Potash West NL Receives Speculative Buy and A$0.22 Target from Broker

A recent article by proactiveinvestor.com reported that Potash West NL (ASX:PWN,OTCPINK:PWNNY) has received a Speculative Buy recommendation from State One Stockbroking, with a A$0.22 target price.

A recent article by proactiveinvestor.com reported that Potash West NL (ASX:PWN,OTCPINK:PWNNY) has received a Speculative Buy recommendation from State One Stockbroking, with a A$0.22 target price.
As quoted in the press release:

With phosphate in particular, security of supply is becoming an increasing concern for downstream producers, as 85% of phosphate rock Reserves (the raw material for synthetic P2O5-based fertilisers) is located in North Africa and the Middle East.
PWN’s Dandaragan phosphate/potash Project located in WA (150km north of Perth) is perfectly located to service Asian and local markets and, unlike other domestic projects, is in close proximity to infrastructure (including rail and ports).
We estimate the NPV10 of the phosphate component of PWN’s Dandaragan Project at A$180m (A$0.67 per diluted share).
The 75% risk discount attached to the phosphate project should unwind as financing is secured and as the project is advanced (derisked). We note that in March 2016, PWN appointed global business advisory firm FTI Consulting to identify potential domestic or global JV and financing partners.
PWN’s combined equity interest in Platypus Minerals (ASX:PLP) and Davenport Resources (pre-IPO) is valued at ~A$6m, offers exposure with near-term upside potential in the lithium and potash markets respectively, and forms a strong underpin to PWN’s SOTP valuation.
The phosphate project is highly leveraged; in a 10% higher average realised price (ARP) environment, our forecast phosphate NPV increases by 40%.

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