Potash Investing News

By Daniella D’Alimonte - Exclusive to Potash Investing News

Potash Corp of Saskatchewan (TSX: POT) has stopped production at its Cory mine because of a strike that started last week. 

The strike began after the company’s mediated talks with the United Steelworkers union broke off August 7.  No further talks have been scheduled with the union.  The United Steelworkers say strikers from the three mines will stay on the picket lines for as long as it takes to get their desired contract.  However, Potash Corp is not budging.

“We’ve been very clear from the start that we’ve made our best offer,” said Bill Johnson, director of public relations for Potash Corp in a Canwest News Service interview. “We certainly hope it is not going to be a long strike but the duration of this work stoppage is really up to the union.”

Potash Corps’ Cory mine, as well as its Patience Lake and Allan mines which are currently closed for maintenance, produce 30 per cent of the company’s total output as well as around 6 per cent of the world’s potash supply.  Concerns have been raised regarding how the strike will affect prices as well as supply in the already tight global market. 

Potash Corp is currently sitting at $178.58 per share, down from its record high of $244 June 18. 

Potash One Inc. (TSX: KCL) has been on a slow decline for over two months since it peaked mid-June at over $6.00 per share.  Down another 1.29 per cent or $0.04, it is currently at $3.05 per share.

The company recently announced the completion of the environmental assessment on its  Legacy Potash Solution Mining Project.  The assessment, performed by Golder Associates, revealed no significant issues that would threaten the project or its deadlines, said Paul Matysek, President and CEO of Potash One in a press release. 

The object of the assessment was to identify possible environmental risks in regards to the proposed location for the company’s new brine extraction site, storage and processing facilities.  Golder also put the requirements of the Saskatchewan Environmental Assessment Act towards the project. A regulatory strategy, a community consultation plan and an environmental assessment plan were established to lead and inform Potash One through the approval process.

Athabasca Potash Inc. (TSX: API), also on the slow decline, is now sitting at around $4.60 per share.  Since the beginning of July it has gone down over $2.70 per share.

Athabasca released its second quarter results with a net loss of $209,894 or $0.01 per share.  This is a $137,570 increase from last year’s second quarter results.

The company also reported a $588,476 increase in total operating costs for the second quarter, which are up to $686,322.  However Athabasca is still in the exploration phase thus making no revenue.  The added costs are due to an increase in the technical team as well as increases in management fees, wages, business development, investor relations costs as well as promotional and travel costs, said Calder Chubey, office manager for Athabasca .   

Europe’s largest potash producer, K+S AG, has announced a Q2 net income of $344.6 million, a more than fivefold increase from last year’s $63 million.

“We have achieved our best quarter so far in the second quarter of 2008. There has been a further tangible increase in global demand for fertilizers which, against a backdrop of availability bottlenecks on the markets, has led to a significant increase in prices for nitrogen, phosphate and potash fertilizers,” said Norbert Steiner, chairman of the Executive Board of Directors of K+S AG on its website.

Marifil Mines Ltd. (TSX: MFM) has signed a letter of intent to sell its K-2 potash property to a new private Canadian corporation, Oxbow Holdings Corp.

The 99,964 hectares of land has confirmed potash presence in an area over 200 square kilometres. 

Under the agreement, Marifil will receive 67.5 per cent or 13,500,000 of Oxbow’s shares.  In addition, Marifil will be given anti-dilution rights allowing it to retain a minimum of 50 per cent equity interest by participating in any private equity offerings for 12 months following the closing or for up to 24 months for any public offerings.  The company will also receive $750,000 in specified increments over the next year as well as $150,000 annually beginning on the second anniversary of the closing, ending after the first two following milestone payment.