PPRTF is getting very close to its support levels. The short term averages are likely to provide good support in the $0.21 to $0.20 range. The volumes over the last few days, when the stock has retracted, have been much lower (90K compared with average of around 134K). This indicates lack of momentum on the downside. This is mainly because traders may feel that the support around $0.21 will hold, and the stock may resume its uptrend after that. The recent news about the preliminary economic assessment report (PEA) has been positive for the company. The costing for the mining indicates that the properties with PPRTF are extremely cost efficient on the capital and operational expenditure front. The results give capex figures of $1.95B for a mine which is likely to produce 2.5 million tonnes for the next 26 years. The payback period for the capex is only 8 years. With around 400 million tonnes of mineral resources in the property (measured and indicated), and a KCl grade of around 14.5%, the potential of the mines can be easily estimated. Around 1800 employees will be need for the entire operation, and the IRRs calculated are in excess of 27%. This is nearly double the industry averages starting at around 15%. The low cost will give the company competitive advantage through cost leadership, and it will be able to operate at relatively higher margins as compared with its peers. As per management commentary, the deposits near Holbrook are similar to the potash mine near Carlsbad, N.M., which has been in operation since 1931. Importantly, mining is relatively easier in US due to a stable political environment. The company stated that the report will be taken to prospective strategic partners with whom the company is discussion for last one year. The report may increase the prospects of funding from such investors and also invite attention from other players of the sector.
