This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Karnalyte Deal Shines Light On Potash Juniors

Karnalyte Deal Shines Light on Potash Juniors

The deal struck between Alberta's Karnalyte Resources (TSX:KRN) and India's Gujarat State Fertilizers & Chemicals (BSE:500690) has cast light on the ability of junior potash plays to fill Asian consumers' demand for potash fertilizers .

Karnalyte, based south of Calgary, Alberta, with carnallite deposits in the heart of Saskatchewan's potash basin, signed a deal that will see it receive upwards of $60 million from Gujarat. Gujarat has also made a 20-year commitment to purchase 350,000 tonnes of potash at market price from Karnalyte; that amount will increase to 600,000 tonnes per year in the second phase of the deal, the company said in a statement.

Karnalyte's website states that the company expects to start construction on its Wynyard carnallite potash project late in the first quarter of 2013 — or early in the second — and plans to spend $626 million on the first phase of development. That should see it produce 625,000 tonnes of potash annually, with that amount later increasing to 2.125 million tonnes per year.

On the heels of Karnalyte's announcement, Reuters reported that Saskatchewan-based Encanto Potash (TSXV:EPO) is in talks with an Indian fertilizer company, Rashtriya Chemicals and Fertilizers (BSE:524230), which, if successful, could see Rashtriya buy up to 2 million tonnes of potash from Encanto.

Potash juniors in spotlight

The recent attention given to junior potash projects by major emerging market players began in earnest last year, with Arizona-based Prospect Global Resources (NASDAQ:PGRX) inking a 10-year potash supply deal with Chinese fertilizer company Sichuan Chemical Industry Holding Group. Prospect also received a $100-million investment from Apollo Global Management, and along with Encanto and Karnalyte, holds one of the few projects with a completed or near-completed feasibility study.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.40 -0.91%
FB $118.98 0.99%
GOOG $707.86 0.92%
TSLA $215.46 1.90%
YHOO $36.95 0.03%


Chart of I:DJI
DOW 17,662.73 +2.02 0.01%
S&P 500 2,044.73 -5.90 -0.29%
NASDAQ 4,695.2610 -21.8330 -0.46%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs