American Potash Companies Looking To Capitalize On Fertilizer Demand [View article]
Here's an excellent summary of Passport's PEA press release from this morning. Click on this link to a 4 minute video clip of Chairman of Passport, David Salisbury. This video is from earlier today...
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
Here's an excellent summary of Passport's PEA press release from this morning. Click on this link to a 4 minute video clip of Chairman of Passport, David Salisbury. This video is from earlier today.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
By way of comparison, consider Saskatchewan junior potash player Karnalyte Resources, (KRN.TO). This company is a year ahead of Passport as it expects to be in production in 2015.
Karnalyte's project has a 60-yr mine life, a $480/tonne long-term pricing assumption and utilizes a 10% discount factor. Yet its after-tax NPV is $1.7 billion vs. Passport's at $2.2 billion, [NPV(12%)]. And Passport's IRR is 27.1% vs Karnalyte's at 21.1%.
Karnalyte is a good comp to use because an Indian group just acquired 20% of that company for $45 million, implying a valuation of $225 million. This happened in January, 2013. Karnalyte received an off-take agreement along with its acquired equity stake.
$225 million divided by $1.7b NPV(10%) = 13%. The Indian group paid 13% of Karnalyte's PEA NPV(10%) for a 20% stake. If an Indian group were to pay the same 13% of Passport's PEA NPV(12%) for a 20% stake of Passport, that would equal $286 million.
Since Passport is a year behind Karnalyte, it may not currently be worth $286 million, but if it's worth that amount in a year, that would approach a $1 per fully diluted Passport share.
It should be noted that Karnalyte is a proposed solution mining operation and Passport Potash a conventional, plain vanilla underground mining operation.
Passport's Arizona location will give it a huge location advantage to the U.S. agricultural markets and also South America, (Brazil / Argentina) vs. Saskatchewan, Canada.
Importantly, Passport Potash is poised to benefit as much or more than any other natural resource producer from the opening of a third shipping lane in the Panama Canal in 2015. This will give Passport a leg up on shipping tonnes through the Gulf of Mexico, through the Panama canal, into Asia.
The potential savings in time and money could be very substantial. For example, it could shave a week or more off the typical shipping time through California.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
WOW!
These are great numbers. Passport's PEA points to a 27.1% after-tax IRR with a conservative 12% discount factor, 26-yr mine life and $430 per metric tonne long-term price assumption.
Peer junior potash PEAs use 10% discount factors, longer mine-life assumptions and potash prices of $480-$500.
This is a strong, relatively conservative PEA. $1.95 billion of cap-ex to generate 2.5 million metric tonnes per year of MOP (once fully ramped up). That implies capital intensity of $778 per thousand tonnes of potash. This is really good. Great job Passport management team!
$1 Trillion Of Potash: The Race For Arizona's Holbrook Basin [View article]
Press Release on 5am, March 13, 2013....
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
Legendary Investor Jeremy Grantham Has Identified A Quasi-Monopoly - I'd Like To Profit From It [View article]
Press Release from 5:00 am, March 13, 2013...
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
American Potash Companies Looking To Capitalize On Fertilizer Demand [View article]
Press Release from 5:00 am EST, March 13th
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
sorry, wrong thread.
I would be a seller of some, not all, of my Passport Potash shares at 40 cents per share. If the shares get there in the next 3-6 months. After six months, I would hold out for a higher price.
The properties owned by Bullfrog Gold, (BFGC) and Pershing Gold, (PGLC) are far apart. No sharing of facilities is possible. Mines that are closer will always have an economic advantage over Bullfrog to use Pershing's excess processing capacity.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
At 25 cents, the market cap is still just $45 million. For a PEA stage company, Passport is still cheap after rallying 25% from my the date of my article on November 7th.
With the recent demise of PRGX, there's no doubt that Passport is the winner in the Holbrook basin. Passport should receive a lot more interest from strategic investors in India and China, not to mention Rio, Vale and BHP.
