Nice21 Sep 2015 10:02
Wildhorse Energy (LON:WHE) has returned its first quarterly results since the transformation acquisition of two potash projects in Western Australia.
The company announced its intention to acquire the Lake Wells and Lake Ballard projects in an all-shares deal back in April, and completed on the purchase in June.
Since then, it’s been straight to work, with a heritage survey now completed at Lake Wells, and further licenses granted at Lake Ballard.
The progress at Lake Wells is particularly significant as it has involved the approval of Aboriginal Heritage Consultants for a potential drilling campaign.
That clears the way for a full resource evaluation programme and means that significant newsflow is likely to be forthcoming from Lake Wells in due course.
Meanwhile, at Lake Ballard, reconnaissance exploration work has now got underway.
Both projects look highly prospective for economic quantities of a premium form of potash, known as sulphate of potash (SOP).
Unlike standard forms of potash, usually known as muriate of potash (MOP), sulphate of potash does not contain chlorine, which can be harmful to some plants, particularly sensitive high yielding crops like fruits and tobaccos
The pricing tells the story. Whereas the prices for MOP have been under pressure for some time, and in particular since the Canadian and Russian cartels broke up a couple of years ago, pricing for SOP has held up pretty well.
For many years the prices of SOP and MOP tracked each other, with SOP selling at a significant premium, but none the less mirroring moves in the MOP price.
Within the past couple of years though, there has been a divergence.
MOP prices have weakened, while SOP prices have continued to strengthen.
That’s because SOP supply is constrained.
It’s a premium product and there’s not much of it about.
Which is why Wildhorse Energy has shown such an interest in its SOP projects in Western Australia.
At the end of June the company had just over A$3 mln in the bank to enable it to proceed with further work
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