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WESTERN POTASH CORP T.WPX

"Western Potash Corp is engaged in the acquisition, evaluation, and exploration of mineral properties containing potash in Western Canada. The Company holds interests in the Milestone Project located in Southern Saskatchewan."


TSX:WPX - Post by User

Comment by blackwood2002on Mar 29, 2014 5:40pm
443 Views
Post# 22386299

RE:Re, Re,Re,Re,Re: mineral rights

RE:Re, Re,Re,Re,Re: mineral rightsNorthmark, I would agree on valuation of roughly 450mm as Pot 1 was almost identical to milestone in most aspects. I would venture to guess that would be a floor price balpark given FS of WPX puts it as one of the cheapest if not the cheapest cost per ton to mine on the planet at around $67/t to mine. Potash corp is almost 2x that cost ! The best thing going for WPX is despite recent softening prices they can operate and be profitable even if potash dropped to $200/T . So if a supply war breaks out and prices drop most majors would be forced to cut capacity (as pot has done recently) otherwise they just hemmorage cash out the door. This is a huge + for prospective buyers of WPX. Rio would certantly benefit to buy us up and mothball there 405 until global demand caught up while in production in 2016 with milestone and making better margin than anyone else. Whoever the potential buyer or debt financier who comes in their risk is greatly diminished with payback at 5-8 yrs with pot prices 350-450 range. I would suspect WPX mgt is banking on the cometitive advantage of its cost structure, water rights, etc which no other brownfield JR can reasonably compete with in a safe juristiction. For that reason I believe the 450mm is a floor and any buyout would push that number higher. As you said, we have enough cash to ride it out for a few years so no hurry in taking a crapy offer and walk away. This is mgt's meal ticket and I'm sure they are not keen to make peanuts on their 7-9 years of work. They own 26% to cash in !! Not to walk away at some lowball offer. Hopefully we hear something sooner than later! GLTA
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