The company's PEA is due out any day now. That should be a good read. I'm hoping that the cap-ex intensity, (cap-ex divided by tons of annual production) comes in below $850 per ton...Industry costs have risen since Prospect Global's puff piece of a PEA in October, 2011. Prospect used a 10% disc factor, 40 year mine life and $496 assumed potash price. I'm curious to see what Passport comes out with.
Pershing Gold - Is It Too Early To Begin The Countdown To First Production? [View article]
According to a recent study, more than 600 mining mining juniors in Canada do not have enough working capital to keep them running through the next 12 months. Using research compiled from John Kaiser, 675 listed-companies out of 1,804 have $200,000 or less in working capital.
This report remind us that it is expensive to keep a mining company listed as the many banking, regulatory, legal and overhead expenses are not going away. All the while, there will be little to no money for any sort of drilling, the one productive aspect of running a junior.
A key takeaway is that juniors with access to growth capital and the ability to make acquisitions of distressed assets are in the driver's seat. At PDAC, Toronto I ran into Barry Honig, a successful investor in small cap companies including Pershing Gold, (PGLC), Passport Potash, (PPI.TO, PPRTF), Bullfrog Gold, (BFGC), Valor Gold, (VGLD), and Energy Fuels, (EFR.TO, EFRFF). We walked through the hundreds of exhibits and compared notes.
In looking at dozens of gold companies at the conference, almost all were high risk due to location, (Africa, Bolivia, Central Asia, etc), under-capitalized through first production, not in first production for 3 or more years, surprisingly high cost projections, (some projects require $1,800 + long-term gold to thrive) and facing tremendous infrastructure challenges. For example, in some frontier countries, rail lines several hundred kms long need to be built and power, labor and water are open questions in many cases.
The conference reinforced our belief that several lower risk North American developers have similar blue-sky upside potential with substantially less downside. For example, Pershing Gold is re-opening a past producing gold mine in Nevada. The pits are already there and Pershing owns a fully-built and permitted processing facility. Located about a mile south of mid-tier producer Coeur d'Alene, (CDE), Pershing appears to have strategic value to a number of larger companies with operations in Nevada.
Pershing will achieve first production next year, ramping up to 50k ounces of gold in 2015. The Company should be able to double production within 2 years of reaching 50k ounces. All of this from just 3% of Pershing's 39 square miles of consolidated acreage. Self-funded exploration potential is huge. Modest funding is required through first production of gold next year. This development story is substantially de-risked compared to most of the stories we saw at PDAC.
Best of all, Pershing has multiple options to raise the capital it needs. A debt facility, a royalty deal and equity are being considered as part of an overall financing package. Demonstrated success at raising capital offers a strong signal that Pershing is in excellent shape. Coeur d'Alene made a strategic investment in Pershing Gold last year as did Barry Honig and billionaire value investor Dr. Philip Frost.
Not all junior gold plays carry outsized risks. PershingGold is one example of a company with quite reasonable risks.
Exclusive Interview With Pershing Gold's Stephen Alfers [View article]
According to a recent study, more than 600 mining mining juniors in Canada do not have enough working capital to keep them running through the next 12 months. Using research compiled from John Kaiser, the PDAC found that 675 listed-companies out of 1,804 have $200,000 or less in working capital.
This report remind us that it is expensive to keep a mining company listed as the many banking, regulatory, legal and overhead expenses are not going away. All the while, there will be little to no money for any sort of drilling, the one productive aspect of running a junior.
A key takeaway is that juniors with access to capital and the ability to make acquisitions of distressed assets are in the driver's seat. At PDAC, Toronto I ran into Barry Honig, a successful investor in small cap companies including Pershing Gold, (PGLC), Passport Potash, (PPI.TO, PPRTF), Bullfrog Gold, (BFGC), Valor Gold, (VGLD), and Energy Fuels, (EFR.TO, EFRFF). We walked through the hundreds of exhibits and compared notes.
