We are all waiting on the Satimola deal to be completed. I bet we won't have to wait too much longer.
The current market darling of Potash developers is Highfield (HFR) It is located in spain , completed a FS and about to start construction. banks are lining up, and it has a good management.
The project they will build is called MUGA. Resource of 294M Tonnes, Reserve of 253Mt with a grade of 11.5% K2O. Capex 250M Euros, current cash in bank $107M AUD. Planned production 1.1Mt per annum for 47 years. Low cost high profit margin project. NPV 1.4BLN at 10%. Current market cap $540M.
Cost to build 259M Euros = 400M AUD
Capital cost per tonne of annual production (Capital intensity) is $363 per tonne, which I am told is mid range.
Satimola has a resource of 6Billion Tonnes at 16% (50/50 indicated/inferred). Publicly the company signed a ramework Agreement with the Chinese and Kazakh government s to develop satimola and 2 other potash deposits so as to supply 7 million tones per annum to CHINA over the next 10 years. Forget about selling product to the yanks, Europeans , this product goes to the farmers in China. This little aussie nobody has heard about company will be a major supplier of K fertilizer to the Chinese people. So if HFR can have a project value of 1.4B on 1.1Mtpa in sales, what is KPC’s 7Mtpa worth.
a lot
KPC Price at posting:
13.5¢ Sentiment: Buy Disclosure: Held
