Post by
mike270 on Apr 12, 2014 11:27am
Branson Hamilton about EPM and Compares to World Mines
Seeking Alpha Home | My Portfolio | Breaking News | Latest Articles | StockTalk | ALERTS | PRO Sign in / Join Now Branson Hamilton Branson Hamilton picture Branson Hamilton Articles (4) Instablog (1) Comments (30) Profile 18 Followers 8 Following Follow Send Message View as an RSS Feed View Branson Hamilton's Comments BY TICKER: PGRX Latest | Highest rated Drooping Crops Drive Corn And Fertilizer Stock Prices Higher [View article] For you newbees - remember that N, P and K cannot replace each other. Plants need all of these and other minerals. N these days is supplied from chemical plants, P & K come out of the ground. Jun 20 09:30 PM | 0 Likes Like |Link to Comment Corn Acreage At 96 Million Acres: Spotting The Winners [View article] In addition to the suppliers to the corn farmers noted above, there are the suppliers of fertilizers who should also benefit. The usual suspects are Potash (POT), Mosaic (MOS) and Agrium (AGU). Each has their specialty in nitrogen, phosphate and potash. Incidentally, the potash used on corn is KCl, also called MOP. There is a specialty potash K2SO4, also called SOP that is an important source for specialty crops like fruit, vegetables, grapes and other high-value food crops. The prices for these crops have also increased. There are two domestic U.S. suppliers to consider, one is Compass Minerals (CMP) and the other is an early-stage pure play on SOP with resource in Utah - EPM Mining Ventures (EPK,V). Apr 21 08:40 PM | 0 Likes Like |Link to Comment Has The Solar Market Turned The Corner? [View article] The many thoughts and hurls above only serve to confuse the issues with Solar. Here are some realities as I have learned them. In light of item #5 below (government incentives) I can only see investing in solar where the economics are clearly positive. I am steering away from solar equipment because of the obvious over-supply. I'd consider solid construction or operating companies in countries with high-cost electric output (primarily oil fuel) closer to the Equator with above average sunny days. Otherwise, too much risk. 1) With solar panel prices declining they are now not the driver of the cost of deployment, but instead, the land and construction are the primary cost factors. These have not come down in price. 2) If we're talking a utility-size array then grid costs matter, if we're talking augmentation by private party (home or business) they don't. 3) Local electric rates matter. In much of the U.S. mainland electric prices at wholesale are sub-7 cents/kwh where in many parts of the world wholesale "grid" prices are north of 12 cents up to the mid-20's. Where would you rather build your facility? 4) Not only does one need to consider latitude and weather to determine the actual output, one needs to factor reduction in output due to age and also soot accumulation (when was the last time you saw someone taking a scrub brush to their panels). Oh, and don't forget to factor maintenance for mold build-up, etc. You mean that the contractor didn't tell you about this? My solar installation colleagues tell me that the systems lose at least 15% from dirt and mold. Put that into your economic model. 5) Growth of solar has been driven by government-provided incentives, and as governments are less able to provide those incentives, the solar industry will suffer. We are already seeing this as state and federal rebates have stopped, so have installations. 6) In the U.S. mainland the payback is positive, but far enough out that without the rebates a business can certainly find other investments with better payback. There are many other places where the economics are better. Feb 17 02:56 PM | 0 Likes Like |Link to Comment Analyst Jaret Anderson On What's Next for Potash Producers [View article] Jaret, Another junior worth checking out is EPM Mining Ventures (EPK.V) with large resource in Utah, USA. Management expects 43-101 in 2Q12 to be consistent with 30 year ago 700 drill program that describes the resource. They will use solar evaporation. Recent analyst report projects strong upside within 12 months. Unlike Verde, EPM is not proposing untried technology and unlike the African ventures noted, EPM does not have transportation issues (near the Union Pacific mainline). Transportation costs to Brazil are lower than from Canada and Middle-East. Worth checking out. Feb 15 08:31 PM | 0 Likes Like |Link to Comment 4 'Must-Own' Fertilizer Stocks Poised For Gains In 2012 [View article] Thanks for the update on these companies. Fertilizer stocks certainly have been appearing a bit disconnected to their fundamentals recently; earnings are quite strong and going forward demand is only going to increase. Besides these large companies, have you considered some junior suppliers? I’ve been looking primarily at Potash because of the three primary nutrients (Nitrogen, Phosphate and Potash) this one seems to have a more contained global supply. Besides (POT), I am finding EPM Mining Ventures (EPK.V), a potash junior with its resource in Utah, USA to be compelling for four reasons. First, the market for fertilizer stocks is turning back up. Second, EPM just announced that they are 65% complete in their drilling program to support their NI 43-101 resource report which they say will be available in the 2nd quarter, and the new data is consistent with the 700 drill hole program