In looking at dozens of gold companies at the conference, almost all were high risk due to location, (Africa, Bolivia, Central Asia, etc), under-capitalized through first production, not in first production for 3 or more years, surprisingly high cost projections, (some projects require $1,800 + long-term gold to thrive) and facing tremendous infrastructure challenges. For example, in some frontier countries, rail lines several hundred kms long need to be built and power, labor and water are open questions in many cases.
The conference reinforced our belief that several lower risk North American developers have similar blue-sky upside potential with substantially less downside. For example, Pershing Gold is re-opening a past producing gold mine in Nevada. The pits are already there and Pershing owns a fully-built and permitted processing facility. Located about a mile south of mid-tier producer Coeur d'Alene, (CDE), Pershing appears to have strategic value to a number of larger companies with operations in Nevada.
Pershing will achieve first production next year, ramping up to 50k ounces of gold in 2015. The Company should be able to double production within 2 years of reaching 50k ounces. All of this from just 3% of Pershing's 39 square miles of consolidated acreage. Self-funded exploration potential is huge. Modest funding is required through first production of gold next year. This development story is substantially de-risked compared to most of the stories we saw at PDAC.
Best of all, Pershing has multiple options to raise the capital it needs. A debt facility, a royalty deal and equity are being considered as part of an overall financing package. Demonstrated success at raising capital offers a strong signal that Pershing is in excellent shape. Coeur d'Alene made a strategic investment in Pershing Gold last year as did Barry Honig and billionaire value investor Dr. Philip Frost.
Not all junior gold plays carry outsized risks. Pershing Gold is one example of a company with quite reasonable risks.
American Potash Companies Looking To Capitalize On Fertilizer Demand [View article]
http://bit.ly/ZMaxPy
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
http://bit.ly/ZMaxPy
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
Karnalyte's project has a 60-yr mine life, a $480/tonne long-term pricing assumption and utilizes a 10% discount factor. Yet its after-tax NPV is $1.7 billion vs. Passport's at $2.2 billion, [NPV(12%)]. And Passport's IRR is 27.1% vs Karnalyte's at 21.1%.
Karnalyte is a good comp to use because an Indian group just acquired 20% of that company for $45 million, implying a valuation of $225 million. This happened in January, 2013. Karnalyte received an off-take agreement along with its acquired equity stake.
$225 million divided by $1.7b NPV(10%) = 13%. The Indian group paid 13% of Karnalyte's PEA NPV(10%) for a 20% stake. If an Indian group were to pay the same 13% of Passport's PEA NPV(12%) for a 20% stake of Passport, that would equal $286 million.
Since Passport is a year behind Karnalyte, it may not currently be worth $286 million, but if it's worth that amount in a year, that would approach a $1 per fully diluted Passport share.
It should be noted that Karnalyte is a proposed solution mining operation and Passport Potash a conventional, plain vanilla underground mining operation.
Passport's Arizona location will give it a huge location advantage to the U.S. agricultural markets and also South America, (Brazil / Argentina) vs. Saskatchewan, Canada.
Importantly, Passport Potash is poised to benefit as much or more than any other natural resource producer from the opening of a third shipping lane in the Panama Canal in 2015. This will give Passport a leg up on shipping tonnes through the Gulf of Mexico, through the Panama canal, into Asia.
The potential savings in time and money could be very substantial. For example, it could shave a week or more off the typical shipping time through California.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
These are great numbers. Passport's PEA points to a 27.1% after-tax IRR with a conservative 12% discount factor, 26-yr mine life and $430 per metric tonne long-term price assumption.
Peer junior potash PEAs use 10% discount factors, longer mine-life assumptions and potash prices of $480-$500.
