Yesterday's results call. A few interesting takeaways. Thank you
toro404 for the link. Very much appreciated.
A long call yesterday with a huge amount of information. A couple of thoughts:
1. Verde are aiming for a New York listing in Q3 this year. They haven't yet decided between the NYSE or NASDAQ. This will be a duel listing alongside the current TSX.
2. They are planning the opening ceremony for Plant 2 in August this year. Furthermore, they plan to have Plant 2 at full production before the end of the year - so this would put the Company at a capacity of 3mt pa (Plant 2 at 2.4mt capacity).
3. There is always a lot of questions around is the Company capturing current prices, and how much product was actually sold in the quarter that is being reported and how much pre sold in earlier quarters at lower prices, i.e. what are the achieved pricing expectations going forward. Lots of interesting stuff here - first, they repeated several times that they continue to get priced directly to KCl (So for K Forte, delivered KCl price / 6). Second, just to give an example of the % of pre-sells in a quarter, for Q2 (i.e. now) 70% of the produce shipped in the quarter would have been pre-sold in Q1 of this year, and 2021. As Plant 2 ramps up, and new tonnage capacity comes on line in a big way, we should get a lower number of tonnes pre-sold, with new capacity sold into the current quarter That being said, Verde also confirmed they are locking in todays price from deliveries into 2023.
4. On the topic of Plant 3, which will produce 10mt pa, with the aim to be in production in 2024 - construction is still planned for second half of 2023. For this to happen, Verde aim to have all mining and environmental licenses in place for Plant 3 by Q2 2023.
5. Maybe massive new - CV talked at length about how Russian and Belarusain potash is still arriving in Brazil at similar volumes than before. He has some recent Bank Research that he was referring to (c.55 mins into the call). It seems that the US has deliberately not sanctioned the potash producers, as they wishes to try a avoid further global food issues. So the main point being that this current KCl / potash price isnt just a
short term phenomenon caused by the war (this rings true, as KCl prices had already reached +US$800 pre war). So if true, we could find ourselves in this heighted price environment for a while.
There is a lot more in there. Would encourage everyone to have a listen. The company are very generous with the time they take to answer investor questions, and explain current developments.
GLTA