Encanto Potash Corp V.EPO.H

This may be why the stock jumped early today ...

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Chris Temple
Editor/Publisher

 

    
    Below is part of an e-mail I sent out early this morning to my Members.
 
     You may remember I urged people to buy this a few months ago, as I tagged it as my most likely "home run" stock for 2016.
 
     As my gift to you to get ahead of your "weekend reading" (and since my regular, paid Members have already had a chance to buy it at lower prices) I want to let YOU know now about Encanto.
 
     AND, Encanto is only one of several of my recommendations putting in performances like this already in 2016; for all of them, you can join me as a Member for as little as 26 cents/day.  BUT HURRY:  this special offer is closing soon!
 
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     I trust you saw (and profited from, if you took my table-pounding advice a short time back!) that Encanto Potash DOUBLED yesterday. 
 
     The reason was news the company put out after the markets closed Wednesday afternoon; you can read that HERE.
 
     The headline is that Encanto and Metals and Minerals Trading Company of India (MMTC)--that country's largest trading company, and apparently the vehicle through which the government wants this offtake agreement to be managed--have "expanded" the Memorandum of Understanding announced last October. 
 
     First off, there is now a hard and fast minimum amount of potash that MMTC says it will purchase:  2 million metric tons/year. That's some US$600 million in annualized revenue at current prices, folks, for a company with a market cap of under US$40 million, even after yesterday's surge!  
 
     Second, as yesterday's press release states, "In addition, the MOU provides that MMTC will also act as Encanto's worldwide distributor of potash on an exclusive basis, which is expected to provide access to markets and increased pricing well beyond the primary market in India."
 
     So--though the presently-discussed figure of 2 million tonnes/year is ostensibly for India's own needs--MMTC is essentially saying that it will procure and sell ALL that Encanto can produce.
 
     Now, yesterday's enhanced MOU is NOT yet a signed, sealed and delivered offtake agreement or financing deal. That is still to come; and I have no doubt that it will, even if it may remain a bit exasperating to get three governments all on board and ready to act at the same time.  But I still expect to see this deal get launched at some point soon with a lot of fanfare.  Just as former Canadian P.M. Harper was able to get a nice photo op and deservedly thump his chest when India entered a deal for long-term Canadian uranium supplies, I expect to see P.M. Trudeau, along with leaders of the Muskowekwan First Nations and, likely, a delegation from India, formally kick this deal off.
 
     While I don't yet see this new announcement on MMTC's web site, the original one from last October--featuring a photo with Encanto's President Stavros Daskos and others at the ceremony--can be viewed HERE
 
     I visited late yesterday with Encanto and will be doing so again at the beginning of the week. I'll, of course, let you know what if anything I learn to add some "meat" to the above.
 
     For present purposes, Encanto remains a "BUY" -- and I do NOT advocate that you take any of these profits at this time. As I point out above, the company isn't priced in the market at anywhere near what it likely will be once everyone wakes up or otherwise discovers this story and understands that Encanto is about to become a MAJOR new global potash producer. And that latter point needs to be understood: though obviously a few people HAVE woken up, as evidenced by the ENORMOUS volume yesterday in Encanto, it's a story that is still relatively unknown. 
 
     That will be changing.
 
     So unless you put a TON of money into this and have an absurdly outsized position that is not good to do with any one company, sit tight and enjoy this story as it evolves. . .