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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

Post by jonathanRdeCon Aug 03, 2013 11:56am
757 Views
Post# 21648380

Basic economics

Basic economics
Don't forget that for 100$ decline in the price of potash, a company like Uralkali will lose 1 billion in revenu...each year. It's not a viable solution for any public traded company...shareholders will not tolerate it for a long period.

Let's have a look at the potash industry. Vale is out of rio colorado and saskatchewan. That's a good sign for the potash cartels. Many juniors are now looking for partners and BHP is deciding if it's going ahead with Jansen... If you shake up the market at that precise time...you create a perfect storm. It will impact the faith of many juniors going out of business and the biggest potash mine will get cancelled. After that, the price can go up and years will pass until new projects get started again, get their papers straight, government approvals and financing.

Any juniors without a partner right now will face a lot of headwind in the coming months. Big corporations with money, banks and lenders will probably wait and see how the market will be when dust settles before comitting.

I don't believe it will impact much WPX because it has a partner and discussions have been ongoing for months now. You don't stop months and months of negociations for one comment. I could be wrong but I don't see any serious business cancelling for a short term feud...if there's actually a feud...
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