RWD Peer Analysis

Kalium has come from nowhere
Don't think it is justified.
RWD trading at 4% premium to Kalium, but discounts of more than 30% to Danakali, Salt Lake and Agrimin

	Column 1	Column 2	Column 3	Column 4	Column 5
0	SoP Companies	Share price (A$)	Mkt Cap (A$m)	Project	Mkt Cap Premium to RWD
1	Danakali	0.765	$173	Eritrea	219%
2	Salt Lake Potash (Wildhourse Energy)	0.565	$76	WA, NT, SA	39%
3	Agrimin	0.580	$72	WA	32%
4	Reward Minerals	0.400	$54	WA	0%
5	Kalium Lakes	0.430	$52	WA	-4%
6	Australian Potash (ex Goldphyre)	0.135	$30	WA	-45%

Remember Danikali is 50% JV, so if you assume the company has only half of that asset, then RWD drainable resource is the best of the SoP bunch.

	Column 1	Column 2
0	SoP Companies	Drainable Mineral Resource Mt
1	Danakali	260
2	Salt Lake Potash (Wildhourse Energy)	26
3	Agrimin	23
4	Reward Minerals	155
5	Kalium Lakes	20
6	Australian Potash (ex Goldphyre)	30

Capex, Opex and Production costs are pretty much the same for the top 4 mkt cap SoP Aussie companies
I seriously question Agrimin's numbers (given 250km of trenches) and Salt Lakes numbers.
Kalium and Australian Potash don't have anything yet.

	Column 1	Column 2	Column 3	Column 4
0	SoP Companies	Capex (US$m)	Opex (US$m)	Production (kT/pa)
1	Danakali	US$261m	US$255/t	425,000
2	Salt Lake Potash (Wildhourse Energy)	US$200m	US$323/t	400,000
3	Agrimin	US$259m	US$256/t	370,000
4	Reward Minerals	US$256m	US$263/t	400,000
5	Kalium Lakes
6	Australian Potash (ex Goldphyre)/

Conclusions:

1. If you wanted to punt on the sector, Australian Potash is trading at the biggest discount.
2. Kalium's share price is unjustified on so little data/resource.
3. Agrimin - if you assume their costs are right (questionable), why is RWD trading at a 30% discount to AMN, when RWD resource size is 8x AMN's?
4.  Salt Lake Potash - Questions on costs and how rigorous their data is.
5. Danakali - the real benchmark for RWD, even though sovereign risk.

I haven't closely looked at management incentives, but I can remember Agrimin management gave themselves plenty of performance options.  Can the same be said for Salt Lake, Kalium and Australian Potash? Quite possibly. All of these other companies have had some link with RWD, be it as significant shareholders/brokerage links. They smelt money and are now in.



That said, RWD still looks as the best VALUE amongst the SoP hopefuls. It just needs to be promoted. Hope Ruane doesnt spend too'much time dotting the i's and crossing the t's.