Just read the latest newsletter from Charlie Aitken and...

Just read the latest newsletter from Charlie Aitken and interesting to hear his views on BHP and potash in the wake of a lunch held with the CFO of BHP.

He said he would be shocked if BHP were to embark on a big potash spending spree in America, instead more likely to poach key players in the industry and grow their own asset base. In other words, the goal to be number 1 in potash will not necessarily be about buying medium and large size potash producers (more likely about buying management skills and high potential resources that are yet to be developed).

So what does this mean for Transit?
Nothing right now, but if we get that approval to drill and the scoping study confirms what we believe we have then we would be a perfect target for BHP IMO. We know the potential is for a tier 1 asset and it is so cheap ($10m market cap) that it provides BHP the perfect opportunity to build their potash business. Location (near Intrepid in the US - tick), resource size (large - tick), market cap (small - tick), management (tick)...

I recently wrote that one of the potential drawbacks was a lack of funding.
"- Funding: potash mines are not cheap. Despite this, if they have half of what they think then the big players will be climbing all over them to get a piece of the project IMO." I stand by that call and am growing in confidence that someone will come knocking if things pan out as expected in the next couple of months.

And bear in mind that UBS recently noted that "Potash is scarce, supply is tight and greenfield expansions are expensive and ... quite lengthy". BHP know this, which is why they are keen on the sector.