Potash Ridge (PRK.TO) announced it has entered into an offtake and funding agreement with Jones-Hamilton, a private American company focused on chemicals. Jones-Hamilton also is one of the continent’s largest producers and marketers of hydrochloric acid.
As you might remember from our initial report on Potash Ridge (which you can read here), being able to sell the hydrochloric acid was the most important part of being able to successfully build a Mannheim plant to convert MOP into SOP. We explained the acid is a dangerous product because it can cause burn wounds and is corrosive to the skin and eyes. Back then we already looking forward to see how Potash Ridge would deal with the hydrochloric acid (which is a by-product from the conversion process), and no this ‘issue’ has been dealt with, the company can now focus on securing funding for the project which would enable it to make a construction decision in early 2017 to be in production by the end of next year (!).
What’s perhaps even more important about the Jones-Hamilton deal is the fact the latter has promised to fund the hydrochloric acid-related equipment and even though Potash Ridge hasn’t disclosed any amounts, we expect this to be a high single-digit million dollar amount. This would reduce the initial capex to just over C$40M which should make Valleyfield easily financeable.
Go to Potash Ridge’s website
The author has a long position in PRK. Potash Ridge is a sponsor of the website. Please read the disclaimer
