OK So selling Bentonite is too hard for AQC itself. Fine.
Well arguably it is not for BHP who tried to buy the world's largest producer of Potassium Bentonite aka Potash for around $40bn. The strategic rationale for BHP's acquisition of Potash was to hedge its position against GHG exposure. i.e. In situations of adverse climate effects the value of BHP goes down. Whereas the value of Potash goes up.
And who owns the largest / highest quality deposits of Potash in Australia? Could it be AQC???? Well we do not know for sure because they bought a sodium bicarb mine with the money they raised to finish the exploration program for Bentonite. [Back in the day when their share price was 17c!] But I would say it is probably worth finding that one out.
AQC's hidden value is that unlike every other coal mining company [in the world?], they have a built in shield against climate effects and the Carbon Tax in the form of a Bentonite mine, which can be used in Carbon Capture and Storage applications, fertiliser, filtration and other environmental applications.
Extrapolating beyond the limits of the JORC Code implies AQC could access over 500MT of Bentonite based on the sizes of what has been drilled and their land and the surrounding claims. Putting this in perspective Potash Corp is expected to produce around 17MT of Potash between 2009 and 2015.
Some questions to be addressed are to determine in what ways Potash, Potassium Bentonite is comparable to the forms of Bentonite AQC has i.e. Calcium Bentonite. And whether the CEC (Quality rating) of AQC's bentonite is on par with Potash Corp's.
If these can be favorably answered then there might be the basis for a BHP AQC deal on the offing.....
AQC Price at posting:
4.1¢ Sentiment: Buy Disclosure: Held
