APC now in trading halt for scoping study results of the Lake Wells project. Interesting to see how the pure bore setup stacks up against the neighbour
SO4 who are trenching (more expensive) and boring. Economics of the project appear pretty compelling - they look to be on track to produce at a cost of ~$180/t (assuming slightly cheaper than SO4 which shouldn't be a stretch) and as per the screenshot below the typical farm-gate costs in WA equate to over $1000/t. Just 1kg of the stuff will set you back over $10 at Bunnings.
View attachment 515106
With a production estimate of approx 100,000 initial tonnes per annum, rising in later years as the capex is paid off (which compared to peers will be small as a result of the brine based bore production), it doesn't take a genius to figure out just how profitable they will be down the track. Oh, and "down the track" won't actually be that long, in fact APC is likely to be the first Australian potash company to sell their product in the domestic market.
Also a couple of extra points to keep in mind:
- Creasy the major SH.
- T20 very similar to that of Sirius Resources before its giant move.
- Just about the smallest market cap potash player around, despite the fundamentals above and a cash balance of circa $4m.
- Producing the premium version of potash (SOP as opposed to MOP). Less arable land and rising population = more demand for higher yielding crops which = more demand for SOP over MOP.
- Massively backed by Hartley's. Their clients own approx $5m in the company and have been accumulating for over 12 months now. The data is quite phenomenal...not a week goes by without more Hartley's accumulation. They can let the brakes go at any time on this.
I know a few in here have a stake in APC so I thought I'd share a few of the points and make a note of the TH.
(20min delay)