WESTERN POTASH CORP T.WPX

cash costs

[materialsgirl]

A major cost for solution mining is energy.   Natural gas prices are now much lower than the official calculations and I suspect that cash costs would now be only about $50 a ton at today's natural gas prices.

This will be a dream business when it ramps up to full production in 7 or 8 years.  Cash flow after royalties but before corp tax should be nearly $300 a ton (at current potash prices) or roughly $0.8 billion per year.

The impending glut of potash in the next decade is being whittled away by numerous mine delays (2 major ones by Vale alone).  Potash prices FOB Vancouver will likely stay in the $400 to $500 range over the next decades.  The cartels will likely succeed in keeping the prices there

[Treadnimbly]

It's a pity they could not utilise the gas pocket they ran into drilling on the property. GLTA.

[Cacheitup]

Wpx's opex costs (including "sustaining capex")are $108 per ton plus transport at $60 per ton,. There is no way at current potash prices, that after royalties are taken In to account, that they will have $300 in free cash flow. its pie in the sky.   Interest costs will add around $120 per ton in costs as well. potash price $400  - $108(opex) -$60 (transport) - $70

[desertwolfsz]

Never seen such a stu..id calculation, seems it is made by a kid>

[Cacheitup]

  Dessertwolffz- Perhalps you would like to debate these costs with me.   I went back and checked the feasibility study from January and the only figure that I may have been off by is the royalty one. I think $30-40 would be more reasonable for sask and crown royalties.   The rest are right there in the feasibility study(which I hope you have read) for you to see.   Seeing as