Karnalyte (KRN, TSX)
86 cents | Market Cap $36 million
1) Wynyard is already permitted and “construction ready”
2) Environmentally advantaged project, already EIS approved (no surface tailings ponds or piles)
3) Located in Saskatchewan, a true pro-resource province
4) Publicly traded fertilizer stocks are in short supply, demand is rising
5) Tight share structure w/ 42 mil out (never rolled back), key stakeholder (38% equity) and financier (non-binding LOI back in 2016 to lend up to $700 million) via state-backed Gujarat Fertilizers & Chemicals
6) Karnalyte continues to be valued at just 1% of NPV as per a Bankable Feasibility Study (using Can $466 per ton Potash) estimated $3.4 Billion for all three phases of project development
7) KRN shares are levered to Potash via 150 million tonnes of Proven and Probable reserves -- Please check my math but that would be like paying less than $1 per ounce of Gold in-ground (proven and probable)
8) ^^^calculation does not include any worth for Magnesium, a by-product of Potash production, or Nitrogen (a separate project and possible spin-off)
9) Majors like BHP and Nutrien operate in Saskatchewan and they’ve demonstrated long-term confidence by upping their investments in Sask. The Jansen Project may cost BHP up to $5.7 billion.
10) Fertilizers are an essential commodity and fertilizers are fast becoming a national security issue. India is taking immediate action by increasing subsidies to farmers, angling to secure long-term supplies, and allocating capital toward building new fertilizer plants. Gujarat, a state-backed corporation is Karnalyte's largest shareholder and off-taker.
*I/we own KRN
**I was not compensated in any way for this short post
***Updated economics to be published during Q2
