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Ed, have you read this:"Potash supplies are so tight that a case could be made to charge as much as $5,000 a tonne, the chief financial officer of Potash Corp said earlier this week."
That's ~$2 trillion worth of inferred resource for Potash One,and Potash One also owns shares in Potash North!
Potash One, Potash North: Winning Race to Production
by: James West posted on: August 27, 2008 | about stocks: KCLOF.PK / PTNHF.PK
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The intense interest in potash in the last 24 months is due to the increased yield requirement from the global food production conglomerate of a increasingly crowded planet. Combined with supply tightness and higher potash prices, there is strong motivation to bring new potash mines on stream as quickly as possible.
As the world's population continues to increase (to a forecasted 9 billion people by 2050), developing countries are consuming more meat (which has a multiplier effect on grain consumption), and with the amount of arable land decreasing globally, farmers will need to produce higher yields from less land. The combination of these factors requires increased fertilizer application to maximize yield, supporting potash demand growth of 2%-3% per year (or 1.5 million tonnes-2.0 million tonnes per year).
Canada currently ranks as the world’s number one source of potash, most of which is concentrated in southern Saskatchewan.
At present, there are 10 potash mines located in Saskatchewan and two additional mines located in the province of New Brunswick. Additional potash exploration initiatives have been undertaken by a variety of new companies, which have focused their activity in Saskatchewan and south-west Manitoba.
In a research report dated August 25, 2008, CIBC World Markets identifies two of the most promising companies as leading the race to production in Saskatchewan, where grades are highest and infrastructure present.
These are Potash One Inc (KCLOF.PK) and Potash North Resource Corporation (PTNHF.PK).
The reasons these two companies lead the race is by virtue of the management teams and the financial firepower they bring to bear on the future development prospect of actually putting a mine into production, which costs in excess of $4 billion for a solution mine and over $5 billion for a conventional mine.
In the case of Potash One, company president Paul Matysek has demonstrated the ability to bring a company from a junior to a billion dollar takeout target with the sale of Uranium One to sxrUranium for over $1 billion in 2005. Potash North is headed by serial mining entrepreneur Craig Angus who has overseen the development of many grass roots projects into major producing mines.
Potash One is developing the the Legacy project, which contains economically viable potash deposits in the Patience Lake and Belle Plaine members. The potash in these members is best recovered through solution mining methods. The magnesium chloride levels of both the beds under investigation are well below threshold values (1% of magnesium content is acceptable) and, therefore, are still considered suitable candidates for potash extraction. Potash One has found that the indicated and inferred resource levels for the Patience Lake and Belle Plaine solution mines are 37 million tonnes of K20 and 360 million tonnes of K20, respectively.
Potash North acquired interest in two potash exploration permits covering part of eastern Saskatchewan's Middle Devonian age Prairie Evaporate Formation sequence. The Prairie Evaporite Formation sequence hosts the potash beds currently mined at the nearby Rocanville, Mosaic K-1 and K-2 mines.
Potash One has been the subject of several research reports by major Canadian investment banks. GMP Securities in Toronto issued a buy recommendation to $8.80 a share on June 10 this year, and Jennings Capital suggested its clients buy shares in Potash One with a target over $10.00. But the National Bank, also in June, issued a buy recommendation putting its target at a whopping $12.00 a share.
Potash North recently closed a financing wherein it raised a total of $30,750,000 at $2.50 per unit giving the company $30.4 million in the treasury. In July, Potash North engaged Boyd| Petro Search of Calgary, Alberta to conduct a 2D seismic survey of the KP 416 and KP 417 permit areas.
BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP) have become intensely active in potash this year, which BHP making an acquisition of a junior and Rio Tinto publicly stating its intention to provide 10% of the global potash market by 2012.
Considering the advanced state and superior land positions of both Potash One and Potash North, it would not be at all surprising to see one or both of these companies bought.
Potash Demand Going Forward
In 2007 consumption of potash totaled 30 million nutrient tons, with China, the U.S., Brazil, India and Southeast Asia consuming two-thirds of global potash fertilizer. Expectations are that global potash demand over the next four to five years will grow at an annualized rate of "3% driven by increased demand from Asia and South America. Over the next couple of years, though, we could see demand below trend levels given that the world is short potash and importing countries are on allocation.
China: While China has been the largest importer of potash, and in 2007 saw demand increase "20% year over year, over the next five years, demand is expected to grow at a lower rate (roughly 2%) given the increase in domestic production.
For 2008, however, expectations are that potash demand will decline given rising prices and major suppliers placing China on allocation.
India: Expectations are that total nutrient demand will remain strong in India, expected to grow 7% year over year in 2008/2009. The region's long-term objective is to balance its fertilizer application with an increasing focus on phosphate and potash versus nitrogen. In South Asia (India, Pakistan and Bangladesh), potash demand will be supported by grain self-sufficiency objectives by the government and fertilizer subsidies.
