IM Agriminerals News in Brief 30 May – 5 June

By James Sean Dickson
Published: Friday, 05 June 2015

Potash West upgrades Dinner Hill phosphate resource; Highfield Resources geochemical drilling campaign completed successfully; Advisory firms back Allana Potash over ICL buyout intention; DuSolo signs DANF phosphate supply contract with Brazilian distributor.

Australia-listed Potash West NL has upgraded its Dinner Hill phosphate resource, part of the Dandaragan Trough phosphate and potash project located near Perth, Australia to 250m tonnes ore at 2.9% P2O5.

Tonnage increased by 108% during the upgrade, while the grade of the resource was pushed up by 4%. Indicated and inferred potash resources at Dinner Hill now stand at 195m tonnes at 3.8% K2O.

"Importantly, the mineral inventory for phosphate production has increased substantially, and there is still a significant area of the prospective Dinner Hill tenement to be explored," Patrick McManus, Potash West’s managing director, said.

The company also noted the significance of the fact that the phosphate resource increases in grade to the north within the area of drilling. The results will form the basis of a mine design for the project’s feasibility study, which is due to begin in the third quarter of 2015.

Highfield Resources Ltd has successfully completed two drilling campaigns designed to confirm the geochemical conditions for the two proposed mine decline routes at the Muga potash project in Spain.

The Australian junior’s managing director, Anthony Hall, said: "The commencement of decline construction is critical to ensure we meet are planned production timelines of the first half of 2017.  We were also very pleased by the high grade potash mineralisation in [holes] J14-13 that is likely to enhance the Muga mine’s grade and life."

Geotechnical assessment of the core has not yet begun, but Highfield advised that each key lithology of the project was encountered.

While the presence of water, which can present an operational difficulty for potash mines owing to the solubility of the salt group mineral, was recorded, Highfield said that it is localised to rock fractures and does not indicate the presence of a problematic acquifer.

Meanwhile, in Canada, advisory firms Institutional Shareholder Services Inc. (ISS) and Glass, Lewis and Co. LLC (Glass Lewis) have recommended that shareholders of TSX-listed Allana Potash Corp. vote for the proposed arrangement whereby Tel Aviv-based Israel Chemicals Ltd (ICL) will purchase all of the company’s shares for Canadian dollar C$0.50 ($0.40*) each.

 "We are glad to see that two leading independent proxy advisory firms recommend that our shareholders vote for the ICL-Allana transaction," Farhad Abasov, Allana’s CEO, said.

"Allana’s board of directors and management believe that the arrangement provides a very attractive opportunity for the company’s shareholders to realise full liquidity at a substantial premium to the market price of the common shares of Allana and firmly validates the efforts of the last six years of development by the Allana team," Abasov added.

Allana’s stock currently stands at C$0.495/share, though just before the deal was announced it stood at C$0.33/share. On 4 November 2011, Allana’s shares were trading at $1.27/share, the company’s peak listed value.

TSX-V-listed DuSolo Fertilizers Inc. has entered into a two year contract to sell 30,000 tpa phosphate-based direct application natural fertiliser (DANF) with a Brazilian fertiliser distributor local to the company’s Bomfim project.

The buyer will pay Brazilian real (R$) 230/tonne ($73.18/tonne) for 15% P2O5 DANF to DuSolo for total gross proceeds of R$13.8m ($4.39m).

"Being the sole local supplier of DANF in the region, our product is in demand as it offers local farmers a high quality fertiliser at competitive prices. We are currently in negotiations with a number of local agribusinesses for our DANF product and expect to announce more sales contracts in the coming weeks," Eran Friedlander, DuSolo’s CEO, said.

DuSolo will has already received an advanced payment of R$115,000 ($36,590) from the distributor for the immediate delivery of 500 tonnes DANF.

Toronto, headquartered-based PhosCan Chemical Corp. has initiated a strategic review process aimed at enhancing shareholder value.

A special committee of three independent directors, Stephen White, Murray Sinclair and Gordon McKinnon, with White chairing the board will be established.

PhosCan owns the Martison phosphate project in northern Ontario, Canada, and has around C$54m in cash and cash equivalents.

"The special committee will consider a range of alternatives available to the company. These alternatives include, but are not limited to, investing the cash and cash equivalents not required in the near term to advance the Martison project in other assets, a merger or business combination transaction involving a third party, or any combination thereof," PhosCan said.

Also based in Toronto, Verde Potash Plc has announced positive results for its crop growth testwork, which prove that the company’s TK47-branded potash product can realise 9.32% more carrot growth mass than standard muriate of potash (MOP) products.

Verde said that the tests were requested by Brazil’s largest carrot producer. The test was carried out by an independent research institute.

"The tests validate TK47's benefits for plant nutrition, plant protection, soil improvement and increased sustainability," Verde said.

Verde also saw that TK47 could "unlock" a significant amount of phosphate from the soil, by making it available for plant uptake.

In Vancouver, Western Potash Corp. has confirmed that UBS Securities Canada Inc. has filed a lawsuit against the company before the Ontario Superior Court of Justice.

UBS is claiming fees, disbursements and damages in connection with a strategic investment in Western Potash by China BlueChemical Ltd and Guoxin International Investment Corp. Ltd via a wholly owned subsidiary CBC Canada Holding Corp.

"The company believes that UBS’ lawsuit is unfounded and entirely without merit, and intends to vigorously defend itself against the lawsuit," Western Potash said.

In Saska

tchewan, Gensource Potash Corp. has recommended its shareholders to change auditor from Ernst & Young LLP (EY) to MNP LLP.

Gensource that there were no reservations in EY’s reports in the two most recently concluded fiscal years.

Finally, in the UK, Qualter Hall & Co. Ltd has chosen by Cleveland Potash, a subsidiary of ICL, to design, supply, install and commission a polyhalite processing facility for the Boulby potash mine in Yorkshire, England.

Qualter Hall will supply screening and crushing equipment, a conveyor belt, a stockpile shed, vibrating feeders and a dust extraction system, among other requirements according to reports.

UK-based junior Sirius Minerals Plc is looking to bring its York Potash polyhalite project into production nearby to Cleveland’s Boulby mine. A crucial permitting decision on the development is due in the coming weeks.

*Conversions made June 2015