performed 30 years ago that confirmed a large resource. Third, EPM has Potassium Sulfate, a premium form of potash that does not compete directly with the Canadian Potassium Chloride, and in fact garners a premium price. And fourth, Analysts are projecting nearly a 4x increase in EPM’s price this year. So, I’m playing the fertilizer industry with a large company (POT) in the commodity potash space and a growth company (EPK) in the premium potash space. Feb 9 10:33 PM | 0 Likes Like |Link to Comment The State Of Agricultural Commodities [View article] Thank you for the terrific summary of an important challenge of feeding the growing global growing population from the limited acreage of land that is blessed with the right mix of soil, temperature, water and sunlight. I agree with the post above – of the three primary nutrients that are replaced by fertilization, potash is the most limited in supply. But, the potash situation is challenged even more than was noted above. You see, potash isn’t potash – there are actually two main classes of chemical compounds that are called “potash”. Potassium Chloride, also called marinate of potash (MOP for short) is the form mined from thousands of feet below the surface in Canada, Belarus, Germany and Russia. This is the product of Potash Corp of Saskatchewan (POT), Mosaic (MOS), and Agrium (AGU). MOP is used on bulk crops like corn, beans, and wheat and thus is important for producing calorie crops and animal feed. But what hasn’t been noted above is that the chloride ion in MOP actually can harm many high-value tree crops, tea, potatoes, vegetables, tobacco and turf grass. There is another form of potash, potassium sulfate, or sulfate of potash (SOP for short), that provides the critical fertilization for these high-value crops. Here’s the challenge – production of natural SOP is very limited. Natural SOP is produced by Great Salt Lake Minerals, a subsidiary of Compass Minerals (CMP) in the United States and by Luopbupo in China. Chemical and Mining Company of Chile (SQM) also produces potash without the chloride ion. All of these use solar evaporation ponds to concentrate the Potash from brines of ancient lakebeds. This natural SOP is considered acceptable for organic farming. SOP is also produced by chemically converting MOP to SOP – an industrial chemical process not without additional cost. Additional supply is expected from a potash-junior, EPM Mining Ventures (EPK.V), that controls over 120,000 acres on the Sevier Lake in central Utah in the United States. EPM is readying its NI 43-101 resource report which, according to analyst who track this company, is expected to validate the results of the 700 hole drilling program of 30 years ago which indicated a large resource of SOP. Even so, when EPM comes on line it will only forestall the impending supply challenge of SOP. If one is looking to invest in the SOP market, CMP or SQM are options, however, the stock with the biggest upside opportunity is definitely EPK. Feb 6 10:40 PM | 4 Likes Like |Link to Comment Potash's Current Calm Promises Exciting Future: Corey Dias [View article] Thanks for the perspective on Potash, and on some Potash Juniors. I’d appreciate your take on another potash junior – one with assets in central Utah: EPM Mining Ventures (EPK.V). I discovered them a while back and I don’t see much written about them. They seem to have a lot of plusses: EPM is preparing to produce SOP and will be one of only a few suppliers of natural SOP in the World. They control over 120,000 acres of brine lakebed and will use low-cost solar evaporation, so their operating margins should be quite strong. Their latest press release states that they are 65% complete in their drilling program and expect their NI 43-101 and Feasibility Study to be complete in a few months. What is compelling to me is that there was a 700 hole drilling program completed on the lakebed 30 years ago confirming a large resource of SOP and other valuable minerals. Two recent analyst reports project the stock price to nearly quadruple this year. That would be an echo of the Potash One investor’s story. This one seems to be a safer and more profitable play than some of the others in far-off places with much higher regional risks. And, it doesn’t compete with the big Canadian or European marketing consortiums. Have you looked into EPK? Jan 29 10:50 PM | 0 Likes Like |Link to Comment A Simple Formula For The Fair Price Of Gold [View article] I appreciate the comment by TheKing3456 suggesting that many gold "investors" are not measuring the value of their gold as an investment but as a replacement for cash in the bank. Yes, there is a cost to cash in the bank at essentially zero percent interest vs. inflation and dollar devaluation, but there is a cost of gold in the rather substantial fees for buying and selling physical gold. On a net basis, I wonder how many months or years it takes for gold to rise enough to cover the transaction costs vs. money in the bank at zero interest? If the hold time is measured in many months, then the measure of cash should be CD's or bonds of equal duration. And, has there been a decent comparison of gold sources for the retail investor with respect to transaction costs of both the buy and the sell? That could make me a stronger believer in the usefulness of gold as a replacement for cash if I could be assured of future buyer who won't be extracting too large a commission. Any