Agreed, we are all anticipating the optimisation study and the announcement on project funding. But there are some things we need to consider in relation to that:
- On the optimisation study, my understanding is that the optimisation study is exactly that. It is a study designed to optimise what is an already functional and profitable business case. The release of this study only improves what is an already very viable business case.
- On financing, according to the attached article, SQM appointed their Finance Vice President to the KP2 board of Directors. SQM has a Mcap of over $20 billion and is one of the worlds biggest potash suppliers. SQM is also a major shareholder of KP2.
- KP2 has a massive resource. DFS reports an initial production of 2.2 million tonnes per annum of potash for 33 years. This is still just an initial resource which will reportedly be upgraded. On initial production, DFS reports that based on a potash price of $350/t, KP2 would generate in excess of $500 million of free cash flow PER YEAR for 33 years, and now consider the current price of potash is reported to be $1200/t.
KP2 is therefore very well positioned in this market, where there is a massive demand for potash. Particularly so because KP2's mine is in proximity to the markets where potash is in demand (Brazil and Europe). IMO, all the signs bode well for a strong KP2 future. GLTAH
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