This is a strong, relatively conservative PEA. $1.95 billion of cap-ex to generate 2.5 million metric tonnes per year of MOP (once fully ramped up). That implies capital intensity of $778 per thousand tonnes of potash. This is really good. Great job Passport management team!
$1 Trillion Of Potash: The Race For Arizona's Holbrook Basin [View article]
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
363.17 MT
Average Indicated KCl Grade
14.68%
KEY MINING PRODUCTION HIGHLIGHTS
Annual Production (60% minimum K2O)
2.5 MT MOP
Life of Mine
26 years
Mining Method
Conventional Underground
Room & Pillar
Processing method
Hot Leach
Plant Recovery Rate (KCl)
89.8%
Estimated Employees (Mining, Production, Management)
1,770
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
Legendary Investor Jeremy Grantham Has Identified A Quasi-Monopoly - I'd Like To Profit From It [View article]
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
363.17 MT
Average Indicated KCl Grade
14.68%
KEY MINING PRODUCTION HIGHLIGHTS
Annual Production (60% minimum K2O)
2.5 MT MOP
Life of Mine
26 years
Mining Method
Conventional Underground
Room & Pillar
Processing method
Hot Leach
Plant Recovery Rate (KCl)
89.8%
Estimated Employees (Mining, Production, Management)
1,770
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
American Potash Companies Looking To Capitalize On Fertilizer Demand [View article]
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Mar 13, 2013) - Passport Potash Inc. (TSX VENTURE:PPI)(PPRTF) ("Passport" or the "Company") is pleased to announce the receipt of a positive preliminary economic assessment on its Holbrook Basin potash project (the "PEA"), prepared in accordance with National Instrument 43-101 standards of disclosure for mineral properties. The independent PEA was prepared by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN"), a consulting and engineering firm, specialized in the potash and salt industry, headquartered in Erfurt, Germany. The key findings of the report include the following:
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
363.17 MT
Average Indicated KCl Grade
14.68%
KEY MINING PRODUCTION HIGHLIGHTS
Annual Production (60% minimum K2O)
2.5 MT MOP
Life of Mine
26 years
Mining Method
Conventional Underground
Room & Pillar
Processing method
Hot Leach
Plant Recovery Rate (KCl)
89.8%
Estimated Employees (Mining, Production, Management)
1,770
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
KEY FINANCIAL HIGHLIGHTS
Pre-tax NPV@12%
$3.25 billion USD
Pre-tax IRR (30% income tax rate)
31.59%
After-tax NPV@12%
$2.19 billion USD
After-tax IRR (30% income tax rate)
27.08%
Estimated Total Capital Expenditures
$1.949 billion USD
Estimated Total Operating Expenditures (includes sustaining OPEX)
$114/tonne KCl USD
Payback Period (from start of production)
8 years
ASSUMPTIONS
Discount Rate for Project Related Risks
12%
Potash Price for 2013 (standard MOP)
$430/tonne USD
Accuracy
+/-35%
KEY RESOURCE HIGHLIGHTS*
Measured Mineral Resources (including Passport and Hopi properties)
34.77 MT
Average Measured KCl Grade
14.38%
Indicated Mineral Resources (including Passport and Hopi properties)
363.17 MT
Average Indicated KCl Grade
14.68%
KEY MINING PRODUCTION HIGHLIGHTS
Annual Production (60% minimum K2O)
2.5 MT MOP
Life of Mine
26 years
Mining Method
Conventional Underground
Room & Pillar
Processing method
Hot Leach
Plant Recovery Rate (KCl)
89.8%
Estimated Employees (Mining, Production, Management)
1,770
* Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Passport''s President and CEO Joshua Bleak commented, "We are extraordinarily pleased with this robust report for our Holbrook Basin potash project. We feel that the strong fundamentals of this report validate everything we have believed about this project, and are confident that the strength of this report will allow us to gain traction, even in the face of a moribund resource market.