references, please? Jan 2 05:24 PM | 1 Like Like |Link to Comment A Look At Analyst Ratings [View article] Interesting observations, and thanks for the perspective. The tables show past results of the stocks along with the current ratings. It would be very interesting to see past results along side past ratings - to see the correlation or lack thereof. Dec 17 03:55 PM | 0 Likes Like |Link to Comment Chart of the Day: The Great Earnings-Yield Divergence [View article] The Graph shows a fairly significant trajectory change for the last decade, only for stock yields, not so for bond yields. The question then might be,"what macro change has occurred to the corporate environment to drive this?" One that I have not seen discussed is impact of globalization in bringing an expanded base of profit generation. Might it be that the larger share of profits coming from off-shore compared to the much more domestic nature of businesses in prior periods is increasing yields? Aug 13 10:02 PM | 2 Likes Like |Link to Comment Is It Time to Invest in Lithium? [View article] Tangible evidence that investment in Spodumene extraction is resulting in increased production (Reed and Galaxy as examples) bodes well for customers of Lithium raw material. So does the production of Lithium Carbonate from Spodumene as a viable economic substitute source to the brine production of Lithium Carbonate. On the other hand, the recent statements indicating that the potentially large brine resource sites in China may not be as viable as proposed a year or two ago raises questions about how China will execute its strategy to be the primary producer of electrodes and batteries. Perhaps China sees that the best opportunity for control is to focus on product production while leveraging take-off agreements with primary miners in Australia and elsewhere. The real question is: As china ties up resource production, where does this leave the rest of the World? What will be the residual mine output available to other producers of Lithium-based products? Feb 22 10:31 AM | 0 Likes Like |Link to Comment Is It Time to Invest in Lithium? [View article] Good catch, David F. Yes, SQM is producing in Chile and FMC in Argentina. One salar (lake) in Bolivia has large resources not yet developed. Other than this incorrect fact, I take exception to the statement that there is a large number of errors. There are differing professional opinions regarding the producible reserves that the primary global resources contain, and I present some of these. That there is no consensus is an essential element of the challenge of forecasting the future state of supply vs. demand. Mr. Evan's comment about errors, followed by his professional opinion listing resource sizes does not constitute evidence of incorrectness in the article - instead, he is presenting one view. Note the comment by SparkySLS where we see the impact of price divergence on investment. Production of Lithium Carbonate from Spodumene has reasonable potential to balance the potential supply shortage. While this possibility has been mentioned in reports, Galaxy's production is solid proof of an additional "new" resource for Lithium Carbonate. Dec 30 08:48 AM | 0 Likes Like |Link to Comment Is It Time to Invest in Lithium? [View article] Mr. Evans. I appreciate your response, as you evidence the challenge in this market. There are widely different estimates of both reserves and resources for Lithium as was mentioned in the article, yours being one of them. Also, as was discussed, the amount of Lithium mineral available is not at question; Lithium is one of the most common minerals on Earth. The question is about the capability to extract and process it from any source at an economical cost. And, this capability extends beyond the chemical and engineering challenges of the extraction alone. It includes financing, production, transportation, political and criminal climate, takeoff agreements that limit availability to some, etc. So, a discussion of resources is important but not sufficient. Thanks. Dec 10 09:47 AM | 0 Likes Like |Link to Comment Is It Time to Invest in Lithium? [View article] Yes, Australia is blessed with resources containing Lithium. Both Talison and Galaxy derive the Lithium from hard rock mining. These mines are the primary sources of Lithium used for industrial applications including glass, ceramics and aluminum production. Talison is currently converting some lithium from its rock resources into Lithium Carbonate, and, as the comment above notes, the Chinese are converting rock-sourced lithium to Lithium Carbonate as well. The vast majority of Lithium Carbonate used for battery production is derived from the brines in South America. The brine process is the lowest cost method of deriving Lithium Carbonate. Thus, pricing is a critical component of increasing supply via other sources. Dec 7 09:05 AM | 0 Likes Like |Link to Comment Taking Stock of Phosphorus and Biofuels [View article] Thank you for the comprehensive discussion. Excellent. There seem to be similar potantial supply/demand and geopolitical issues for P as there are for K, however they don't seem to be as urgent. Branson H Jan 16 10:22 AM | 1 Like Like |Link to Comment Previous Page 1 2 COMMENTS STATS 30 Comments 10 Likes TOP AUTHORS: The Opinion Leaders TOP USERS: StockTalkers | Instablogs Mobile Apps | RSS Feeds | Sitemap | About Us | Contact Us Terms of Use | Privacy | Xignite quote data | © 2014 Seeking Alpha