Rockstone Research's Mining Analyst Stephan Bogner today has published a first research update after the initiating coverage on February 19, 2014. The update includes speculation on why Western Potash's Milestone Deposit may fit senior mining companies like K+S from Germany or Rio Tinto, BHP Billiton, Potash Corp. of Saskatchewan and others.
The full research report can be viewed as a PDF via the following links:
In the wake of a recent flurry of buying action in Western Potash Corp., investors are left wondering whether the advanced-stage potash developer is in the crosshairs of a deep-pocketed suitor.
We have reasons to believe that this is likely the case. And we believe that smart investors are merely positioning themselves ahead of a potential takeover bid or the signing of a joint venture partnership with a mining industry giant.
Weighing in Western Potash's favour is the fact that its world-class Milestone project in Saskatchewan boasts a projected annual production of up to 2.8 million tonnes of potash. As we laid out in our Initiating Coverage on February 19, 2014, Milestone has an anticipated minimum 40-year mine life with one of world's lowest projected production costs.
Recently on March 1, 2014, the Deccan Herald - a leading English-language daily newspaper in India - propelled M&A speculation to the next level in an article titled "Roping in Canada for food security":
"In the future greater potash supplies from Canada will also reach Indian shores via investments being made by companies like Rashtriya Chemicals and Fertilisers Limited which is looking to acquire a 40 per cent stake worth a billion US Dollars in a joint venture with Western Potash Corp for a new mine in Saskatchewan."
The mentioned companies K+S AG, Potash Corp. of Saskatchewan, Rio Tinto and BHP Billiton represent just few of the
candidates that would be motivated to buy or partner with Western Potash.
Rockstone will continue to monitor the situation and research candidates as
this opportunity grows.