jorc resource estimate, page-10

Nice to see a 5% plus day for all the holders who bought higher!!

I have outlined five scenarios below which are expected to occur over the next 4-8 weeks resulting in a pickup of volumes and a meaningful price reaction (either up or down). Between now and any imminent announcement you likely to see days like this when someone wants to take a reasonable position ahead of newsflow (expecting scenario 1,2 or 5) or a down day when people think scenario 3 and 4 is the base case ...


1. JORC resource (excluding fed lands) is issued
- May rally up to 70 cents if we initially receive 100MT @ 20% K20 (or better). If less than 50MT, may put a floor around current levels -> this is not a bad thing as it takes the 30 cents out of play.

Estimated price reaction: 70 cents

2. Fed Permits are granted (before initial JORC resource estimate)
- Positive impact on share price, possibly re-rate to low $1 range given likelihood of initial JORC estimate being a lot higher.

If POK then elect to continue drilling on Fed lands before giving the initial JORC estimate, it could be a good opportunity to take same $$ off the table in case a few of the results disappoint..

Estimated price reaction: $1

3. Fed Permits are not granted with no opportunity for POK to address any shortcomings of the BLM's findings
-probably case closed for Paradox. Share price @ 15 cents (value of cash and RAD with a small discount)

Estimated price reaction: 18 cents

4. Fed Permits ruling is delayed
-definite weakness here again as traders assume the worse, price towards 30 cents..


Estimated price reaction: 30 cents


5. Fed Permits are granted and an initial JORC resource estimate is issued
-share price easily will see a launch like no other. very likely this will have to be 200MT or higher if management want to make a statement and win back some credibility. I dont see any shortcoming in POK being able to do this as i assume historical results and those which are shared on a confidential basis should be enough to get some potash in the indicated or inferred category (any thoughts on this?)


Estimated price reaction: $2


If you assign an equal probability to each outcome, you get around $0.83 as a estimate of the share price... But given the reservations most traders have with management, this price discount is likely justified.