Exploration Permit ("the Legacy Project") and owns 100% of three other Potash Subsurface Exploration Permits covering 239,103 acres that are contiguous to the Legacy Project in Saskatchewan, Canada. The Legacy Project was previously explored by Imperial Oil Ltd. (now Exxon) and Lumsden Potash Corporation and is adjacent to one of the largest producing solution potash mines in the world. The Company has a solid balance sheet and experienced technical and corporate management to advance its current project to the next level.
Forward Looking Statement
This release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration and development activities and events or developments, including the issuance of permits upon acceptance of permit applications, that the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and development successes, continued availability of capital and financing, the denial of permit applications by applicable government authorities, and general economic, market or business conditions. Please see our public filings at www.sedar.com for further information.
FOR FURTHER INFORMATION PLEASE CONTACT:
Potash One Inc.
Paul F. Matysek, M.Sc., P.Geo.
President and Chief Executive Officer
(604) 331-4431
(604) 608-4979 (FAX)
Email: info@potash1.com
Website: www.potash1.com
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
The Northern Miner, Volume 94 Number 17, Jun 16 - 22, 2008
Make way for rising potash juniors
By Susan Kirwin
A $25-million financing cooked up overnight for new junior Potash North Resource (PON-V, PTNHF-O) shows how hungry investors are for up-and-comers moving into the fertilizer business.
Led by Canaccord Capital, the private placement is a "best efforts" deal that will see 10 million units go for $2.50 apiece with a $5-million overallotment option.
Each unit consists of one share and a purchase warrant exercisable for $4 over the next 24 months. The offering should close by July 7.
As a part of the arrangement, Potash One (KCL-V, KCLOF-O) has the right to subscribe for up to 20% of the units sold under the offering -- up to another 3 million units for $7.5 million.
Potash North came to be on May 29, when it changed its name from Timer Exploration and completed a two-for-one share split. During its first day of trading as Potash North on June 4, the stock soared more than 650% to $1.55 per share from a mere 20¢.
On June 3 and June 5, Potash North was granted two neighbouring Saskatchewan potash exploration permits known as KP416 and KP417. The company acquired them from Peninsula Merchant Syndications for $1.95 million in cash and a $1.75-million unsecured convertible debenture. Potash North must also take on Peninsula's obligation to pay Potash One about $2.6 million in cash.
The properties cover an area of 758 sq. km. About 20 km to the northeast, is Mosaic Co.'s (MOS-N) Esterhazy K1 and K2 underground potash mines, while about 45 km from the southernmost boundary is Potash Corp. of Saskatchewan's (POT-T, POT-N) Rocanville mine.
Potash North is one of many companies adding potash assets to their portfolios, since the price of potash has skyrocketed in the last year. According to a Scotiabank commodity report by Patricia Mohr, prices climbed to a new record of US$504 in April from US$412.50 per tonne in March -- a 180% increase from the previous year.
Canpotex, the overseas marketing agent of Western Canada's three major fertilizer producers, plans to increase prices to US$725 per tonne (including freight charges) in all Southeast Asian markets in June and will likely eventually boost prices to as high as US$1,000 per tonne.
Traditionally, it's been the few big producers like Potash Corp. of Saskatchewan and Mosaic making headlines and reaping the benefits of the plentiful commodity, but things are changing.
Analyst Terence Ortslan, who specializes in potash, says he's not surprised to see so many companies adding potash properties to their rosters.
"I believe this trend has just started," Ortslan says.
He compares the current state of the potash industry to that of uranium a few years back. There were only a handful of major uranium companies and metals prices were low as well.
"When the market turned, everybody scrambled," Ortslan says. "Now everybody's looking for uranium and gold and base metals and so on."
Ortslan says that until now, it has been very rare to see anyone promoting fertilizer-based companies.
A quick search of the word "potash" on the newswire service Marketwire.com pulled up more than 20 results, with 12 different companies announcing potash-related news during the month of May. The same search for May 2007 pulled up four results, but none of the companies had an interest in fertilizer-based products.
Ortslan says there's a reason for that:
"We regard potash and phosphate as 'need' commodities, not 'want' commodities," Ortslan says.
The world population has more than doubled since 1950 to 6.6 billion people from 2.2 billion, and is projected to grow to 9 billion by 2050. That means we'll need more food. But the pressure is being felt now because people in populous and emerging countries like China, India and Brazil, have more buying power and are eating more meat.
That's putting staple crops like corn, wheat and rice, in high demand, lowering inventories and pushing up prices. Corn alone -- which is also doing double duty to produce ethanol fuel -- consumes about 40% of all potash, nitrogen and phosphorus in the United States.
"Corn is the biggest consumer of potash," Ortslan says, "And North America produces half the world's basic food."
In the current conditions, the potash market is strong -- Ortslan compares the current fertilizer prices to gold at US$1,200 per oz. -- but the fundamentals are different, he says.
"The indicator for gold is price; the indicator for potash is volume," he says. "The market needs volume."
Ortslan says the price of fertilizer does not play a major role in the overall costs for farmers, who are more concerned about availability so they can increase their yields.
The other problem is that fertilizer is a bulk commodity and that infrastructure can be a problem for a smaller company. While a company could build a heap-leach gold operation for under $200 million, Ortslan says, "you cannot do that for phosphate or potash -- those things are extremely expensive. An integrated operation would cost up to two billion dollars."
He says the cost barrier is very high for small companies and that the big producers aren't looking for extra resources. "They have reserves for the next hundred years."
Ortslan says the future will see smaller producers and that small exploration companies will end up consolidating their resources.
"It is possible something may be financed but the most likely scenario is that they will have partners come through the food chain."
Big cross just now @ $4.45 and turning green. This thing just about qualifies for daytrading ...
I guess that depends on what you consider "real".
They are sitting in the right spot. They just issued the 43-101 which looks good. They just filled up the bank account. Their permits are due in a few weeks.
To me that's more real than 90% of the other junior POT diggers.
Any thoughts on the RAY NR today? I am somewhat "lost" which isn't a new feeling.
Was easy to geet faked out on RAY today. Sold 1/3. The rest can wait for permit or buyout.
I agree. They should take a page out of your book. Do some drilling and invest in those who do. LOL
Have a great fishing trip
KCL - $8.80 target
Not sure if true …
http://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=23440609&l=0&r=0&s=PON&t=LIST
Interesting part of PON NR today:
“In addition, Potash One Inc. (TSX VENTURE:KCL) has rights to subscribe for up to 20% of the Units sold under the offering, which would entitle them to acquire up to a further 3,000,000 Units for further proceeds of up to $7,500,000.”
Could be a pretty good deal for KCL if PON continues its run.
PON ... What a well "managed" stock. LOL
Yes, RAY is halted pending news. 43-101?
All ferts doing well today. Even KCL shows promising momo.
Same here. For the last 3 days. Hoping to turn some into LT. Headlines come and go ...