First Tidal Acquisition Corp T.AAA

RE: Market Price/Risk Exposure (Cote101)

[Karmanow]

We should remember that there are only 4 Potash Basins in the world. BHP has stated that they want to be big in at least 2 basins in the world....unlike retail investors, BHP has a 20 year horizon and have the time, patience and the money required to see the larger picture of the commodity super cycle we have entered.
We have had an ongoing relationship with BHP Geologists since we began drilling a year ago. We also know that shareholders of BHP would want a resource estimate and a bankable feasibility study done before they would want to be interested (Potash One had both resource estimate and feasibility study completed). We know that Stan Bharti (largerst single shareholder) stated that he thought Allana would be a prime take over target in 12 - 18 months from now...that was 12 months ago.
We know that BHP knows how much it costs to build a new mine in the world and what the supply and demand is going to be for the potash...they also know that a new mine can only get financing or approval with potash selling nearer $600 per tonne...if the cost to build and service the debt interest and principal is near $4 Billion Dollars for a greenfield...just common sense with financial sense. There is no free lunch....period....Since most potash producers are...publicly owned and traded, these barriers to entering the business are important as investment decisions tend to be based on economics

What we do know is that BHP made a low offer for Potash Corp. for $34 Billion Dollars and it was rejected.
We know that Potash Corp. produced 8 million tons of KCL in 2010. We know that 75% of revenue is from KCL, so if we take the $34 billion offer x 75% for the KCL. So $25 billion dollars of the offer was for the 8 million tons of KCL ( with very long mine life), or we can assume $3 Billion Dollars offered per annual million tonnes produced.  
When in full production 3 years from now, Allana can expect 2 million tonnes of KCL x $3 Billion Dollars = $6 Billion Dollars / 200 million shares = $30 per share take out price for AAA ...based on BHP bid calculation for Potash Corporations KCL assets.
This assumed completed NI Resource Estimate and completed Bankable Feasibility Study and completed Mine Construction and completed Offtake Agreements with no long term debts. I also assume we have acquired and drilled on either the Nova Land or the Samarian Land to expand our long term mine life.
So, if AAA will produce 2 million tonnes of KCL per year, and if we assume EPC complete a NI Resource Estimate and Bankable Feasibility Study and prove that they can produce 2 million tonnes of KCL as well.
Then BHP can own 75% of one of the 4 Basins in the world...:
4 million tonnes of KCL produces (AAA +EPC) x $3 Billion Dollars per tonne = $12 Billion Total Cost to BHP


Taken from the Potash Corp. of Sask. website:
New capacity requires significant capital investment and time

Entry into the potash business carries substantial risk because of the significant cost and time required to build new capacity. We estimate that upfront capital of CDN $4.1 billion would be needed inside the plant gate for a conventional 2-million-tonne greenfield mine in Saskatchewan. Developing the necessary infrastructure outside the plant gate and the potential purchase of a deposit could increase the total cost to more than CDN $6 billion. We believe it would take at least seven years from the start of development to achieve full operational capability, assuming no major permitting or construction difficulties. While earlier brownfield expansions have been completed in significantly less time and at lower per-tonne construction costs, we believe projects currently under construction are more complex and costly to complete, with some estimated to take seven years to achieve full operational capability.
Since most potash producers are publicly owned and traded, these barriers to entering the business are important as investment decisions tend to be based on economics.