Thanks had seen that in my email and forgot about it, worth posting the text...
Potash One Inc. (TSXv:KCL) The Perfect Storm…
Potash – The Little Talked About Commodity
At the Market Traders, we have been quite literally pounding the table of late to remind people that despite all the bleak news surrounding sub-prime mortgages and Wall Street write-downs/meltdowns, the global economy is still in the throes of a powerful, albeit volatile, “commodity supercycle” – the likes of which has never been seen before.
Mention “commodity supercycle” and visions of Copper, Nickel, Steel, Concrete and what have you all spring to the minds of investors. But there is a commodity item out there that is very quietly enjoying a bull market all of its own. This commodity item is seldom talked about in the mainstream media and as a result most investors have never heard of it. The commodity I speak of is Potash.
Potash…What is it ?
Simply stated, Potassium is the seventh most abundant element in the earth's crust, and is a major plant and crop nutrient. The main potash fertilizer products include potassium sulphate (K2SO4) and potassium nitrate (KNO3). About 95% of world potash consumption is used in agricultural fertilizers. There are no substitutes for Potash in fertilizer.
Why the Bull Market for Potash?
To understand why potash is enjoying a bull market, all one need do is take a closer look at India, China and Brazil and the answer will hit you right between the eyes. Each year in India and China, 40 million people attain “middle class status”. Newly found prosperity creates further demand for an improved diet with more meat protein. But where is this additional protein to come from? The drive to prosperity has seen vast tracts of agricultural land swallowed up in order to build massive infrastructure. China has now given up so much agricultural land it is on the verge of becoming a Corn importer for the first time in its history. Corn is vital for livestock and poultry feed so that enough pork and poultry can be produced to feed the masses. China has got to produce more and grow more from the agricultural land that remains.
In India, food production has not kept pace with food demand so it too has got to squeeze more productivity out of its land. Brazil as well has stepped up to the plate to provide Europeans non-GMO (genetically modified) grains. Put it all together, and you see that Brazil is under pressure to increase its agricultural output.
So how do you attain greater crop output from your land so as to provide bio-fuels, feed for animals, and grains for human consumption? The answer is simple. You fertilize the land to enhance its vitality.
Potash is enjoying a bull market because the world needs potash as a major source of fertilizer. Small wonder then, that not that many years ago Potash prices were $100/tonne. Today they are over $625/tonne with no new supply coming into the market anytime soon.
Potash One – Competitive Edge
Canada is a major supplier of Potash thanks to its prolific abundance in the Province of Saskatchewan. Potash One (KCL-TSXv) has very smoothly positioned itself right in the heart of the action in Saskatchewan with its 97,400 acre Legacy Project. I say smoothly because the Legacy Project immediately adjoins the largest solution potash mine in the world, operated by The Mosaic Company (N:MOS).
The Legacy property has historically shown it is amenable to solution mining by previous operators. The latest 43-101 technical report also suggests it hosts an estimated 400 million tonnes of Potash. (A 200 year mine life at 2M tonnes per year – trust me, they don’t need to find anymore Potash.)
Solution mining offers a lower capital cost by about half of a hard rock operation, and a much quicker timeline to production than competitors. In addition to the Legacy, Potash One recently secured the rights to the majority potential solution mining ground literally creating a monopoly for junior solution miners. Smart move by the team, who by the way, sold their last company for $1.2B.
Potash demand is growing by 2-3M tonnes per year right now with no new major supply coming online for 6-7 years. Having a solution mine with a timeline to production within that timeframe (4-5 years) is a major advantage to capture sky rocketing Potash prices.
Potash One Inc – Do the Math
KCL currently has 39 million shares outstanding. With the shares trading in the $3.30 range, this gives KCL a market capitalization of about $128 million with $28 in the bank.
Potash is currently selling in the marketplace at just over $625 per tonne. Assign even a nominal economic value to this resource and it does not take long to see that the market capitalization of Potash One does not even come close to reflecting the economic value of what is contained on the Legacy property.
Potash One - the Perfect Storm
Potash One looks positioned to experience the perfect storm. A raging bull market for potash; a property located in North America’s most prolific potash producing regions; major potash producer as a neighbor; and a small market capitalization that does not even come close to reflecting the economic potential at hand. At the Market Traders, we will be watching the Potash One story with great interest.
We are initiating coverage of Potash One with a Buy rating on the stock. We especially like the MACD’s on the chart representing an oversold position we haven’t seen on the stock for over a year. For further information, be sure to visit the KCL website at www.potash1.com.
News 
Market Data 
Discover 
