Topic: How To Invest

Please advise on Potash One.

Article Excerpt

Potash One, $2.33, symbol KCL on Toronto (Shares outstanding: 83.2 million; Market cap: $193.9 million), is focused on starting production at its 100%-owned Legacy potash project. Legacy is located 80 kilometres northwest of Regina. The company believes Legacy could hold as much as 1.1 billion tonnes of potash. The Legacy project is located next to Mosaic Co.’s (symbol MOS on New York) Belle Plaine potash “solution mine.” Belle Plaine is the world’s largest solution mine. Like Mosaic, Potash One plans to use solution mining to extract potash from Legacy. This process involves the use of water to dissolve a mineral (potash, in this case) into a solution. The solution is then pumped out of the deposit through vertical boreholes or abandoned underground mine workings. It is then crystallized and purified into the finished product. Solution mines are cheaper to build than conventional potash mines, mainly because they do not require a shaft. Still, if it goes ahead, the mine could cost more…