$80 Million Spent Delineating Martison Deposit Phoscan trades BELOW its cash value($66M) , the market values its phosphate project at
million. This is a project it has so far spent $80 million on. With all this global activity, it’s hard to imagine this large phosphate deposit is almost discounted to zero. To understand the value, visit the company’s website and view the Martison Project presentation.
Also note that Phoscan continues to look for an oil & gas project in hopes of putting this large war chest of cash to use - timing of this is unknown. The company highlighted this effort in the past.
I hope is that the phosphate project eventually attracts a buyer from Agrium or overseas. Even recovering 1/2 of its investment in the project would result in a sale of $40 million, or 23 cents per share (a 50% gain from current levels). Quite possibly someone would pay much more, but I think this is being realistic should a suitor emerge.
The stock is also starting ti show increased liquidity at current levels in recent sessions. Something I think is stirring !
Lets not Forget that China and India will become aggressive players in an effort to secure their own supplies. With more than two billion people, food will become priority one for these two countries and they will fall mercy to pricing set by the majors if they fail to secure their own supplies.
Such a scenario cannot help but benefit companies like Phoscan. The capital costs of developing a phosphate mine and processing plant are not small. But when global demand is growing substantially, it makes no sense to assume a large undeveloped phosphate deposit carries such little value.
Phoscan’s share price barely reflects its large cash reserves, let alone the potential value of its large undeveloped phosphate project.
FOS represent excellent, lower-risk value....with Tremendous Upside potential.