Potash One (KCL)
- Scotia Capital's update on April 7, 2010. -
Ben Isaacson,
Company Profile - Potash One (KCL) is a natural resource company involved in the acquisition, exploration, and development of potash resource properties. It has six subsurface exploration permits in Saskatchewan, covering 515,000 acres. The Legacy project represents the company's primary focus, which has a measured and indicated resource of 251M mt KCl and an inferred resource of 853M mt KCl.
In the summer of 2009, a prefeasibility study was completed for Legacy. President/CEO: Paul Matysek. Chairman: Robert Friedland. Insider ownership (FD basis): ~16.5%.
Business Mix - (Based on revenues unless otherwise noted) 100% potash exploration and development
Performance Drivers - Financing, development progress, long-term potash price, potash demand/supply
Comparable Companies - (TSX unless otherwise noted) - API, MAA, WPX.V, AAA.V, IPC.V
Potash One announced the purchase of alloyed materials required for the .fabrication of evaporation/crystallization equipment.
This marks the company’s first significant order of materials, as the company works towards a commissioning and start-up of Legacy in late 2013 (we forecast early 2014).
Materials purchased are needed for the fabrication of equipment in Legacy’s processing facility and will allow for major equipment delivery in 2012. Whiting Equipment Canada Ltd. will supply facility equipment for the project.
While this is clearly a step in the right direction for Potash One, we expect the stock price to overlook this news as it awaits the summer release of the .Legacy feasibility study, and ultimately, a financing arrangement.
We maintain our $5.25 one-year target and 1-Sector Outperform rating.
