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The first quarter of 2015 hasn’t been the most positive for the potash space. Still, some fertilizer companies have managed to see major share price gains, with a couple increasing by over 50 percent year-to-date. Here’s a look at the three big gainers on the TSX and TSXV so far this year and what they’ve done to get the attention of investors.
With the global potash price war creating uncertainty in the industry, the deal between China and Belarusian Potash Company creating a benchmark price lower than producers had hoped for, the less-than-stellar price outlook from Macquarie Group and the Saskatchewan government’s decision to double its take from the potash industry, it’s been a tricky time to be involved in the market.
Still, some companies have managed to see some major share price gains, with a couple increasing by over 50 percent year-to-date. Here we take a look at the three big gainers on the TSX and TSXV so far this year and what they’ve done to get the attention of investors.
1. Allana Potash (TSX:AAA); up 42.65 percent to $0.49 year-to-date on the TSX
After seeing positive results from a preliminary economic assessment on sulfate of potash production at its Danakhil potash project in Ethiopia, Allana Potash entered into a definitive arrangement agreement to be bought by Israel Chemicals (NYSE:ICL). Allana’s president and CEO, Farhad Abasov, said at the time that the deal, which is worth $0.50 per share, or $137 million, will be to shareholders’ benefit.
2. Encanto Potash (TSXV:EPO); up 60 percent to $0.12 year-to-date on the TSXV
Encanto has been looking to make some big deals, announcing just last week that its long-term potash offtake proposal with India is being presented to management at Rashtriya Fertilizer Company for approval.
The company also received an expression of interest last month from Fengate Capital Management to undertake the development, construction and financing of a power-generating station for the proposed potash mine and processing plant to be built for its Muskowekwan project in Saskatchewan. The company also announced Monday that it has increased a previously announced private placement to 17 million units due to excess demand, which speaks to the interest it has been garnering from financial supporters.
3. Sennen Potash (TSXV:SN); up 56.67 percent to $0.47 year-to-date on the TSXV
Sennen Potash started off the year right with some positive assay results from its Monument potash project in Utah. They confirm high-grade potash mineralization of 46.1 percent KCI (29.1 percent K2O) over a thickness of 6.3 meters. A second, previously unknown potash bed was also uncovered.
The company has also been taking steps to raise money, first by consolidating shares and then arranging a private placement to raise gross proceeds to C$3 million. The private placement will consist of 12,500,000 units priced at $0.24 per unit and will consist of one common share and one share purchase warrant.
Wondering how we got these numbers? Resource Investing News used The Globe and Mail’s stocks data tool to find the top performers year-to-date from the mining and precious metals sectors. Only companies with a market cap of over $50 million were included.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
Related reading:
What the Allana-ICL Deal Could Mean for Potash M&A