Encanto Potash Corp V.EPO.H

down she goes in a down market over a long summer

[jerrythejuicer]

companies will be taking a long, hard look at the economic viabilitybefore committing to a new development. A greenfield potash operationcosts billions of dollars, would take at least five to seven years togenerate the first cash flows, and even longer to ramp up to fullcapacity. And that assumes you have a good deposit with a high degree ofsecurity from water inflows that are an inherent and uninsurable hazardin this business.In a tight credit market, companies will want to be confident in thelong-term pricing and demand outlook before committing that muchcapital. Beyond these factors are qualitative issues like access toexperienced people, an uncertainty in the world's economic and politicalsituation. A greenfield mine can be a gamble, one that is likely totake a decade before it can show a return. While potash prices haverisen in recent years,  they still are not close to sufficientlevels to justify a new greenfield project.