South America: South America saw a surge in potash demand in 2007, up 16.3% year over year, and the outlook remains positive. Over the medium term, expectations are that potash demand will continue to grow as the region expands its soybean output (soybean requires potash and phosphate but very little nitrogen).
North America: Fertilizer consumption contracted in 2008 as U.S. farmers switched from corn to soybean (which is less fertilizer intensive). With corn acres expected to recover next year, regional fertilizer consumption is expected to increase, with potash demand forecast to be up 3.6% year over year. Over the next five years, potash demand growth is expected to increase 1.5%/annum driven by strong agricultural pricing and growth in non-traditional grain demand (i.e., biofuel
Very interesting......
Tackler,,John,,Ed,, whatyathinkin??
historically this has always been a slow time for ferts, peaks always in Nov and Dec. and spring. One thing I know.......Ferts will be in demand - just look at a 3 year chart for any of the big companies. life is good, just relax.
I would like to add some reality to that. Potash One, unlike the other Jrs, is going to produce in 2012 or be buyout. All the others are somewhere 2 to 5 years beyond that date. Alternative fuel and food will keep potash prices up and beyond. The other commodities are not so reliable.
just a thought............what if they don't need to update us any more because they got something bigger they are working on?? just a thought
where are you guys?
I can't get over the volume.
in the form of bricks! holy cow! look at our stock.
did I mention that it was my birthday today.
Ok, I will say it, since no one else will. Isn't it strange that the chinese seem to have the most quotations and interest? I feel like Tackler, the time will come that I or someone will refer to this message.
a month from now anyone bragging that they got in below $6 will be envied. For all you that have sweated thru and prevailed... congratulations!
I went to KCL.TO and it was asking 5.99, went down alittle since, but this is going to be a good day.
Tackler- I salute. What do you see next in your crystal ball.
you are hoping for a lot, but why not, the sky is the limit. Potash One is # 1 Jr and it has just become reconized as such. Good job KCL!
I can't believe the talk when a little action happens. already talk of a buyout @ $10. Hope not. not enough for what they have. top Jr.
someone just bought a big chunk. can't help but love it.
Is this what we have been waiting for or what? a hero isn't a hero unless someone knows.
here we go again........
did someone just buy a big chunk? help me out.
Yeah, thanks for asking! I got a little high yesterday... but feeling alittle more myself today. I do feel that we are being promoted alittle better now, but sad that it isn't coming from KCL, rather PON. But we are out there now.
Potash One will be the first Jr. to produce. 1st one wins!
why am I still not happy?
hey thanks for the info
at least I know I'm not alone. thanks for the almost upbeat commentary.
when even caj goes thru the roof and we are hovering in the 3.50 mark I feel it might be time to move on.....the company is doing nothing to encourage the shares to go up. any input? where are you guys anyways? am I the only one that has hung in there?
LT Matt, I've talked to a rep and have emailed them several times. I've always gotten a reply back. Vague, but a reply.
thanks for the info. I remember the company saying that the reports they begun in March would be done by the 1st of May. Even some progress report would be helpful.
a little off the subject... can anyone enlighten me with what a " shareholders right plan" is? It is something api adopted. Is it something kcl should consider to raise more interest in their company. I know they wouldn't have to go anywhere for financing if their stock was as high as api. Their (api) structure seems to attract more shareholders.
I hope they consider the shareholders in the deal.
more cheap paper
that's what I thought, there was some talk a few months ago that China was looking for some Canadian Potash land.
I remember when in January and Febuary when you googled potash the first page was 1/2 potash one. someone is not doing their job. Oh and by the way, that was because of this message board, most of the articles with the word "potash" was our discussions. So here I go again..... Potash One 1st to production. KCL is first to production of all the potash jrs. doing my part.
I've email them and received that date from them, but I've also gleaned comments from the company with words like "several years" "a few years" and " on the positive side a couple years". So I believe they are working hard to improve that date. It only benefits them.
interesting stats in this article. favors kcl. I don't agree with projection of production time. potash one seems to think 2012 or sooner. but it was interesting why they said api shares were higher, It makes since now and I believe that it will shift in time.
http://theinvestar.com/potasharenashrinkingafterbhpsacquisitionofanglopotash.html
I'm thinking this is the last chance to buy so low? any feed back?
if the reports don't come out soon or reasons from the company why not- people are going to think that something is up with them. communication with the public/shareholders is key here.
I do believe we have the next jr to production, no problem, I just don't understand all these other jrs go up and they have 2 to 3 yrs more before production. what gives? we are 1st to production, we are the lowest per share. maybe not enough clarity with the public? not enough "education" on solution mining?
I'm so tired of making excuses for this company. We should be @ $5 by now...........I'm beginning to think that "the company" knows something we don't know. The warrants can't be all there is that is holding us back. And wasn't the results from the 2 studies suppose to be back by now?
can't
I thing I wish I could do.....forget about KCL til Christmas and open up my acct for my Christmas present.
enlighten me Tackler. Why are we down today and all the other Jrs are up?