You need to really look at the strategic benefits of this project before simply throwing us into the pool with those others because ELM has some very special things going for it.
I attended the meeting today and share the following:
Potash prices have bottomed and ticked up from US$305 per tonne to now $325 per tonne with prices to Brazil fetching close to $400 per tonne now which is our target market. Current Potash inventory levels are very low as customers have been buying significant amounts taking advantage of the low prices. The beauty of it for ELM is that our key market is Brazil and Brazil imports 90% of their potash and they are importing record amounts of potash! A number of Brazilian Potash explorer companies have given it a good go exploring for Potash but they haven't found anything special yet. eg. look at Verde Potash on page 8 and 9 of today's presentation. It is a joke with OPEX at $285 per tonne. ELM will be able to deliver Potash to the gates of Brazils' farmers cheaper than Verde will be able to get it out of the ground!
Also, there has been a change in major shareholding of Uralkali with a new Putin backed shareholder which is seeing the company swinging back to a price over volume strategy ie. a resumption of the old cartel. This will see prices back over $400 imo.
Pala exited ELM because they have changed their strategy from a fund investing in exploration companies to now investing in companies that are close to or currently producing.
We are in serious negotiations with companies that are keen to do deals with the Materials handling infrastructure and the Jetty facility which will slash our CAPEX requirements.
The investment agreement between ELM and ROC officials does not involve the government investing money. It is to do with cementing their 10% royalty and giving ELM full security over the license, locally and internationally.
Given the delay Dingyi has caused us, the ROC officials have now extended us more time to meet our mining license requirements which was good to hear because it was always a concern of mine that the delays may have put the officials offside. They are pleased that we are now drilling Dougou. They understand the process of how these takeovers work and how they can take a lot more time than predicted as they have had problems with Sundance and the Exarro takeover.
Pages 8,9 and 22 of today's investor presentation are quite incredible and very exciting for us shareholders.
We have the lowest FOB cash cost of ALL developers and producers.
As if this isn't enough, we have the cheapest freight cost to the fastest growing Potash importer in the world, being Brazil.
We can deliver Potash to Brazil 35% cheaper than Uralkali, who has the cheapest OPEX of all current producers.
Then there is the African Potash market which is starting to take off as well.
It is hard to believe that we only have a market cap of only $76 million but I don't think that will last long.....
K2P Price at posting:
25.0¢ Sentiment: None Disclosure: Held
