RE:RE:WHAT IS VERDE REALLY WORTH ? Hint - more than you think I was being generous for the non-potash assets. Mosaic paid $385 Million for 35% of Bayovar phosphate mine in Peru in 2010 (the good old days). The additional 40% of Bayovar it gets now from Vale is not worth much more today. They also get (maybe) the Rio Colorado potash project in Argentina (ha,ha, ha). In addition they get the Kronau potash project in Saskatchewan. But who needs another potash deposit in Sask ???
NOT INCLUDED in the price are the Cubatao nitrogen and phosphate assets in Brasil.
So basically the bulk of the money ( $1.5-$2 Billion ? ) went to pay for the remaining Brasil assets, and the Crown Jewel is the Taquari-Vassouras mine and Carnalita deposit.
Wouldn't you think that something like Verde would be at least equally valuable. And more so.
My valuation is not novel at all.
In the cartelized markets with few suppliers, it's market share that counts. Nothing else.
Unlike most metal mining, where miners are price takers, in the cartelized oligopolies the producers are price makers so every market share point is priced at a premium.
And they dread price wars because if you go after a 5% market share by underselling them by 10%, they are going to have to drop their price by 10% but ON THE REMAINING 95%.
And that hurts. Big time.
So, what price would they put on Verde ?
That price is only your floor, not Verde's full potential, and I will bet that it's certainly many multiples of the piddly market capitalization that Verde is trading at today.
It's just a shame that shareholders don't realise that.
For an interesting read about a cartel that happens to operate in Brasil please check this:
https://insight.kellogg.northwestern.edu/article/concrete_collusion