Just doing some more research before deciding whether to buy, which is looking very likely and I found quite a good research report, apologies if it has been recently posted, it sets a price target of 90c and exploration target of .7 to 1.5 bt.
Investment Thesis: ? Brazil’s agriculture sector set for record growth. AGR is well positioned to meet the needs of a ready domestic market with 91% of potash consumption in Brazil imported and agriculture and fertiliser demand forecasted to grow. 49% of domestic phosphate consumption is also imported to Brazil. ? Brazilian project location delivers strategic and financial benefits. AGR is strategically positioned to sell its product to the domestic Brazilian fertiliser market, providing a significant advantage to its international peers who will need to commit capex required for rail/port infrastructure solutions. We also anticipate margin benefits of ~$100/t for its potash via sales direct to local blenders. ? 0.7-1.5Bt potash resource potential. AGR will shortly commence drilling at the Atlantic potash project in Brazil, with an exploration target of 0.7-1.5Bt @ ~12-15% KCI. The mineralisation occurs at a depth of 1,500-1,700m below surface and if initial drilling confirms continuity of the resource at ~25m thicknesses then we anticipate a maiden JORC resource of up to 0.5Bt by 2QCY12. ? Vale’s development of potash mines the in region de-risks exploration. 30km to the North is Brazil’s only producing potash mine Vales ‘Taquari-Vassouras’ underground mine. Vale has also built a functioning carnallite solution mining pilot plant with the aim of producing 1.2Mtpa KCI, highlighting solution mining in the Sergipe basin is commercially feasible and the granting of environmental permits obtainable. Historical bore-hole and 2D seismic data also highlights the presence of potash mineralisation.
AGR Price at posting:
55.0¢ Sentiment: LT Buy Disclosure: Not Held