The CAPEX of US$1.95 billion for a 2.5 MTPA mine makes this one of the best values in the potash industry. A good metric for judging the value of a potash project is the CAPEX cost per tonne of finished production. Using this metric, the Holbrook project is one of the lowest cost projects of all the greenfield potash projects currently being developed. When you couple these factors with the estimated OPEX of US$114/tonne, the Holbrook project has potential to be one of the highest return potash projects in the world.
Based upon the recommendation of ERCOSPLAN we will move forward with our Pre-feasibility Study which we plan to release at the end of 2013, and our Feasibility Study which we plan to release at the end of 2014. We are excited to take this report to the strategic partners with whom we have had discussions over the past year, and be able to show them the value that is in this project."
About the Holbrook Potash Project
Passport Potash Inc. is a publicly traded corporation engaged in the exploration and development of advanced potash properties with its major focus on a previously explored potash property in Arizona. Passport has acquired a strategic position in the Holbrook Basin with land holdings encompassing over 121,000 acres.
Passport has entered into a joint exploration agreement with the Hopi Tribe to work towards developing about 13,000 acres of contiguous privately held Hopi land.
Exclusive Interview With Pershing Gold's Stephen Alfers [View article]
A question was asked, at what price am I seller of Pershing?
It all depends on the price of gold. At $1,600 per ounce I might sell some, (not all) of my PGLC shares at $0.75.
But, I'm bullish on gold in the medium-to-long-term, so I'm in no rush to sell any gold shares. That's why I also own Bullfrog Gold shares, BFGC.
Allied Nevada, (ANV) is interesting below $20 per share. I think that could spring back nicely if gold gets back to $1,700-$1,750 per ounce.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
I would be a seller of some, not all, of my Passport Potash shares at 40 cents per share. If the shares get there in the next 3-6 months. After six months, I would hold out for a higher price.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
But, I'm bullish on gold in the medium-to-long-term, so I'm in no rush to sell any gold shares. That's why I also own Bullfrog Gold shares, BFGC.
Allied Nevada, (ANV) is interesting below $20 per share. I think that could spring back nicely if gold gets back to $1,700-$1,750 per ounce.
Bullfrog Gold Achieves Strong Drill Results [View article]
The properties owned by Bullfrog Gold, (BFGC) and Pershing Gold, (PGLC) are far apart. No sharing of facilities is possible. Mines that are closer will always have an economic advantage over Bullfrog to use Pershing's excess processing capacity.
Arizona, The Next Big Thing In Potash: Grow Your Portfolio With This Potash Junior [View article]
With the recent demise of PRGX, there's no doubt that Passport is the winner in the Holbrook basin. Passport should receive a lot more interest from strategic investors in India and China, not to mention Rio, Vale and BHP.
The company's PEA is due out any day now. That should be a good read. I'm hoping that the cap-ex intensity, (cap-ex divided by tons of annual production) comes in below $850 per ton...Industry costs have risen since Prospect Global's puff piece of a PEA in October, 2011. Prospect used a 10% disc factor, 40 year mine life and $496 assumed potash price. I'm curious to see what Passport comes out with.
Pershing Gold - Is It Too Early To Begin The Countdown To First Production? [View article]
This report remind us that it is expensive to keep a mining company listed as the many banking, regulatory, legal and overhead expenses are not going away. All the while, there will be little to no money for any sort of drilling, the one productive aspect of running a junior.
A key takeaway is that juniors with access to growth capital and the ability to make acquisitions of distressed assets are in the driver's seat. At PDAC, Toronto I ran into Barry Honig, a successful investor in small cap companies including Pershing Gold, (PGLC), Passport Potash, (PPI.TO, PPRTF), Bullfrog Gold, (BFGC), Valor Gold, (VGLD), and Energy Fuels, (EFR.TO, EFRFF). We walked through the hundreds of exhibits and compared notes.
