Western Potash Corporation
Acquisition, evaluation and exploration of potash mineral properties in Western Canada.
Message: In Talks with potential partners
Western Potash in talks for potential partnership11 hours ago by Thomson Reuters
* Talks with China's Sinofert go nowhere
* Main interest coming from China and India
* Company hopes to have deal in place by November
April 12 (Reuters) - Western Potash Corp has been in talks with potential partners for the better part of the year and the Canadian exploration company hopes to have a deal in place before the end of the year, a company executive said on Thursday.
"Management's preference is a partnership and our talks are focused around a partnership," John Costigan, the company's vice president of corporate development said, adding that it was outside the company's hands if any party opted to make a bid instead.
"We think a partnership creates much more value for shareholders than an outright acquisition," he added.
Costigan confirmed an earlier Wall Street Journal report that the company had held talks with Chinese fertilizer producer Sinofert Holdings Ltd. However, those talks have now ended and that option is off the table, he said.
The interest from potential partners is mainly coming from players in India and China, he said.
"If you look at Saskatchewan right now, the Indians and Chinese are the only ones that are not in there," he said.
Potash, a key crop nutrient, is produced in only a handful of countries, with Canadian and Russian players controlling the vast majority of global potash exports.
Global mining giant BHP Billiton a few years ago acquired the Jansen project in the potash-rich Canadian province of Saskatchewan and in 2010 it made a failed attempt to acquire the world's top producer of the nutrient, Potash Corp.
German potash miner K+S in November 2010 acquired the so-called Legacy potash project as part of its acquisition of Potash One Inc.
Earlier this month, IC Potash agreed to a 19.9 percent stake sale to Norwegian fertilizer maker Yara for C$39.8 million ($39.9 million).
Western Potash's Costigan expects potential deals to include selling an equity stake in the company itself or a stake in the project.
The Milestone project's potash resources are estimated at 66.6 million tonnes of measured resource, 186.9 million tonnes of indicated resource.
Costigan said production at the Milestone project in Saskatchewan will start in 2016. Production is expected to ramp up to about 2.8 million tonnes per year. Initial capital spending for the project is expected to be around about C$2.46 billion.
"Ideally we'd like to have a deal in place before November when our feasibility study is done," Costigan said.
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