TSXV:AAA.P - Post by User
Comment by
FinalEpiphanyon Aug 23, 2013 12:36am
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Post# 21691708
RE:RE:This proves to me AAA has furthest to FALL yet
RE:RE:This proves to me AAA has furthest to FALL yet I disagree with your assessment on KRN as it has way more cash than all other junior potash players like AAA, WPX and EPO. In fact it has $56mm on the balance sheet which is just a little under the TOTAL of the other three which combine for $59mm. This means that KRN can last much longer than AAA, WPX and EPO and ride the storm out while others may face the dilemma of having to raise equity just to survive let alone for building their mines.
Also, KRN, WPX and EPO are in a much safer jurisdiction than AAA which is in Ethipoia and KRN has a strategic partner in Indian Gurujat which has vested interest to see the project succeed the same way that you can argue Ethiopian government has an interest to see AAA succeed. But mind you, it is Africa after all.
There are also other factors which vary between these potash juniors but AAA certainly does not stand out, other than perhaps its lower capex and operating costs if it ever goes into production, in any respect, especially given the low cash balance, ~$22mm, it has compared to KRN which has $56mm and with no debt.
Right now, forget about financing $600mm to $2 billion for construction, surivival is the priority and franky KRN has a much greater chance of survival with its stronger cash balance.