In looking at dozens of gold companies at the conference, almost all were high risk due to location, (Africa, Bolivia, Central Asia, etc), under-capitalized through first production, not in first production for 3 or more years, surprisingly high cost projections, (some projects require $1,800 + long-term gold to thrive) and facing tremendous infrastructure challenges. For example, in some frontier countries, rail lines several hundred kms long need to be built and power, labor and water are open questions in many cases.
The conference reinforced our belief that several lower risk North American developers have similar blue-sky upside potential with substantially less downside. For example, Pershing Gold is re-opening a past producing gold mine in Nevada. The pits are already there and Pershing owns a fully-built and permitted processing facility. Located about a mile south of mid-tier producer Coeur d'Alene, (CDE), Pershing appears to have strategic value to a number of larger companies with operations in Nevada.
Pershing will achieve first production next year, ramping up to 50k ounces of gold in 2015. The Company should be able to double production within 2 years of reaching 50k ounces. All of this from just 3% of Pershing's 39 square miles of consolidated acreage. Self-funded exploration potential is huge. Modest funding is required through first production of gold next year. This development story is substantially de-risked compared to most of the stories we saw at PDAC.
Best of all, Pershing has multiple options to raise the capital it needs. A debt facility, a royalty deal and equity are being considered as part of an overall financing package. Demonstrated success at raising capital offers a strong signal that Pershing is in excellent shape. Coeur d'Alene made a strategic investment in Pershing Gold last year as did Barry Honig and billionaire value investor Dr. Philip Frost.
Not all junior gold plays carry outsized risks. PershingGold is one example of a company with quite reasonable risks.
Exclusive Interview With Pershing Gold's Stephen Alfers [View article]
This report remind us that it is expensive to keep a mining company listed as the many banking, regulatory, legal and overhead expenses are not going away. All the while, there will be little to no money for any sort of drilling, the one productive aspect of running a junior.
A key takeaway is that juniors with access to capital and the ability to make acquisitions of distressed assets are in the driver's seat. At PDAC, Toronto I ran into Barry Honig, a successful investor in small cap companies including Pershing Gold, (PGLC), Passport Potash, (PPI.TO, PPRTF), Bullfrog Gold, (BFGC), Valor Gold, (VGLD), and Energy Fuels, (EFR.TO, EFRFF). We walked through the hundreds of exhibits and compared notes.
In looking at dozens of gold companies at the conference, almost all were high risk due to location, (Africa, Bolivia, Central Asia, etc), under-capitalized through first production, not in first production for 3 or more years, surprisingly high cost projections, (some projects require $1,800 + long-term gold to thrive) and facing tremendous infrastructure challenges. For example, in some frontier countries, rail lines several hundred kms long need to be built and power, labor and water are open questions in many cases.
The conference reinforced our belief that several lower risk North American developers have similar blue-sky upside potential with substantially less downside. For example, Pershing Gold is re-opening a past producing gold mine in Nevada. The pits are already there and Pershing owns a fully-built and permitted processing facility. Located about a mile south of mid-tier producer Coeur d'Alene, (CDE), Pershing appears to have strategic value to a number of larger companies with operations in Nevada.
Pershing will achieve first production next year, ramping up to 50k ounces of gold in 2015. The Company should be able to double production within 2 years of reaching 50k ounces. All of this from just 3% of Pershing's 39 square miles of consolidated acreage. Self-funded exploration potential is huge. Modest funding is required through first production of gold next year. This development story is substantially de-risked compared to most of the stories we saw at PDAC.
Best of all, Pershing has multiple options to raise the capital it needs. A debt facility, a royalty deal and equity are being considered as part of an overall financing package. Demonstrated success at raising capital offers a strong signal that Pershing is in excellent shape. Coeur d'Alene made a strategic investment in Pershing Gold last year as did Barry Honig and billionaire value investor Dr. Philip Frost.
Not all junior gold plays carry outsized risks. Pershing Gold is one example of a company with quite reasonable risks.